Every parent worries about their child's financial future. But what if your child is disabled and incapable of managing their finances?
Simon Treadwell and Kylie Lewin know their son, Ryan, 9, will need support for the rest of his life. Born with an intellectual disability and low muscle tone, Ryan needs constant care and supervision.
''We want to leave all our kids something, but he's going to need some extra help,'' Lewin says.
''We know he's not going to be able to hold down a job and look after himself in the future.''
Having recently decided to arrange their wills, the Melbourne couple also sought financial advice and are investigating whether they can set up a special disability trust, or SDT, for Ryan.
SDTs were set up by the federal government in 2006 as a way of encouraging parents to plan financial security for their disabled children. Family members, including grandparents, step-parents and siblings, can gift up to $609,500 in a SDT to a disabled family member tax-free.
The trust is not means-tested, so the disabled person's disability support pension is not affected.
The beneficiary of the trust can use the funds for medical expenses, modifications to their home or car and maintenance on trust-property assets.
The beneficiary may also spend up to $10,750 a year on discretionary costs - anything from educational workshops to computers.
Financial planner Chris Browne, from Rising Tide Financial Services, says this discretionary amount gives disabled people the freedom to spend on some luxuries not necessarily related to their care and accommodation.
''It could be anything that contributes to their happiness,'' he says. ''For example, it could be therapeutic for them to have a trip to Bali.''
While SDTs have been hailed as game-changers for families anxious about the future of their disabled loved one, they have also been criticised as frustratingly difficult to establish.
Treadwell and Lewin began assembling a folder of newspaper clippings and computer print-outs when they first began researching SDTs. But it wasn't until they had the helping hand of a friend and fellow parent of a disabled child that the jigsaw pieces starting fitting together.
''It's a minefield to understand the options, and the terminology and jargon that is used is very confusing,'' Treadwell says. ''We just didn't know where to start.''
Instead of ''muddling through on our own'', the couple found a financial planner to set the wheels in motion.
''It's eased a big burden for us,'' Lewin says. ''It's a long time off until we are not around to look after him, but we know now that the financial burden won't fall to the other children.''
Public relations adviser Jess Mangan, 26, will one day become a joint trustee with her youngest sister, Kate, 20, of a fund set up to support her sister Rebecca, 24, who has Down syndrome.
''The trust was set up in 2005 and its main purpose is to keep Bec's financial future safe,'' she says.
''It's given us a sense of security and something to fall back on. But regardless of what happens, we'd always take care of her.''
Mangan says Rebecca has the intelligence of a four-year-old and will need carers for the rest of her life. She volunteers on a weekly basis, studies vocational skills and has recently moved into a share home.
''It's a worry for my parents, but we're a close family and we've got a great support network.''
To be eligible for a SDT, the beneficiary must have a severe disability. This includes those who receive a disability support pension, have immediate family members who qualify for the carers' allowance and earn less than award wages or work fewer than seven hours per week. Eligibility aside, what restricts many struggling families from establishing a SDT is a lack of funds.
Many parents give up their careers to care for their disabled children and simply don't have a nest egg for their child's future, Browne says.
''A lot of these people are just living from pay cheque to pay cheque, at or below the poverty line,'' he says. ''A lot of carers can't afford it, but they should know that money can be gifted into a fund.''
Immediate family members can provide $500,000 to the trust and may receive concessional treatment. This is particularly handy for ageing parents of adult disabled children. Browne says money gifted to a SDT can be deducted from a person's estate, making them eligible for the aged pension.
''It's like giving a free kick to the person who supports their disabled family member,'' he says. ''And this is awesome because, without a shadow of a doubt, disability creates more expenses, not less.''
