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Payments to Trustees
Why appoint a trustee?
- is so ill or infirm as to be mentally incapable of managing their own financial affairs, or
- has a psychiatric disorder or a mental illness as a result of alcohol or drug addiction, or
- has spending patterns that render them destitute on a continual basis.
Legal rights of trustees
- has the legal right to receive and retain pension payments, and
- does not have to follow any directions on how the money is managed other than as required by their obligations as a trustee.
Obligations of a trustee
The trustee must be acquainted with and obey the terms and conditions of the trust which specify that the trustee must:
- manage the trust so there is no conflict of interest, ie. the trustee must not profit from the trust,
- exercise a duty of care in managing pension moneys for the pensioner's benefit,
- keep accounts for the trust and produce them at the request of the pensioner or the Department,
- fulfil any obligations imposed under the VEA on behalf of the pensioner - for example, advise the Department in writing of an event or change of circumstances that may affect the pension,
- keep trust money in a separate account from his or her own money, and
- be familiar with the law that covers the administration of trusts in his or her State or Territory.
The trustee cannot delegate any powers or responsibilities of the trust to another person.
Management of trust funds
While the trust is in force trust funds may be applied for the benefit of the pensioner, family member or dependant, as the trustee sees fit. The trustee may:
- accumulate funds from the instalments of the pension or allowance, and
- invest accumulated trust funds in any investments authorised for the investment of trust funds by the law of the State or Territory where the pensioner resides.
Termination of trust
The trust fund held by the trustee consisting of pension, allowance, investments and interest received on investments shall be dealt with as follows:
Then the trust funds shall be paid or transferred to the...
The trust is terminated
The pensioner dies
Legal representative of the deceased pensioner.
Note: If there is no legal personal representative the trust funds shall be paid or transferred to the person whom the Commission determines to be best entitled to them.
Trustee has two meanings depending on the context, (i) and (ii).
(i) a person who looks after someone else's affairs
According to section 202 of the VEA, a trustee is a person appointed by the Commission to administer the financial affairs of a pensioner who may be incapable of managing their own affairs for reasons such as:
- ill health, or
These criteria include circumstances where a pensioner has a psychiatric disorder or a mental illness as a result of alcohol or drug addiction.
A trustee can be appointed, with or without the consent of the pensioner and once appointed, a trustee has full control of the pension payment.
(ii) a person responsible for administration of a trust
Veterans' Entitlements Act 1986.