Assessable Income & Assets from a Court-Ordered (Statutory) Trust
Assessment of income from a court-ordered (statutory) trust
The following describes the assessment of income for court-ordered (statutory) trusts.
Court-ordered (statutory) trusts were not generally assessable under the trusts and companies rules until lthe Disallowable Instrument was remade on 18 May 2005.
From this date the private trusts and companies rules apply to court-ordered (statutory) trusts.
Veterans Entitlements (Means Test Treatment of Private Trusts - Excluded Trusts) Declaration 2015.
Pre-18 May 2005 Assessment of income
If money is held by a public trustee or similar body... | Then the interest... |
on behalf of an individual | generated by its investment is the person's income. This is regardless of whether individual investment accounts are maintained or whether the property is held in a 'common fund'. |
and no specific amount is held for the benefit of an individual For example, the property is held in common for the person and their children | any interest credited to the investment account is not assessed as the person's income. Income is assessed only when distributed or allocated to them.
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Pre-18 May 2005 Distribution of capital funds – income assessment
One-off payments made from the capital funds held by the trust are not taken into account as income. For example, distributions to enable modifications to be made to the person's home to assist with their disability.
Pre-18 May 2005 Assessment of assets from a court-ordered (statutory) trust
The following table describes the assessment of assets from court-ordered (statutory) trusts.
If money is held by a public trustee or similar body... | Then the... |
on behalf of an individual | full value of that money is assessable as the person's asset. This is regardless of whether individual investment accounts are maintained or whether the property is held in a 'common fund'. |
and a payment is made to an individual out of the money held by the statutory trust and NO specific amount is held for the benefit of an individual. For example, the property is held in common for the individual and their children. | The amount held is not an assessable asset of the person. |
Distribution of capital funds – asset assessment
One-off payments made from the capital funds held by the trust are the person's property and are assessed as an asset. Any amount that is assessed as the assets held by the trust must be reduced by the amount of the payment. Payments could include distributions to enable modifications to be made to the person's home to assist with their disability.
Court-ordered (statutory) trust for a minor
Payments to minors may be held on their behalf in a court-ordered (statutory) trust.
Payments could include:
- third party motor vehicle damages,
- workers compensation after the death of their sole surviving parent, and
- superannuation after the death of their sole surviving parent.
Money held in a court-ordered trust on behalf of a minor is the property of the minor, and interest credited to the account is their income.
Source URL: https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/103-business-structures-and-trusts/1038-other-trust-matters-01012002/assessable-income-assets-court-ordered-statutory-trust