Judi Moylan (Pearce, Liberal Party) Share this | Hansard source

At the outset I would just like to acknowledge the members for Stirling and Gilmore and thank them for their support for this motion, and I thank all who participate in this debate today.

A few years ago I took a phone call from someone in one of the country towns in my electorate. The call haunts me to this day because that person was calling to say they were desperate, that a 90-year-old woman had been admitted to the local hospital with a serious illness and sadly subsequently passed away. She was admitted to hospital with her 60-year-old profoundly disabled son for whom she was the sole carer. Two weeks after the death of this woman, her disabled son was still living in the hospital and staying in a hospital bed. He had nowhere else to go. Along with the then mayor of this town we were eventually able to find accommodation and suitable help for him, but the thought of that situation happening to other families is deeply concerning, especially as more than 15,000 people over the age of 65 care for severely or profoundly disabled individuals according to the latest ABS data, from 2003.

Special disability trusts were established in 2006 under the Howard government to assist families to make provision for the future care and accommodation needs of their profoundly disabled dependants. Concessions were built in so as not to adversely impact Centrelink payments, such as the disability support pension, or the pensions of family members contributing to the trust. In a later written submission to the Senate Standing Committee on Community Affairs, Wendy Verhagen, President of Winaccom, a disability housing organisation, recalled her initial joy when she said:

I remember talking to a group of parents at Ashwood Special School about this proposed legislation, and mentioning that they could start such a Trust and put savings into it, together with perhaps grandparent’s bequests, so that when the youngster was in his or her 30’s, there could be sufficient funds in the Trust so that they would not be dependent on the Government for accommodation or support. One parent actually described such legislation as “life-changing.”

Initially it was estimated by the Department of Families, Housing, Community Services and Indigenous Affairs that over four years 5,000 people with severe disability would benefit. But that is far from the reality because, as at 31 March 2010, only 423 people had been assessed as eligible to enter into one of these trusts and only 91 of those 423 people had actually established a trust. Clearly something is wrong.

In 2008 the Senate Standing Committee on Community Affairs investigated special disability trusts, producing a report entitled Building trust: supporting families through disability trusts. That report clearly sets out the impediments to greater uptake of the trusts. How these drawbacks have come about was illuminated by Ian Spicer, who acted as chair of the original advisory group on the establishment of the trust. In evidence to the committee he noted:

… the rules proposed for establishing a trust were drafted cautiously, being a first step only, with the hope that they could be revised and extended in the light of further evidence and experience.

That opportunity is now upon us. We have the report. Fourteen recommendations were made in the report to improve the uptake of the trust, yet many of these have been ignored or only implemented in part. For instance, recommendation 5.2, which calls for the transfer of property to the trust to be exempt from capital gains tax, was not agreed to by the government. The practical impact is profound.

Brian and Jean O’Hart from Western Australia bought a property in 1988 in their names for their severely disabled daughter to live in. An accountant has calculated that by transferring that property to a special disability trust before their death so that they have the certainty that their daughter will have accommodation they will be liable to pay $126,000 in capital gains tax—just to change a name. It is shocking that the government would want to strip such a vast sum from self-funded retirees looking after a profoundly disabled child. That money would be better directed to the care of their daughter.

General taxation of the trust continues to be a significant barrier. When legislation was brought forward as part of the budget, my office inquired with the department about specific cost examples, including different interpretations sent in by members of the public. The department did not confirm which variation was correct. What confidence does that give the trustees, who are most likely going to be the same people caring for the beneficiary? Parents and siblings struggle enough caring for their severely and profoundly disabled dependants; wading through complex tax administration should not be lumped upon them by the government as well.

The high eligibility threshold is also a problem. One of the few special disability trusts in existence is the Deb Trust established by Brian Broughton for his daughter Debra, who has Down syndrome. In his submission, Brian recalls:

The first problem we encountered was the “Care” test when our daughter failed to reach the required points level, the first time around. … Thankfully we had very supportive members of [the Perth Centrelink] team who advised us to fill in another “new” application and ‘think outside the square’.

It is telling of the difficulty of establishing such trusts when parents looking after a profoundly disabled person—exactly who the trusts were envisaged for—must, for the sake of an application form, creatively reinterpret the care they currently give. Robyn Kleber investigated a special disability trust for her daughter Jessica. She decided against one because, as her daughter’s income cannot be contributed to the trust, Jessica’s savings will accumulate until eventually her pension is reduced according to her bank balance and Centrelink limits. Robyn pointed out:

The use of a trust for all expenses (such as holidays and household items) as well as accommodation would be much more useful. This would also necessitate only one financial return ([which are] time consuming!)

A similar view was espoused in the report with recommendations that the trust be able to cover all day-to-day expenses related to health, wellbeing, recreation and independence of the beneficiary.

Instead, in its new legislation the government has plucked out an arbitrary $10,000 a year discretionary spending figure. Although being an improvement, the government is effectively dictating how much can be spent on a person’s wellbeing, recreation and independence. We know that amongst the profoundly disabled community there are many different needs. Surely this is best determined by the trustees and the family of the individual—that is, the people who constantly care for them.

The government has even rejected the recommendation that it simply review appropriate options to provide additional assistance to families establishing and maintaining a special disability trust. I understand that a trust template was originally envisaged to help minimise the legal cost but has never eventuated. I would ask particularly that the government follow up on this matter. As Wendy Verhagen points out:

The thousands of parents who continue caring for their disabled son or daughter in the family home, often into their 80’s, save the government $30 billion a year.

The thousands of parents who continue caring for their disabled dependant in the family home, often into their eighties, do make a major contribution and everything should be done to try to ease that burden. Yet the government will not even review the options to provide additional assistance that will allow families to look after their dependants. Much more can be done and much more should be done and I urge the new parliamentary secretary, Senator the Hon. Jan McLucas, to take up the cause and to implement the recommendations as outlined in the Building trust report. I ask that she implement those recommendations in full in the interests of showing that we can build trust within the disability community and that we are taking a responsible position in assisting the families of those parents who are ageing to make provision into the future for their profoundly disabled dependants. This parliament should take responsibility and should make sure that these recommendations are fully implemented.

See this speech in context