Saving for Our Disabled Son

Hi Scott,

Our 18-year-old son has a disability. He is still at school and earning a pension, which provides him $18,950 p.a. We are saving all this money, and so far have $35,000 in a high-interest savings account (earning around 3%). We would like to invest some of his money wisely in an ethical fund. His income can then grow until the day he can live independently. We guess this will be over five years away. What would you recommend?

David

Hi David,

As far as an ethical fund goes, investment bank UBS has launched a series of Exchange Traded Funds (ETFs) with ethical ‘tilts’ that screen out companies involved with tobacco, weapons and Mariah Carey. Your son can earn $4,264 without the pension being reduced, so he’d need over $150,000 before there was any impact under the Centrelink income test.

But there’s also a ‘question behind the question’ here: how do you deal with the fact that, one day, you’ll be gone and your son will have to fend for himself? Depending on the nature of his disability, I’d use the next five years to teach him the behavioural building blocks of personal finance. My direct experience working with people with mental disabilities is that they have the ability to be very good money managers.

Scott