Creating financial security for persons with special needs

Creating financial security for persons with special needs

By SMU City Perspectives team

Published 23 May, 2023


If there is no scheme in place to protect the inheritance of persons with special needs, the financial responsibility to look after these individuals will eventually fall on the government. It is better for governments to invest ahead of time before financial abuse occurs.

Tang Hang Wu

Professor of Law, Singapore Management University

In brief

  1. Parents of children with special needs face challenges in providing for their loved ones, especially when there are incidences of financial abuse and a lack of financial planning.
  2. The Special Needs Trust Company uses trusts as a vehicle for ensuring the financial security of persons with special needs is met when their parents or caregivers pass on.
  3. Through collaboration and creative problem solving, social entrepreneurs can empower the special needs community and address longstanding issues like the ‘Post-18 Cliff effect’. 

A young man with a mental disability is cheated of his late mother’s life savings by a man claiming to be a friend. A property agent takes advantage of an elderly man with an intellectually-disabled daughter, by pocketing the sales proceeds of a flat the client had engaged him to sell. 

These are two of many cases of vulnerable persons in Singapore being financially abused - a consequence of systemic gaps, insufficient protective measures and a lack of financial planning by families of individuals with special needs.

The scale and urgency of this issue is described by Tang Hang Wu, Professor of Law, in his research publications, various opinion pieces in Singapore and elsewhere. He shares how trusts can be used as a financial planning mechanism to help families support their child with special needs when they are no longer around. Prof Tang is a long-standing board member of the Special Needs Trust Company (SNTC) - a pooled trust scheme with a mission to “provide affordable trust services for persons with special needs in Singapore”. With more societies facing ageing populations and shrinking family sizes, he believes the need for social welfare initiatives like SNTC is becoming increasingly important.

About the SNTC

Launched in 2009 and the first of its kind in Asia, SNTC has to date developed more than 3,000 care plans and over 1,000 trusts - a direct correlation to the number of lives impacted.

While it is a government-initiated trust fund, the scheme itself grew from a ground-up initiative by caregivers of children with special needs from MINDS, who lobbied for a trust of this nature for more than a decade. Under the guidance of its founding board members, SNTC was able to develop a trust scheme that is effectively designed to provide financial security for persons with special needs. Given their expertise and unique insights, SNTC also plays an important role in helping authorities navigate complex cases of elderly financial abuse in Singapore. 

How SNTC Operates

A central component of SNTC is its affordability, particularly for low to middle income families. With 90 per cent to 100 per cent of SNTC’s fees subsidised by the Ministry of Social and Family Development (MSF), parents of individuals with special needs can create an account with a low trust amount of $5,000. Monthly payments will then be made from the inheritance when the parents are no longer around, with the money being safeguarded and managed by the Public Trustee’s office, a government body that makes low-risk income-earning investments to ensure sustainable and long-term care for the beneficiaries. 

Meanwhile, SNTC works with the parents to create a care plan for persons with special needs, ensuring that stipulated sums of money will be disbursed to the beneficiary and other key individuals/institutions, for example, caregiver fees, housing, healthcare services, upon the parents’ demise.

Why this model works in Singapore

Prof Tang highlights two factors that have allowed this model to work in Singapore. The first is access to funding to set up and maintain SNTC’s operations and for this, he first credits the MSF for its farsightedness. He says,“If there is no scheme in place to protect the inheritance of persons with special needs, the financial responsibility to look after these individuals will fall on the government. It is better for governments to invest ahead of time before financial abuse occurs”.

A safe and reliable trustee and dependable custodian of the trust fund are the other key ingredients, especially since the SNTC has a conscious policy not to handle the money or its disbursement. Prof Tang says, “The money never comes into the SNTC bank account. It goes directly to the Public Trustee. When money flows out, it is through instructions to the Public Trustee which then pays the payee directly”. Thus, SNTC’s litigation risk is minimised and parents can feel assured that their money will be safely kept.

Challenges in other Asian societies

Prof Tang acknowledges that these circumstances are unique to Singapore and other developed countries where funding is available and trust in government entities is high. He shares some challenges that have arisen in Hong Kong, South Korea and Japan, where he has been consulted by policy makers and spoken at multiple conferences on this matter. For Hong Kong which modelled its approach after the SNTC, the take-up rate for trusts has been low due to the high entrance threshold prescribed by the government for families. Meanwhile in South Korea and Japan, the equivalent of a Public Trustee does not exist, according to Prof Tang, and therefore trust companies are looking to alternative entities like banks to ensure safekeeping of the money.

Prof Tang shares that funding remains the largest obstacle to setting up a pooled trust scheme, especially for less developed Asian countries which have to prioritise their economy’s post-pandemic needs. Nevertheless, he hopes to see more support and protection given to individuals with special needs in the region, whether through government or ground-up initiatives supported by private philanthropy. 

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Empowering individuals with special needs through innovative models

By identifying and plugging the gaps in their country’s social welfare system, social entrepreneurs could play a key role in protecting and empowering families and individuals with special needs. 

Prof Tang hopes to see more funding and activity in the space and he highlights the problem of the ‘Post-18 Cliff Effect’ as one that is currently underfunded and deserves urgent attention. This describes the situation where individuals with special needs have less access to education, training and employment after the age of 18, since special needs schools only cater to the early years of education. Waitlists for services to help the transition to adulthood can be as long as five years." He says, “I hope to see more thinking and action towards countering the Cliff Effect by providing avenues for persons with special needs to live meaningful lives”.

Stressing the need for creative problem-solving, he shares how SNTC continues to plug the gaps in its own model to assist low-income families even further. This includes the setting up of a subsidised insurance term plan to help parents multiply the financial provisions for their  children with special needs. He encourages budding impact-makers to collaborate with others with complementary skill sets and areas of expertise, and who are committed to putting in the work for the cause. 

Reflecting after more than 15 years of service as a board member on SNTC’s success, he attributes this to the creativity and determination of its founding board members. He says, “because we were starting something new, we had to put all our heads and expertise together to iron out all the difficulties. It really took a village!” Prof Tang believes that SNTC was able to help so many due to the tireless work of its volunteers, which involved Founding Chairman Professor Lim Pin (former Vice Chancellor of NUS), the current Chairman, Moses Lee, Cyril Chua (Chair of the Legal Sub-Committee, Robinson Law Corp), Esther Tan (General Manager of SNTC), Conrad Campos (Harry Elias Partnership), Stacy Choong (Withers Khattarwong), Charlotte Beck (MSF) and Goh Eng Cher (Allen & Gledhill).

"As I prepare to step down as a Board member due to exceeding my term limit, I am sure SNTC is in good hands", Prof Tang adds.

Methodology & References

Hang Wu Tang (2018). Financial planning mechanisms available to persons with special needs In Singapore.Singapore Management University. Retrieved from {}.

Inside the mind of

Tang Hang Wu is a Professor of Law at Singapore Management University. His research focuses on Property Law, Equity and Trusts, Restitution and Unjust Enrichment, Wealth Management and Charity and Non-Profit Law.