What is an ABLE Account?

People who live on disability income often find themselves caught in a catch-22. They need money to work toward educational goals and not rely solely on disability payments but taking any steps to improve their financial situation results in the loss of disability payments. This type of setup does not give individuals the freedom to improve their quality of life.

ABLE accounts give individuals a way to break that cycle and get more money for disability-related expenses without losing access to governmental support. If you are looking for more in-depth assistance with your disability case or a loved one’s case, get in touch with an experienced Social Security disability lawyer.

The Goal of ABLE Accounts

The ABLE Act strives to help disabled individuals enjoy a higher quality of life by providing them with the opportunity to access a tax-free savings account. Under this act, an individual can have an ABLE account that they and their loved ones can deposit funds into. These funds can be accessed for expenses related to their disability.

To have an ABLE account, you must prove your disability. This involves receiving SSI for a disability that started prior to the age of 26, receipt of disability insurance benefits for a disability that began prior to the age of 26, or certifying that you meet the criteria for a disability certification before the age of 26.

Do ABLE Accounts Impact My Benefits?

The number one question for disabled individuals interested in opening an ABLE account is, “Will my ABLE account impact my benefits?” After all, it’s not very helpful to get money from an ABLE account but suddenly lose your access to government-funded healthcare or supplemental income. However, earnings and distributions from an ABLE account do not count as taxable income.

If you are receiving Supplemental Security Income, you likely wonder how this money could decrease or eliminate your monthly payments. The first $100,000 deposited into your ABLE account does not count as a resource. Once your account has more than $100,000 in it, those funds do count. Your SSI payments may stop once you have more than your permitted amount of resources. However, payments do resume once your account is back below that threshold.

Those who receive Medicaid have similar questions. However, even if your account exceeds the SSI limit for monthly payments, you do retain your Medicaid eligibility. You simply have to continue to meet every other Medicaid eligibility requirement. This ensures that you do not lose the healthcare you need to manage your disability and your overall health.

The only way that funds go back to the government is after a recipient’s death. If the beneficiary passes away and there are funds remaining in the ABLE account, those funds are used to reimburse Medicaid for payments made for the beneficiary.

Who Can Deposit into ABLE Accounts?

Anyone can deposit money into an ABLE account. This includes individuals, companies, trusts, estates, and corporations. There are limits to how much each individual can deposit. For taxes, only the first $15,000 deposited by an individual falls under the gift tax exemption. Furthermore, each state has limits outlining how much money an ABLE account can hold at any given time.

How Can ABLE Account Money Be Used?

ABLE money can be used for any QDE, or qualified disability expense. There is a broad definition used for this term, allowing beneficiaries substantial freedom in how their money is used. Qualifying disability expenses include:

• Basic living expenses
• Housing
• Transportation
• Education and job training
• Job support
• Wellness needs
• Health
• Assistive technology
• Financial management assistance
• Legal fees
• Fees for ABLE account monitoring
• Funeral and burial expenses

What If My State Doesn’t Have ABLE Accounts?

Not all states run an ABLE account program. However, you can still sign up for an ABLE account even if you live in one of those states. You simply have to sign up through one of the participating states. Look carefully over each state’s account limits and other requirements to make the best choice for your needs.

Skilled Help from a Social Security Disability Lawyer

Those who live with disabilities should have the freedom to improve their quality of life without losing access to the programs they need to stay healthy. For guidance with SSDI, SSI, ABLE accounts, and other disability issues, contact an experienced Social Security disability attorney today.