Recently, a young adult who had a big epilepsy surgery when she was a child asked on social media about ABLE accounts. After I pulled together some links and resources for her, I realized there may be other self-advocates in our community curious about how ABLE accounts work. For this week’s blog post, I thought I’d share some basic information about ABLE accounts for the self-advocates in our community.
Adults with disabilities who collect social security income (SSI) or who receive other federal benefits like Medicaid know that they cannot have more than $2,000 in savings. If they do, they may lose their federal benefits.
Congress solved this problem with The Achieving a Better Life Experience (ABLE) Act of 2013. The ABLE Act is a law that allows certain individuals with disabilities to create savings accounts where they can set aside money without losing federal benefits like Medicaid or social security income. Funds in an ABLE account can supplement benefits like SSI and Medicaid but will not replace them.
What are the eligibility requirements?
A person of any age may open an ABLE account. You must have a disability that began before age 26 and meet disability requirements (a permanent, disabling condition).
To prove eligibility, you must:
- receive SSI (Supplemental Security Income) or SSDI (Social Security Disability Insurance)
- provide a form signed by a doctor stating that your disability meets the standard and that the disability occurred before your 26th birthday.
A parent or other eligible person can open an ABLE account for you (for example, if you are under 18 or under legal supervision such as guardianship, conservatorship, or power of attorney.)
How much money can I put in an ABLE account?
You can put up to $15,000 per year (up to $100,000 total) in the account before federal benefits like SSI would be affected.
You can have a total of $300,000 in an ABLE account, but you will lose access to federal benefits like SSI/SSDI when you have more than $100,000. (You keep your Medicaid benefit even if you go over the $100,000 cap – only SSI/SSDI are affected.)
If you have a job, you can add an extra $12,140 of your income into your ABLE account, but only if you do not have an employer-sponsored retirement plan. Residents of Alaska and Hawaii can contribute even more — up to $15,180 or $13,960 more, respectively.
You can put your SSI/SSDI check or a paycheck directly into an ABLE account.
Friends and family can contribute to your ABLE account as well.
What are the limits or restrictions?
You may spend funds from your ABLE account only for qualified disability expenses (QDEs). QDEs may include anything that helps improve your health, independence, or quality of life.
The ABLE Act has a list of expenses that would be considered QDEs. These expenses include:
- Employment training and support
- Food (as clarified by SSA)
- Assistive technology and personal support services
- Health, prevention, and wellness
- Financial management and administrative services
- Expenses for ABLE account oversight and monitoring
- Legal fees
- Funeral and burial expenses
- Other approved expenses (including “basic living expenses”).
It’s essential to keep track of what you spend your ABLE funds on. Keep your receipts and a log. The government will review your expenses once a year.
Will they take away my Medicaid if I have money in an ABLE account?
No. Your Medicaid will remain in place even if you go over the $100,000 cap.
All 50 states now have ABLE accounts. You do not need to open an ABLE account in the same state where you live. Still, there might be state tax benefits available if you open the ABLE account in your state.
Beware of the Medicaid payback clause
In some states, the ABLE program may have a “Medicaid payback clause.“ This requirement only applies to Medicaid recipients.
This provision allows Medicaid to recover payments from any money left in an ABLE account when you die. Some states have eliminated this Medicaid payback provision, so you may decide to open your ABLE account in a different state.
The ABLE National Resource Center website offers three valuable tools to help you select the ABLE program that best meets your needs:
- Three State Program Comparison Tool
- Search by ABLE Program Features Tool
- Map Tool
Can I have an ABLE account and receive SSI?
Being an SSI recipient is one way to prove you are eligible for an ABLE account.
You will not lose your SSI as long as you do not exceed the maximum amounts ($15,000/year plus work earnings up to $15,180 depending on your state; and $100,00/total in the account).