Myths Busted: ABLE Accounts

By Marlene Ulisky, Disability Benefits Expert, ABLE National Resource Center

We've shared a lot of information about the Achieving a Better Life Experience (ABLE) Act and ABLE accounts on the Choose Work! Blog. That's because if you're eligible for an ABLE account, it can be a powerful financial tool to help you save more money for qualified disability expenses. Today, Marlene Ulisky of the ABLE National Resource Center discusses and debunks some of the myths that they hear from people about opening an ABLE account.

ABLE accounts are Section 529A savings accounts that allow eligible persons with a significant disability that began before age 26 to save without an effect on most means-tested benefits. The savings grow tax-free and may be used for qualified disability expenses (QDEs). QDEs fall into 11 broad categories and may include expenses for housing, basic living or items or services related to health, prevention and wellness. Other examples of QDEs related to work include:

• Transportation to and from your place of employment
• Employment training and support
• Job coaching
• Interview preparation and resume development
• Costs associated with certificates and accreditation
• Assistive technology

To increase savings, family members, friends or an employer can also contribute to an individual's ABLE account. Money contributed by these third parties is not counted as income by public benefit programs.

At the end of 2018, more than 35,000 individuals established ABLE accounts in one of the 41 state programs, or the District of Columbia, with a combined savings of over $170 million. However, there are many other ABLE-eligible individuals who have delayed enrollment due to myths surrounding ABLE accounts. Let's take a look at 3 of the most common myths to find out what's true.

MYTH: If I save over $2,000, I will lose my Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI) and Medicaid.

While it is true that SSI and Medicaid programs have a $2,000 resource limit for an individual, the ABLE Act offers an exception: The first $100,000 in an ABLE account is not counted when your eligibility for SSI is determined.

If you have more than $100,000 in an ABLE account, the excess amount counts against the resource limit. When the resource limit is exceeded, your SSI payment is temporarily suspended, but Medicaid continues. This special rule only applies if savings, other than in the ABLE account, do not exceed the $2,000 resource limit.

If you receive SSDI benefits, there is no limit on how much you can save.

MYTH: If I save all of my earnings in an ABLE account or have it directly deposited, Social Security will not count the earnings.

When you're working and depositing earnings into an ABLE account, Social Security does not change the way they look at your earnings. They apply their regular income counting rules to earnings and to other income. While direct deposit of earnings into an ABLE account can be used and is encouraged, it is not a way to avoid income counting rules.

MYTH: An unlimited amount of money can be deposited into an ABLE account.

The total annual contributions for all contributors in 2019 is the same as it was in 2018: $15,000.

However, a new rule allows ABLE account owners who work and earn income to contribute an additional $12,140 of their gross income into their ABLE account if they 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. Contributions grow tax-free, and the total aggregate account limit over time is subject to the state limit for 529 savings accounts, which currently ranges between $100,000 and more than $500,000.

Join us for the March WISE webinar

Now that you've learned the truth about these three ABLE myths, are you interested in learning more about ABLE programs? Join us on Wednesday, March 27, 2019, at 3 p.m. ET for the next Work Incentives Seminar Event (WISE) webinar! This free event will include even more information about how ABLE accounts can help certain people with disabilities as they pursue financial independence through work.

Learn more

Find more information about ABLE on the Choose Work! Blog and ABLE National Resource Center's website:

• Getting to Know the ABLE Act
• ABLE Accounts: What You Should Know
• Understanding ABLE
• Money Mondays: Tips for Opening Your ABLE Account
• ABLE Materials Toolkit or Kit de herramientas del material de ABLE (Español)
• Strategies for Funding an ABLE Account

About the writer

Marlene Ulisky is the manager of financial empowerment at the ABLE National Resource Center and works at the National Disability Institute as part of the Training and Technical Assistance Team. Previously, she worked at Social Security for 35 years and the Florida Office of Vocational Rehabilitation, where she established the Partnership Plus program under the Ticket to Work program.

Ticket to Work

Social Security's Ticket to Work (Ticket) program supports career development for people ages 18 through 64 who receive Social Security disability benefits (SSI or SSDI) and want to work. The Ticket program is free and voluntary. It helps people with disabilities move toward financial independence and connects them with the services and support they need to succeed in the workforce.

To learn more about the Ticket program, call the Ticket to Work Help Line at 1-866-968-7842 or 1-866-833-2967 (TTY) Monday through Friday, 8 a.m. to 8 p.m. ET. Ask a representative to send you a list of service providers or find providers on your own with the Ticket program Find Help tool.