Meet Your Financial Goals through Work and an ABLE Account
By Marlene Ulisky, ABLE National Resource Center
Did you know that one in five families has a member with a disability? Further, of those with a disability, about one-third are working age adults who are twice as likely to live in poverty as those without a disability. A major cause of that poverty is a low rate of employment.
If you receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) and are working or want to work, today's blog post explains how an Achieving a Better Life Experience (ABLE) account can increase your financial well-being.
ABLE and SSI
Many individuals with a disability rely on public programs that are based on financial need (also called "means-tested" programs) to receive benefits such as health care, food and housing assistance. A law passed in 2014, the Stephen Beck Jr. Achieving a Better Life Experience (ABLE) Act, disregards money placed in ABLE accounts when determining eligibility for most federally-funded means-tested benefits such as SSI, Supplemental Nutrition Assistance Program (SNAP), Medicaid and Housing and Urban Development (HUD) housing assistance.
While eligibility for SSI has resource limits (in 2019, $2,000 in resources for an individual, $3,000 for a couple), funds up to $100,000 in ABLE account savings are not counted when Social Security determines SSI eligibility. If your ABLE account has more than $100,000, Social Security will count any funds that exceed that $100,000 toward your resource limitations.
Any amount of ABLE savings, including funds above $100,000, does not affect eligibility for Medicaid, SNAP, HUD or SSDI.
Eligibility
To be eligible to open an ABLE account, you must have a significant disability that began before the age of 26. If your disability began before you were 26 and you receive SSDI or SSI, you are automatically eligible. Others who do not receive a disability benefit from Social Security may qualify, too, if they have a significant disability that began before age 26 and they obtain a disability certification from their physician.
Savings and Contributions
You may contribute up to $15,000 per year into an ABLE account, including contributions from third parties such as family, friends and Special Needs or Pooled Trusts. These contributions do not count as income.
In 2017, Congress passed and the President signed into law the "ABLE to Work Act," which allows certain ABLE-account owners who work to contribute above the $15,000 annual limit. To be eligible, you or your employer can not have contributed to an employer-sponsored retirement account that year. If you're eligible, ABLE to Work allows you to save up to an additional $12,140 per year if you live in the continental U.S. (the limit is higher for individuals living in Hawaii and Alaska).
Employer contributions to your ABLE account are not counted as income by means-tested benefit programs. However, the contribution is taxable income and will be reflected on your W-2.
Earned income is still subject to income counting rules. There is no change in the way Social Security counts earned or unearned income in determining your monthly payments whether this income is deposited into the ABLE account or not, and there is no change in the SSA work reporting responsibilities when you are employed.
Using ABLE Funds
Employment and the use of Social Security Work Incentives provides you with the opportunity to save more in an ABLE account for "qualified disability expenses" (QDE). QDEs are items or services that increase your health, independence and quality of life. Examples of employment-related QDEs may include: education to help find a better job or to advance in a career, job coaching beyond what is covered by other providers if needed, accreditations or certificates needed in your chosen job or career, assistive technology, a personal attendant, transportation and others.
Tax Advantages
Post-tax dollars go into ABLE accounts and grow tax-free. As an ABLE-account owner, it is important to investigate all potential, no-cost funding sources for any employment-related items or services so that you can continue to save and grow your ABLE funds as long as possible. You can also use Social Security Work Incentives and tax incentives from the Internal Revenue Service such as the Saver's Credit and the Earned Income Tax Credit to increase your potential savings.
Social Security employment supports, such as the Ticket to Work program and other Work Incentives, and an ABLE account can support your work goals, provide a bridge to employment, increase your financial well-being and provide a better, brighter future.
Learn More
To find more information about ABLE accounts, visit the ABLE National Resource Center at www.ablenrc.org. If you would like information about the Ticket to Work program and other Work Incentives, 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.
About the writer
Marlene Ulisky is a Disability Benefits Expert with the ABLE National Resource Center and a Manager of Financial Empowerment and Disability Benefits at the National Disability Institute.
