For most people, federal stimulus payments have provided a welcomed
and much-needed injection of funds during the challenging COVID-19 pandemic.
However, for people with intellectual and developmental disabilities (IDD), and
those who love them, the stimulus payments may cause concern that the
additional income will threaten eligibility for critical programs.
Living with a disability can be very expensive. Medical
costs, equipment, additional services and programs all add up. The Achieving a
Better Life Experience (ABLE) Act recognizes the financial strains of living
with a disability by allowing certain individuals the opportunity to save and
fund qualified expenses without threatening their eligibility to critical
benefits, such as Medicaid and Supplemental Security Income (SSI).
Here is some essential information about ABLE accounts that
may help you determine if an ABLE account is right for you and your loved one:
- Eligible individuals are U.S. citizens or legal
residents who developed the onset of their qualifying disability
before the age of 26.
- Both physical and mental disabilities may qualify
someone for the program. Here is a List of Compassionate Allowances Conditions from the Social Security Administration that qualify.
- An individual is allowed only one ABLE account.
- All earnings from the account remain untaxed if
the money from the account is used for qualified disability expenses.
disability expenses include such things as: health and wellness, education and
training, housing, basic living expenses, assistive technology and legal
- Family and friends can contribute to someone’s account up to
the federal gift tax limit,
which is $15,000 through 2020.
- If your loved one works and does not
contribute to an employer-based savings plan such as a 401(k) or 403(b) program,
he may be allowed to contribute an additional amount each year to his ABLE account.
- Up to $100,000 in an ABLE account is exempt
from the Supplemental Security Income (SSI) asset limit and even if that level
is reached, the beneficiary will continue to be eligible for Medicaid.
- An ABLE account can be used instead of, or
together with, a supplemental needs trust to maintain a beneficiary’s eligibility
- Various types of ABLE accounts are offered by
different states, and people can choose the account that works best for them,
not limited to their own state’s version.
An ABLE account can be a great way to save for unexpected
expenses and empower individuals to save for their dreams. As is typical with
financial programs, there are many details associated with an ABLE plan. Check
out www.ablenrc.org for more
information and support options.