ABLE Account Decision Guide Series

Ready and ABLE to Work and Save

The Case for Working

The U.S. Labor Statistics report for 2021 states that, across all age groups, persons with disabilities were much less likely to be employed than those without disabilities. There are a few reasons for this. Often people with disabilities are unaware that it is possible for them to work, understand which type of jobs are available to them or that they can return to a similar job. Added to that, they often have additional disability-related expenses, as well as concerns about keeping needed means-tested benefits like SSI and Medicaid. Saving earned income in an ABLE account is one strategy that could be helpful to consider, though there are others.

If this sounds like you, please read:

Work is an option for people with disabilities, whether they are receiving a benefit from SSA or not. There are many different types of jobs. A person with a disability can work for an employer on a job site, from home or can be self-employed. The links below will introduce you to some working people with disabilities and you will learn what work looks like for them. You will also learn about the strategies they used to find and keep their jobs, as well as how they use their ABLE accounts to manage and save the income that comes from working.

As a person with a disability, you may feel overwhelmed by the activities associated with finding, training for, and keeping a job. You might feel like it is too much to do on your own, yet don’t know who could help you or what help might be available.

If you feel this way, please read:

In exploring this ABLE Decision Guide, you have seen that there are many things to consider when you think about getting a job and many ways ABLE accounts can be used to support you. It can be overwhelming though, especially without some help. There are services that can help you find a job and support you as you learn a job and/or move up a career ladder. Some of these services are available to anyone with or without a disability and some are designed specifically to help people with disabilities. The types of employment services used, and how they are used, will vary based on your needs and personal circumstances. The resources below are a great place to start.

  • Simon Cantos Spotlight - This short article tells Simon Cantos’ story: how he advanced in his career as a person with a significant disability, the help he received and how he uses his ABLE account to maintain his employment while also contributing to his ABLE account for other goals.
  • Vocational Rehabilitation | Workers with a Disability - Vocational Rehabilitation is a federal service available to help people with disabilities train for, find and keep jobs. This Career One Stop webpage describes the services available to people with qualifying disabilities whether they receive a disability benefit or not.
  • SSA Ticket to Work - The SSA Ticket to Work website offers SSA disability beneficiaries free job support and services. Utilize the “Find Help” tool on this webpage to locate a service provider who can help you develop an employment plan and access SSA work incentives and employment supports.
  • Alternative Finance Programs and ABLE for Assistive Technology - This podcast, hosted by Chris Peterson of Penny Forward, features Laurie Schaller, a Manager of Financial Empowerment at National Disability Institute, who explains how assistive technology can help people with disabilities on the job or in their home. The interview includes strategies to consider and stories of people who have used these programs to afford assistive technology, save money and improve their lives.

The need to maintain eligibility for means-tested benefits may be a powerful reason why people with disabilities may not realize that getting a job is an option for them. Both being determined eligible and maintaining that eligibility for means-tested benefits like SSI or Medicaid can be difficult to do. Those who receive these benefits may not realize that work supports exist. Many people may not know that the supports can help a person to work and increase their income and savings. Work supports offer a chance to try working and, if the job does not work out, there are ways to re-start benefit payments without needing to reapply.

If you want to learn how work income affects your benefits, please read:

Income from work may impact your means-tested benefits like SSI or Medicaid. These benefits are often critical to the health, safety and well-being of people who receive them. To make sure that income you save from a job does not negatively impact your eligibility for benefits, it is important to access information from reputable sources and use strategies like opening an ABLE account. To learn more, check out the resources below:

  • Nathan Turner Blog - In his blog, ABLE account owner Nathan Turner tells the story of how he realized working would be possible for him and how he now helps others in similar situations to see the benefits of working. He also shares how he uses his ABLE account to keep his job and increase his financial security.
  • ABLE Accounts and Employment Success - This podcast features Kathy DeAngelo, a Certified Benefits and Work Incentives Planner for Chenango-Delaware-Otsego (CDO) Workforce in upstate New York. Listen as Ms. DeAngelo shares how her office informs Social Security disability beneficiaries about ABLE accounts and why owning an ABLE account is critical for people who need a safe place to save some, or all, of the money earned from a job.
  • ABLE Accounts and Working People with Disabilities - This ABLE Decision Guide offers resources and strategic guidance to ABLE account owners who seek to achieve maximum levels of independence through employment.
  • 2022 Update – How do ABLE accounts affect my Social Security disability benefits? - Published by the Social Security Administration (SSA) Ticket to Work program, this blog includes information on ABLE accounts and SSA work supports.

Meet Some Working ABLE Account Owners with Disabilities

Work is an option for people with disabilities, whether they are receiving a benefit from SSA or not. There are many different types of jobs. A person with a disability can work for an employer on a job site, from home or can be self-employed. The links below will introduce you to some working people with disabilities and you will learn what work looks like for them. You will also learn about the strategies they used to find and keep their jobs, as well as how they use their ABLE accounts to manage and save the income that comes from working.

If hearing these stories has made you reconsider working, please go to: Things to think about when you think about work.

Saving to Achieve Goals in Your ABLE Account

You, as a person with a disability, or others can contribute up to $17,000 per year into an ABLE account. When you work, you may be able to contribute even more from your employment income if you or your employer do not make a deposit into a retirement plan in the calendar year. This is a great opportunity to save towards a retirement goal with the added bonus that this money grows tax-free when invested in an ABLE account. To learn more, please go to:

  •  ABLE To Work Act  – This fact sheet includes information on the additional amount which can be deposited, identifies the types of retirement accounts or annuities and how an ABLE account can be funded.
  •  Finding the Funds to Save in an ABLE Account  – This decision guide examines key sources of contributions to an ABLE account. It includes earnings, using SSA work incentives and other key strategies.
  •  Setting Your Financial Goals – Setting your financial goals is an important step to achieving financial well-being and maximizing the benefits of being an ABLE account owner. Setting your goals is the first step in creating a roadmap to a better financial future.

Conclusion

No matter where you are in your employment decision making process, the ABLE National Resource Center has educational tools and resources to help you increase your knowledge of personal finances and achieve a higher level of financial stability and well-being.

Knowing how to manage your money from employment in your ABLE account will help the account to grow tax-free to best support you in achieving your goals and dreams. The Decision Guide, Managing Your ABLE Account, may be helpful to you as you move towards making the most of your ABLE account.

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Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.

ABLE Account Decision Guide Series

Ready and ABLE to Work and Save

 

Step 2: Learn Who Can Open an ABLE Account

The Decision Guide, “Am I ABLE-eligible,” will be helpful in understanding if you are eligible to open an ABLE account. To learn about other decision guides, watch the introductory video, Using the ABLE NRC Decision Guides.

If you are age 18 or older, you may open one ABLE account.

Additionally, a potential ABLE account owner may select someone to assist them in opening their account. This may be one-time assistance provided by a trusted family member or friend. The ABLE account owner may also decide to ask for ongoing formal or informal assistance. Follow this decision guide for more information on assistance or tools to become financially empowered. The ABLE plan can provide more details on specific situations and strategies around who can open and manage the account. For ongoing formal assistance, the ABLE account owner may want to sign one or more powers of attorney which will allow the individual(s) assisting them to have various options with the ABLE account.

An individual with capacity, who has not selected someone to help them open/manage an account, or chooses not to select someone, may want to review the Internal Revenue Service priority list called a “hierarchy” for opening the account, for direction:

  • Individual (with capacity *) with the disability
  • Individual selected by the individual with a disability or the eligible individual’s agent under a power of attorney, legal guardian or conservator
  • Spouse, parent, sibling, grandparent
  • Representative payee (RP) (individual or organization)**

* Capacity refers to capability in the eyes of the courts. With ABLE accounts, it refers to having the legal authority to open an account. An adult with a disability, who does not have a legal guardian or conservator appointed during legal proceedings, is assumed to be capable of opening and managing an ABLE account unless a court has determined otherwise.

Note that there is a difference between having capacity and wisely managing finances!

** In order for a representative payee to open an ABLE account, the account must meet all Social Security Administration representative payee titling and other policy rules to be acceptable to hold saved benefit payments called conserved funds. The ABLE account must also show the person with a disability owning the account, but with the RP holding funds in the account in a management capacity. This is called a fiduciary relationship. The person with a disability cannot have access to the conserved funds. Examples are included in the SSA webpage: Payee and ABLE accounts.

A parent or an authorized legal representative may open an ABLE account for a child under age 18. When the account is opened by someone other than the person with the disability, the person opening the account must self-certify that there is no other individual higher on the priority list who is willing and able to open and manage the account. Although it is not necessary to have an attorney, accountant, financial planner or tax advisor to help open the account, a person may choose to consult with one or more professionals prior to opening an ABLE account.

From time to time, the individual with a disability with legal capacity may remove and replace an individual who can establish and control the ABLE account. The person who can establish and control the account is called someone with “signature authority.” A person with signature authority may name one or more successor signatory, consistent with the same ordering rule, if the beneficiary lacks the legal capacity to do so. Consult the ABLE plan disclosure document for specific information.

As a representative payee (RP), if the ABLE plan meets all of Social Security Administration’s RP rules, including proper titling of the account, you can save money from SSA benefits in the account. This includes transferring existing conserved benefits from a non-ABLE account into the ABLE account. In general, if there is a change of payee, any funds saved on the beneficiary’s behalf, and any interest/gains earned, should be returned to SSA to reissue to the new payee or directly to the account owner if he or she no longer needs a payee. Contact SSA for case-by-case instructions.

If the account does not meet all of the Social Security Administration’s RP rules, you can, however, still help the person with a disability save personal money, a personal needs allowance or other funds in the account. These may include earnings, economic stimulus payments, unemployment compensation, alimony or funds transferred from a special needs or pooled trust into the ABLE account.*

And even though a person has a RP, the person with a disability is encouraged to take steps to learn financial skills, which may qualify them to be capable of managing their own money and benefits at a future date. When a person has developed the skills necessary to manage their own money and benefits, there is a process that allows a person to request that the Social Security Administration remove a representative payee. A person can ask for a doctor's statement showing that there has been a change or improvement in a condition, and that the doctor believes the person can manage or direct the management of their own money and benefits; or an official copy of a court order saying that the court believes that the person can care for their needs and manage their funds.

Free online financial wellness training or virtual financial counseling and coaching can help in building money management skills.

* Please note, income counting rules still apply to earned and unearned income that is “due to the beneficiary,” such as child support, spousal support, annuity or settlement payments, etc., even when it is directly deposited into an ABLE account.

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Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.

ABLE Account Decision Guide Series

Ready and ABLE to Work and Save

SSI and ABLE Accounts for Account Owners Who Work

See Social Security’s Red Book – A Guide to Work Incentives (2020 Edition), https://www.ssa.gov/ssi/text-resources-ussi.htm; Understanding Supplemental Security Income (SSI) Work Incentives (2020 Edition), https://www.ssa.gov/ssi/text-work-ussi.htm. This reference is updated mid-year each year.
The Social Security Administration (SSA) excludes the first $65 of gross monthly earned income ($85 if no unearned income) and next excludes $1 for every additional $2 in gross earnings (50 percent exclusion) when calculating the SSI payment. This exclusion ensures that the reduction to SSI through earnings is gradual and, in many cases, will create a monthly surplus in cash flow that can be used to meet work expenses (e.g., transportation, child care) or to allow the person to contribute to their ABLE account.
SSA reduces countable earned income if the SSI recipient pays out-of-pocket for items related to a disability or medical condition that enables him or her to work. IRWEs include, for example, copays for doctor visits or medicine, expenses for special transportation related to a disability and expenses to modify a home or a vehicle to make it possible for a person to work. IRWEs are in addition to the general $20 + $65 disregards plus the 50 percent exclusion. See Spotlight on Impairment-Related Work Expenses, https://www.ssa.gov/ssi/spotlights/spot-impairment-relatedwork.htm. An SSI beneficiary may pay for an IRWE through an ABLE account distribution or from their earned income. Paying for an IRWE from an ABLE account will likely increase the person’s monthly cash flow more than by paying for the expense from their monthly income. But, by paying for an IRWE with monthly earned income, ABLE funds may continue to grow tax-free for a longer period of time. The person may wish to discuss these options with a work incentives counselor.
The SEIE is for students under age 22 who work while attending school regularly and have been approved for SEIE by SSA. This work support excludes monthly income up to $2,040* per month/$8,230* per year in 2022, before applying the general and earned income disregards ($85 plus 50 percent exclusion towards earned income.  See Spotlight on Student Earned Income Exclusion, https://www.ssa.gov/ssi/spotlights/spot-student-earned-income.htm. Since SSI recipients must keep resources under a $2,000 limit (individual or $3,000 couple), the extra cash flow created by the SEIE may create a great opportunity to contribute large amounts of monthly earnings into an ABLE account while maintaining countable resources within SSI limits. By depositing extra money into the ABLE account, the ABLE account owner is not pressured to spend down their money right away if savings are approaching SSI’s resource limit. The beneficiary is then able to thoughtfully plan for qualified disability expenses (QDEs), such as education or work-related expenses, to be paid from the ABLE account in a few months or years later.
BWEs are SSI exclusions that reduce countable earned income for work costs. BWEs include, for example, service animal expenses, transportation expenses to and from work, costs for meals during work hours and all federal, state, Social Security and Medicare (i.e., FICA) taxes withheld. Because BWEs exclude from earned income all expenses that make it possible for the person to work, including those not related to blindness, this is a powerful work incentive. BWEs, in addition to the $85 plus 50 percent exclusion, are deducted after the 50 percent exclusion, resulting in less earnings being counted, which results in a dollar-for-dollar increase in the SSI payment in many cases. See Spotlight on Special SSI Rules for Blind People Who Work https://www.ssa.gov/ssi/spotlights/spot-blind-work.htm. An ABLE account owner can pay for a BWE from their monthly income or from their ABLE account. A work incentives counselor should be helpful in determining when it is in the beneficiary’s interest to pay for BWEs from monthly income rather than from their ABLE account.
Allows a person to set aside income and/or resources, that are otherwise counted in determining SSI eligibility or payment amount, to pay for items and services to support a work goal. Money set aside in an approved PASS will not count as income and resources accumulated in a dedicated PASS account will not count toward SSI’s $2,000 resource limit for an individual. Examples of money excluded and not counted using a PASS include countable SSDI payments and countable wages. See Spotlight on Plan to Achieve Self Support, https://www.ssa.gov/ssi/spotlights/spot-plans-self-support.htm; VR Toolkit for SSI Youth: Module #7 – Supporting Asset Development and Accumulation, https://ssiyouthtoolkit.org/topic/7/home. A PASS can be used to fund any item or service that will contribute to a feasible and viable employment goal which results in the elimination of the SSDI payment and a significant reduction in the SSI payment amount. Common items that can be paid for through a PASS include a vehicle or extended job coaching not provided by VR or a waiver, a laptop or tablet computer and computer adaptations to allow the person with a disability to benefit from an education or training program, that will make it possible for the person to work. When a PASS is used to either obtain or retain SSI when income increases, it results in automatic Medicaid in most states. Many people may prefer to immediately pay for expenses using the ABLE account without all the paperwork and lack of certainty concerning if or when a PASS will be approved.

When an SSI Recipient Contributes Earnings to Their ABLE Account 

SSA policies do not allow for an income exclusion when the ABLE account owner’s earnings are contributed to the account. However, those same contributions, when used for Blind Work Expenses or set aside in an approved PASS account (see above) or used to pay for impairment related work expenses, will reduce countable income and result in a higher SSI payment, in many instances. The SSI recipient’s ABLE account, which may include contributions from their earnings, is treated by SSI as an exempt resource. This is because the value of an ABLE account, up to $100,000, is excluded and not counted toward SSI’s $2,000 resource limit for an individual or $3,000 for a couple. See Spotlight on Achieving a Better Life Experience Accounts, https://www.ssa.gov/ssi/spotlights/spot-able.html.
This is because the value of an ABLE account, up to $100,000, is excluded and not counted toward SSI’s $2,000 resource limit for an individual or $3,000 for a couple. See Spotlight on Achieving a Better Life Experience Accounts, https://www.ssa.gov/ssi/spotlights/spot-able.html.

ABLE Account Distributions for Qualified Disability Expenses Can Support a Work Goal with No Change of SSI Eligibility or Payment Amount 

This would include many expenses that would support a work goal, such as education or training costs (e.g., tuition, textbooks, a computer and software), transportation to school or the workplace, and assistive technology to benefit from an education program or to succeed at work. See Decision Guide, Determining Whether Something Is a Qualified Disability Expense (QDE); and ABLE Case Summary #4, ABLE Accounts and Qualified Disability Expenses: Expenses That Do or Do Not Meet QDE Criteria. Please note, food and grocery delivery costs have been added as ABLE.

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Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.

ABLE Account Decision Guide Series

Ready and ABLE to Work and Save

The first $100,000 of an ABLE account balance does not count toward the SSI resource limit. To become eligible or remain eligible for SSI, the amount of countable ABLE resources above $100,000, combined with other countable assets, can be no more than $2,000 for a person over the age of 18. This limit varies from $3,000 for a couple or it may be up to $5,000 for a child under age 18 living with both parents (https://secure.ssa.gov/apps10/poms.nsf/lnx/0501110530). These SSI issues, related to ABLE accounts, are covered in Social Security’s Spotlight on ABLE Accounts, https://www.ssa.gov/ssi/spotlights/spot-able.html.

Are ABLE account savings either alone or combined with non-ABLE resources:

$100,000 or less?      More than $100,000?

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Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.

ABLE Account Decision Guide Series

Ready and ABLE to Work and Save

Seek item or service through the public program. Could include a laptop or tablet for home use, the cost of training to use specialty software (see Assistive Technology (AT) as a QDE).

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Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.

ABLE Account Decision Guide Series

Ready and ABLE to Work and Save

Is family member willing to contribute from his/her ABLE account to the beneficiary’s ABLE account?

yes       no 

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Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.

ABLE Account Decision Guide Series

Ready and ABLE to Work and Save

Person is eligible to open an ABLE account at any age!

Can select an appropriate ABLE plan and enroll with an initial deposit. Can then start making deposits to the account, up to annual limits, to later be used for qualified disability expenses.

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Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.