ABLE Account Decision Guide Series

ABLE Accounts and Working People with Disabilities

SSI and ABLE Accounts for Account Owners Who Work

See Social Security’s Red Book – A Guide to Work Incentives (2020 Edition),; Understanding Supplemental Security Income (SSI) Work Incentives (2020 Edition), 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, 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, 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 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,; VR Toolkit for SSI Youth: Module #7 – Supporting Asset Development and Accumulation, 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,
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,

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.