ABLE Account Decision Guide Series

ABLE Accounts and Working People with Disabilities

SSDI and ABLE Accounts for the Working Person

SSDI is not a means-tested benefit, but countable earnings that are more than the current year’s substantial gainful activity (SGA) amount can lead to a short-term suspension or long-term termination of benefits. Using the SSDI work incentives can often allow for a continuation of benefits while working and may create a positive cash flow that can be used to pay for education, training, work-related expenses and/or to contribute to an ABLE account.  See Trial Work Period, https://www.ssa.gov/oact/cola/twp.html.

This part of the Decision Guide assumes the person is an SSDI beneficiary, keeping in mind that, in some cases, they may also receive an SSI payment or state supplement.  If countable income, including the SSDI payment, is less than the SSI maximum payment available, a person usually qualifies for an SSI supplement, plus automatic Medicaid eligibility in most states.

The TWP includes any nine months, within a period of 60 consecutive months, during which the SSDI beneficiary can earn any amount and continue to qualify for their full SSDI payment. A month with earnings above a certain amount ($970 in 2022 and typically adjusted each year) is enough to use one TWP “service month.” Eighty or more hours devoted to self-employment in a month, even with zero net self-employment income, is enough to count as a TWP service month.

→Yes, since the person will be eligible for both the SSDI payment and a paycheck during each of nine TWP months, this will create a monthly surplus in cash flow that can be used to meet expenses related to work and/or to allow the beneficiary to contribute to their ABLE account. The extra cash flow will generally be equal to monthly take home pay, less any extra expenses associated with working.

→No, cannot presently benefit from extra cash flow generated during the TWP (see Extended Period of Eligibility discussion below).

The EPE begins immediately after the ninth TWP month and runs for 36 consecutive months. When a beneficiary first has SGA-level countable earnings ($1,350 per month for most beneficiaries; $2,260 for the statutorily blind in 2022), during the EPE, SSA will look to see whether they can apply other work incentives like unsuccessful work attempt, averaging of income and subsidy to either reduce or disregard that period of work. All work incentives can be found in the Red Book at ssa.gov/work. If not, then they will be eligible for an SSDI payment for that month and the next two months (known as the “grace period”). Thereafter, the right to an SSDI payment each month will depend on whether the beneficiary’s countable earnings are at or below the SGA level.

→Yes, this means the person will be eligible for a paycheck and an SSDI payment for any EPE month when countable earnings are below the SGA level (and for a three- month grace period the first time SGA level work occurs during the EPE). If the person continues to have some earnings each month, each of these SSDI payment months will create a monthly surplus in cash flow that can be used to meet expenses related to work and/or to allow the beneficiary to contribute to their ABLE account. The extra cash flow will generally be equal to monthly take home pay, less any extra expenses associated with working.

→No, cannot benefit from extra cash flow generated during the EPE.

After the 36th EPE month, when the grace period has been used, the beneficiary’s SSDI benefits will be terminated the first time they have countable earnings above the SGA level. If the beneficiary has not used the grace period, he will receive three more monthly payments before payments are terminated after that 36th month. However, if the EPE ends and the beneficiary’s countable earnings are at or below the SGA level, SSDI payments will continue until they earn at the SGA level.

→Yes, cannot benefit from extra cash flow generated for non-SGA months as SSDI payments will be terminated.

→No, since the beneficiary will continue to be eligible for an SSDI payment until this first month of SGA-level earnings in or after the EPE, this creates a potential cash flow (if working at or below the SGA level) that can be used for expenses related to work or the work goal and/or for contributions to an ABLE account. If the person had no SGA level earnings during the EPE, they will be entitled to SSDI payments during a three-month grace period the first time SGA level earnings occur  after the EPE, with SSDI payments then terminated. Note: When SSDI is terminated because of SGA level earnings, after the EPE, the beneficiary can later have SSDI benefits reinstated if requested within 60 months if they continue to have the same or a related disability that prevents them from earning above  the SGA level. See Expedited Reinstatement https://www.ssa.gov/disabilityresearch/wi/exr.htm.

↵ Restart

 

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.