ABLE Account Decision Guide Series

Finding the Funds to Save in an ABLE Account

Keep in mind, a part of the lump sum could be contributed in one calendar year and a second contribution could be made in the next calendar year, so long as total contributions in each calendar year do not exceed contribution limits for the year. If the beneficiary receives SSI or another means-tested benefit, be aware of any rules for counting retained resources (SSI recipients generally have 9 months to dispose of an SSI or SSDI lump sum before it counts as a resource). Please note: Retroactive benefits are generally counted as income in the month received. If the maximum amount has been contributed into the ABLE account and there are remaining funds saved in a non-ABLE account after the 9 month period, there may be a need to spend down the additional funds or establish a pooled or special needs trust.
Keep in mind, if the beneficiary has a representative payee, who is responsible for managing SSI or Social Security payments, directly depositing the SSI or Social Security monthly payment or lump sum into an ABLE account is not an option. An individual may open an ABLE account, however, the conserved funds (SSI and/or SSDI funds) cannot be saved in the account. The account owner, however, could save other income such as earnings, a personal needs allowance, or spending money provided to him/her by the representative payee. Please note, there are options for an ABLE account owner to learn and demonstrate their ability to manage money and their SSA disability benefits and request a determination of capability, indicating that they no longer need a representative payee. See POMS:

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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.