Top Three Questions: January 2019

January 14, 2019

What are the ABLE savings limits for 2019?

ABLE accounts are protected savings opportunities for people who have a significant disability with an onset prior to age 26. For 2019, friends and family can contribute up to $15,000 directly into an ABLE account. ABLE account owners who work, and do not have an employer-sponsored retirement account, may save up to $12,140 in additional savings from their earnings.

Can I save income within ABLE to reduce my countable income and qualify for more public benefits?

You can save income – both earned and unearned income – or have it directly deposited into an ABLE account. However, it still counts as income and will not qualify you for additional public benefits.

If you are a working beneficiary who receives Social Security Disability Insurance (SSDI) benefits or Supplemental Security Income (SSI) payments, there are work supports that can reduce the earnings the Social Security Administration (SSA) counts which may allow you to save more money. To learn more, visit the Ticket to Work website or review the Social Security Red Book.

Unearned income such as a pension, 401K, worker’s compensation payments, unemployment compensation, veteran’s benefits, rental income and child support payments can be deposited into an ABLE account. These income sources also follow the usual income counting rules for the public benefits program and cannot qualify you for additional benefits. Some advisors, however, may suggest a variety of legal, alternative strategies to increase the available funds which can be deposited into an ABLE account. These may include:

  • A divorce decree which stipulates mandatory ABLE account contributions for a minor child with a disability, but no child support payments.
  • The parents of an adult SSI recipient depositing the ‘rent’ received from their adult child into an ABLE account. The adult child receives the full SSI payment because he or she pays their fair share of household expenses to the parents.
  • A special needs trust (SNT) depositing funds into an ABLE account so that the ABLE account can pay for housing expenses. If the SNT pays the housing expenses, the SSI payment would be reduced, but when the ABLE account pays for these expenses the SSI payment is not reduced.

ABLE accounts are a tool to disregard assets or resources, not income. Assets and resources are disregarded for most federally funded means-tested benefits (with one exception related to SSI beneficiaries and only when the account exceeds $100,000). Contributions from family and friends do not count as income when deposited directly into an ABLE account. All income received by the beneficiary still follows usual income counting rules.

Will my ABLE savings affect my HUD housing subsidy?

Savings in an ABLE account are disregarded when determining eligibility for most federally-funded means-tested benefits.

All federal housing support programs are income-based programs and do not have asset limits. While we anticipate that ABLE funds would be excluded from HUD determinations, we are still awaiting guidance from the Department of Housing and Urban Development (HUD) as it relates to housing and ABLE.

If housing expenses are paid from ABLE, it is a best practice to pay the expense the same month the funds are taken out of the ABLE account. This can be done with a debit card or check option and complies with SSI policy.

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