How Can I Save Money for Disability-Related Expenses Without Losing Public Benefits?
Authored By: Southeast Louisiana Legal Services (Hammond Office)
About ABLE Accounts
What is an ABLE account? +
"ABLE" stands for the Achieving a Better Life Experience Act. It allows ABLE accounts to help families save for disability-related expenses without risking the loss of other public benefits, like Medicaid and Social Security, which normally limit eligibility for people with certain assets.
Who can have an ABLE account? +
Anyone who meets the Social Security disability standard by age 26 can have an ABLE account.
If you are not on SSI or Social Security Disability you must swear under oath that by age 26 you had a physical or mental impairment, resulting in marked and severe functional limitations, and can be expected to result in death or has lasted or can be expected to last at least 12 months in a row, or are blind. You must keep a signed doctor’s statement with a diagnosis of the disability and be ready to show it to the ABLE program or to the IRS if it is asked for.
You can only have one ABLE account. But, other people, like your relatives or your lawyer can put money into your ABLE account.
Why have an ABLE account? +
ABLE accounts let you save money and get other aid. You can still get help from SSI, SNAP, Medicaid or TANF/FITAP.
How can funds saved in ABLE accounts be spent? +
Money saved in ABLE accounts can only be spent on certain types of expenses called Qualified Disability Expenses. If you spend ABLE money on other things, it counts against asset limits for benefits like SNAP, SSI, Medicaid, etc. If you withdraw ABLE money to pay for housing, it will count against the SSI resource limit if the withdrawn funds are not used up in the calendar month they are withdrawn.
Qualified Disability Expenses include:
- Education – This includes tuition for preschool to post-secondary schools. Post-secondary schools are attended after completion of high school. Vocational and technical schools are post-secondary schools.
- Employment Training and Support
- Assistive Technology and Related Services
- Personal Support Services
- Health, Prevention, and Wellness
- Financial Management and Administrative Services
- Legal Fees
- Expenses for Oversight and Monitoring
- Funeral and Burial Expenses
- Other expenses which may be identified by the Internal Revenue Service
If you die with money in the account, the money goes to:
- Pay any bills for things the account is supposed to cover (Qualified Disability Expenses listed above). This includes your funeral expenses.
- If more money is left, it goes to Medicaid to pay back for any Medicaid you got since the account was opened.
- If still more is left, it goes to your heirs.
How much money can be saved in an ABLE account? +
The maximum allowable ABLE account balance is $500,000. An account owner can save up to $15,000 per year or with help from family and friends.
Social Security Benefits
As long as the balance in an account does not meet or exceed $100,000, the funds will not be counted as a resource for purposes of determining eligibility for SSI. In addition, if an account does meet or exceed $100,000, SSI will only be suspended; it will not be permanently canceled. Once the balance in the account goes below this $100,000 threshold, the SSI benefits can be reinstated.
How do I set up an ABLE account? +
The Louisiana Office of Student Financial Assistance maintains the account.
You can set up the account online.
Or you can set up an ABLE account by mail. You must send in a completed form plus a first deposit of at least $10.
Here is the link to apply online or get the application to mail in: www.able.osfa.la.gov/index.aspx
What is the difference between an ABLE account and a Special Needs Trust? +