Author: Anita Kelley, Director, College Savings Plans, Alabama State Treasury
For so long, individuals with disabilities had to limit their savings to $2,000 per month in order to retain their benefits. The good news is now with Enable Savings Plan Alabama you can save so much more without impact.
With the passing of the ABLE Act, the first $100,000 of assets in an Enable Savings Plan Alabama account are exempt from the $2,000 SSI resource limit. Additionally, account earnings and withdrawals are not considered income.
However, there are some nuances with regard to an individual’s total assets and how those might affect overall benefits.
Here are some real-world examples from the Social Security Administration Program Operations Manual System (POMS) to help clarify:
- Eric takes a distribution of $500 from his ABLE account in June 2016 to pay for a health-related Qualified Disability Expenses. His health-related expense is not due until September, so Eric deposits the distribution into his checking account in June. The distribution is not income in June. Eric maintains his ABLE account at all relevant times, and the distribution is both unspent and identifiable until Eric pays his health-related expense in September. We therefore exclude the $500 from Eric's countable resources in July, August, and September.
- Paul is the designated beneficiary of an ABLE account with a balance as of $101,000 on the first of the month. Paul's only other countable resource is a checking account with a balance of $1,500. Paul’s countable resources are $2,500 and therefore exceed the SSI resource limit. However, since Paul's ABLE account balance is causing him to exceed the resource limit (i.e., his countable resources other than the ABLE account are less than $2,000), we suspend Paul’s SSI eligibility and stop his cash benefits, but he retains eligibility for Medicaid.
- Christine is the designated beneficiary of an ABLE account with a balance of $101,000 on the first of the month. Christine's only other countable resource is a checking account with a balance of $3,000. Christine's countable resources are $4,000 and therefore exceed the SSI resource limit. However, because her ABLE account balance is not the cause of her excess resources (i.e., her countable resources other than the ABLE account are more than $2,000), the special rule does not apply, and Christine is not eligible for SSI because of excess resources. We suspend Christine’s SSI benefits using payment status N04, and her Medicaid benefits stop.
We are dedicated to helping families figure out all of these nuances and how they apply to their current situation. We’re all in this together. We’ll continue to work to ensure you can save for what you need, while maximizing your current benefits.