Supplemental Security Income (SSI) provides up to $943 per month to cover basic living expenses in 2024 – intended to cover “food and shelter.” As we all know, though, one would be hard-pressed to maintain shelter alone for $943 per month.
At the same time, staying eligible for SSI requires having less than $2,000 in available resources. And if a recipient is given food or shelter – or funds to help pay for them – the SSI benefit can be reduced by up to one-third. Medi-Cal often has this same $2,000 limit, and its health care, job support, and other services can be just as essential as food and shelter.
So how can individuals with a disability – and their families – supplement these benefits or save for future needs? A Special Needs Trust can help the individual maintain eligibility when they receive a gift, inheritance, or lawsuit proceeds. However, direct distributions from a Special Needs Trust to an SSI recipient for basic living expenses will also decrease benefits.
An ABLE account helps resolve this dilemma by permitting an individual to save more than the $2,000 resource limit, up to $100,000, while still being eligible for both SSI and Medi-Cal. Other disabled individuals, family members, and even Special Needs Trusts can contribute to an ABLE account, and because the funds don’t go directly to the individual, their SSI and Medi-Cal benefits aren’t affected.
Still, ABLE accounts have important limits. Here are 10 facts to help you determine if an ABLE account could help you or someone in your family – and learn more about how to use the account to the greatest benefit.
1 | Individuals With The Onset of a Disabling Condition Before Age 26 Can Open an ABLE Account
Currently, only individuals whose disabling condition started before age 26 can open an ABLE account. Fortunately, starting January 1, 2026, the age limit for the onset of a disabling condition will be extended to age 46. This expansion is expected to assist over 6 million individuals, including over one million veterans. Note also that an individual does not have to open an ABLE account before age 26 (or later, age 46). If the onset of the disabling condition occurred before that age, the individual qualifies for an ABLE account.
2 | You Can Open an ABLE Account in Any State that Offers Them
Over 45 states now offer ABLE accounts, but a disabled individual may want to select a program outside their home state. For example, some state programs offer ABLE-Link cards which function much like a credit or debit card. This feature can increase autonomy while setting safe spending limits for those who need that assistance.
3 | There Can Be Only One
No matter which state they choose, individuals can have only one ABLE account.
4 | ABLE Accounts are Section 529A Savings Accounts, Like Education Savings Accounts
Funds deposited in the ABLE disability savings account will be invested and managed within a risk profile the account holder selects, and these selections can be changed over time like any other investment account.
5 | ABLE Account Balances are Excluded from FAFSA Calculations
An individual’s ABLE account will not reduce his or her eligibility for student financial aid.
6 | ABLE Accounts Have an Annual Contribution Limit of $18,000 Total in 2024
This limit is tied to the annual gift tax exclusion amount, which is indexed to inflation. ABLE account holders who are employed may also contribute an additional amount beyond that limit up to the amount of their earnings for the year.
7 | ABLE Funds Are Used for Qualifying Disability Expenses
The ABLE National Resource Center lists these broad examples: education, housing, transportation, job training and support, assistive technology and related services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and basic living expenses like food.
8 | SSI Eligibility Ends for ABLE Balances over $100,000
After the balance in an ABLE account reaches or exceeds $100,000, SSI payments will cease. While Medi-Cal benefits may continue, for most individuals, a Supplemental Needs Trust (or Special Needs Trust) will be best to hold funds or other assets exceeding $100,000.
9 | ABLE Account Balances Have an Upper Limit
Most states set ABLE account balance limits between $300,000 and $550,000.
10 | An ABLE Account is NOT an Substitute for a Supplemental or Special Needs Trust (SNT)
The annual contribution limit and balance limits make the ABLE account a tool to be used in conjunction with an SNT – not a replacement for it. An SNT can hold funds and other assets exceeding $100,000 or even $550,000 in value, and these funds can be used over the lifetime of an individual to supplement SSI and Medi-Cal rather than supplant them.
Supporting Your Next Steps in Special Needs Planning
To learn more about whether an ABLE account is right for your loved one with special needs, give us a call. We take pride in making sure our clients and their families have all of the estate and Special Needs Planning tools in place to ensure a lifetime of support.
And no matter what the future holds, we’ll be with you as your trusted counselor to guide you on every step of the journey.
Schedule a complimentary call today. Contact us today to get started.
This article is a service of Debbie Babb Law. We don’t just draft documents. We ensure you make informed and empowered decisions about life and death, for yourself and the people you love.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.