Certain federal and state benefits, such as Supplemental Security Income (SSI) and Medicaid have financial guidelines.  They require an individual to have no more than $2,000 in countable resources to qualify for the program. Once an individual starts to receive either benefit, countable resources cannot exceed $2,000 in order to maintain eligibility.

Financial Eligibility Standards

Due to the strict financial eligibility standards, historically, a recipient of either benefit was unable to save and accumulate funds. In response to this issue, in 2014, Congress enacted the Achieving a Better Life Experience (ABLE) Act. The law aims to ease financial strains by allowing a person with a disability to save money in a tax-exempt account.  This is used for qualified expenses without affecting eligibility for benefits.

Washington residents can open and fund an ABLE account through Washington State’s Able Savings Plan or select another state’s plan. To be eligible, the individual must have developed a qualifying disability before the age of 26. If someone is not able to open an account for themselves, an authorized legal representative can open an account for them. An authorized legal representative.  This includes an agent under a power of attorney, a legal guardian, or, if the beneficiary is a minor, a parent.

An eligible individual can save and invest up to $15,000 per year in an ABLE account. To be used towards a wide range of expenses related to living with a disability. Including living expenses, education, housing, transportation, and personal support services. Family and friends can also contribute to the account.  Provided that the total contributions—as between the individual and others—do not exceed the annual limit of $15,000. However, a person who is employed can also contribute. The is amount equal to their gross income (up to $12,140 for the year 2019) each year to an ABLE account. In addition to the annual contribution limit of $15,000. An individual who receives SSI can have up to $100,000 in an ABLE account without impacting his or her eligibility for benefits.

Setup your ABLE Account

To set up an account or to learn more, you can visit: https://www.washingtonstateable.com/. A Washington resident is not necessarily required to open a Washington ABLE account. While some states have residency requirements, others do not. Also, the fees associated with the accounts differ depending on which state you open an account through. To compare various state plans, you can visit: https://www.ablenrc.org/.

Have Questions?

Is an ABLE account the best option for you or your loved one? Should you or a loved one use an ABLE account, a special needs trust, or both? The attorneys at Hickman Menashe can help you understand your options.