Saving Money While Receiving Disability Benefits
In December 2014, President Barack Obama signed into law the Achieving a Better Life Experience Act. Better known as the ABLE Act, it allows people who have a disability that occurred before the age of 26 to open one tax-free savings account to pay for qualified disability expenses. This money can be used for education, housing, transportation, employment training and support, health and wellness, as well as other miscellaneous expenses. Under current gift-tax limitations, families may deposit as much as $14,000 annually, and beneficiaries can save up to $100,000 before impacting their SSI benefits; Medicaid eligibility will continue no matter how much money is saved. You won’t be able to apply for one until later this year, but in the meantime, review this list of 10 Things You Must Know about ABLE accounts from the National Disability Institute.
Keep in mind, an ABLE account is not a one size fits all solution for everyone. An ABLE account is not without its drawbacks. One of the biggest drawbacks of an ABLE account is that any money remaining in the account upon the passing of the ABLE account holder must be used first to pay back the State for care provided to the account holder. All that said, an ABLE account is another “tool” in the planning “toolbox” and will help some families and individuals who may otherwise be disqualified from government benefits.