What is an ABLE Account?
Family members and friends of disabled individuals often feel like their hands are tied when it comes to supporting their loved ones. If they give them cash for bills or pay for their food, that spending counts as income and must be reported to the Social Security Administration. If they don’t provide that financial support, they have to watch their loved ones struggle.
An ABLE account may be the ideal solution to address this dilemma. ABLE accounts allow people to contribute money to an account to fund a disabled individual’s expenses.
To learn more about your options as a person with a disability, get in touch with Walton Disability. Call us at 251-455-5819 to get started.
The Purpose of the ABLE Account
The goal of the ABLE program is to allow family members and friends of disabled people to contribute money to cover expenses. Contributions are not tax deductible for federal taxes.
The ABLE program was created to fill a gap in the safety net provided to people with disabilities. Family members often want to support their loved ones, but doing so directly causes a wide range of consequences to those loved ones. They are at risk of losing SSI, housing benefits, Medicaid, food stamps, and other benefits. ABLE Accounts do not impact eligibility.
Who Can Open ABLE Accounts?
People anywhere in the United States can open an ABLE Account. While only certain states maintain ABLE programs, you can get an account out-of-state in a state that does have this program. To qualify, an individual must have developed their disability before reaching the age of 26. They must also prove that they are disabled, either via a letter of disability certification from their doctor or via receiving benefits from SSI or SSDI.
How ABLE Affects Your Benefits
The biggest benefit of an ABLE Account is that it does not affect your eligibility for benefits. This allows disabled individuals to enjoy a higher quality of life without losing access to Medicaid, housing assistance, SSI, and other benefits.
There are exceptions to this. If an ABLE Account has more than $100,000, any amount beyond the $100,000 may count against you as income for SSI.
How You Can Use Your ABLE Funds
ABLE funds can be used for any qualified disability expense. This is a fairly broad term that refers to any expense incurred by the beneficiary because of their disability. Funds may be used for education expenses, food, job training, administrative help, personal care services, transportation, and housing.
Who Can Contribute to an ABLE Account
Anyone can make a contribution to an ABLE Account. Generally, contributions are made by the beneficiary of the account, family members, friends, and other loved ones. Legally, an individual can only contribute up to $15,000 per year before hitting the limits of the gift tax. Lifetime limits on contributions vary from state to state, so it is important to know exactly what is and is not allowed before unintentionally triggering tax consequences.
If an ABLE Account would help you or a disabled loved one enjoy a higher quality of life, this is the time to learn more about your financial options and find out what your next steps are. A disability lawyer can take an in-depth look at your finances and the current benefits you receive, then use that information to come up with a plan that suits your needs.
Getting the ABLE Account set up as soon as possible can help the beneficiary enjoy more financial stability, take advantage of employment and educational opportunities, and have a higher quality of life.
Reach Out to Walton Disability to Learn More About Your Options
If you are trying to qualify for disability benefits, working with a disability attorney helps you avoid mistakes, get the proper documentation in order, and save time. At Walton Disability, we work exclusively on Social Security disability cases. We strive to help every client get access to the benefits they deserve, which is why we spend so much time learning about changes in disability law and benefits. To set up a consultation with Walton Disability, call our team at 251-455-5819 or reach out online.