Protecting Assets for Disabled Individuals

Supplemental Security Income (SSI) benefits have strict income and asset guidelines. Generally, an individual can only have two thousand dollars and a couple can only have three thousand dollars in assets to qualify for SSI benefits.  Assets are defined as cash or items that can be converted to cash. A primary residence, a single vehicle and ordinary household furnishings or work tools are not considered to be assets for purposes of SSI benefits. When an individual has significant assets but is in need of SSI benefits (and Medicaid) there are multiple methods to allow the individual to retain the assets while still retaining the eligibility for benefits.  A short, but not complete list of some of these methods or tools includes ABLE Accounts, Individual Development Accounts, PASS plans and Supplemental Needs Trusts.  

 ABLE Accounts (ABLE stands for Achieving a Better Life Experience) are accounts that can be set up by or for individuals with disabilities that occurred before the age of 26.  Funds in the account do not affect eligibility for SSI benefits, Medicaid or any other Federal Benefit. The account is generally established with a financial organization which has been approved by the Social Security Administration.  Anyone can contribute to an individual’s ABLE account, up to $15,000 per year (this changes yearly) and distributions are not taxed as long as the funds are used for qualified expenses including, education, housing, transportation, personal support services, health care expenses, financial management costs and other qualified expenses.  

Another type of account is an Individual Development Account which is a matched savings account that the account owner can use to start a business, buy a home or get an education or training to get a better paying job.  Each time that an account owner adds to the savings account, they may earn a match. This allows a person receiving benefits to save money without promising their entitlement to benefits.

 PASS (Plan to Achieve Self Support) is a benefit for people receiving SSI or SSDI who want to save for a goal such as education or starting a business.  An individual creates a plan for reaching towards self support and submits the plan to the Social Security Administration. If the plan is approved, money that an individual saves towards that goal does not count towards the asset limitation.  Read more about PASS plans .

 Supplemental Needs Trusts are trusts set up to provide for the needs of disabled individuals.  You can read more about them on our website.

When trying to maintain entitlement to Supplemental Security Income benefits for individuals who may have significant assets, the choices are multiple and can be complicated.  This is just an overview of some programs available. Because of the highly personalized nature of individuals and their finances, it is always best to consult a disability advocate in your community when providing financial planning for disabled individuals. 

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