December 2020 marked the sixth anniversary of the Achieving a Better Life Experience (ABLE) Act, which created tax benefits for individuals with disabilities. Eligible individuals may hold tax-free savings and investment accounts under the ABLE Act. This means that individuals receiving Supplemental Security Income (SSI) can save their money without worrying about losing their eligibility.
SSI is based on financial need, and there are particular income and asset limits applicants must meet to receive benefits. Specifically, individuals cannot have more than $2,000 in disposable assets to qualify for SSI. Before the ABLE Act was codified, those who receive SSI were hesitant to save money, as it may have counted against their eligibility. However, recipients of SSI can now open a tax-free savings account and save money that will not count toward the SSA’s asset limit thanks to this Act.
It’s important to note that there are limits on the amount of money that can be placed in an ABLE savings account. The annual sum cannot exceed $14,000, and if an individual receiving SSI has more than $100,000 in the account, their eligibility will be suspended.
Not every person receiving SSI can open an ABLE account. As long as an individual became disabled before the age of 26 and is already receiving disability benefits from the SSA, they may open an ABLE account.
If opening an ABLE account is too difficult for an eligible recipient, they may choose a person in their life or hire a representative payee to open an ABLE account on their behalf. There is a priority order regarding who may open an account on the eligible individual’s behalf: a person selected by the eligible individual has the highest priority, while a representative payee has the lowest.
If you are confused about the ABLE Act or are considering opening an ABLE account and have questions, contact our law firm. One of our skilled disability representatives can walk you through the process and answer your questions in a way you can understand. Call our team today to learn more.
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