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As explained in previous blog posts here, here and here, an Achieving a Better Life Experience (ABLE) account is a tax-advantaged account that can be used to save funds for the disability-related expenses of the account’s designated beneficiary, who must be blind or disabled by a condition that began prior to the individual’s 26th birthday. By using an ABLE  account, family members, friends, or persons with special needs may to place up to $100,000 into an ABLE account that functions much like an IRA or 529 College Savings Account. Importantly, the funds in an ABLE account are not countable in determining eligibility for public benefits based upon financial need.

Many persons with disabilities receive Supplemental Security Income (SSI) benefits from the Social Security Administration (SSA). Along with SSI benefits, disabled persons also often receive Medicaid to pay the costs of medical care. These are critical public benefits based upon financial need that many persons with disabilities rely upon for support.

SSA has recently published regulations governing the treatment of ABLE accounts owned by SSI recipients. The regulations are publicly-available via the SSA.gov website and may be accessed using this link: <https://secure.ssa.gov/apps10/poms.nsf/lnx/0501130740>

Significant regulations include the following:

Contributions: Any person can contribute to an ABLE account. However, the Internal Revenue Service (IRS) limits the total annual contributions any ABLE account can receive from all sources to the amount of the per-donee gift-tax exclusion in effect for a given calendar year. For 2016, that limit is $14,000. SSA excludes contributions to an ABLE account from the income of the SSI  beneficiary.

Income earned by ABLE account investments: SSA excludes any earnings an ABLE account receives from the income of the SSI beneficiary.

Distributions: Distributions may be made only to or for the benefit of the designated beneficiary. Further, an ABLE account may distribute to pay for Qualified disability expenses (QDEs). QEDs are expenses related to the blindness or disability of the designated beneficiary and that are for the benefit of the designated beneficiary. QDEs include the following types of expenses:

• Education;
• Housing;
• Transportation;
• Employment training and support;
• Assistive technology and related services;
• Health;
• Prevention and wellness;
• Financial management and administrative services;
• Legal fees;
• Expenses for ABLE account oversight and monitoring;
• Funeral and burial; and,
• Basic living expenses

Balances in ABLE accounts: SSA excludes up to and including $100,000 of the balance of funds in an ABLE account from the resources of the SSI beneficiary. SSA counts the amount by which an ABLE account balance exceeds $100,000 as a countable resource of the SSI beneficiary.

The Federal Register Notice regarding the information that the agency will seek from state ABLE programs was also recently published, on December 14th, at 80 FR 77404 <https://www.gpo.gov/fdsys/pkg/FR-2015-12-14/pdf/2015-31351.pdf> .