If you receive Supplemental Security Income (SSI) benefits you are hopefully already aware that Social Security limits the amount of resources you can have in order to remain eligible for SSI benefits – $2,000 for an individual or $3,000 for an eligible couple. Similarly, most Medicaid programs also have a limit on allowable resources. Not all resources are counted but if your “countable resources” are determined to be above the allowable limit during any given month, SSI cash benefits are not payable and Medicaid coverage stops for that and any subsequent month your resources remain above the limit.
Historically Special Needs Trusts, Plan to Achieve Self Sufficiency or PASS plans, and Individual Development Accounts or IDAs were among the only options SSI recipients had for saving more than the applicable resource limit without impacting eligibility for their SSI benefit and Medicaid – stunting recipients’ ability to save and make strides towards a better quality of life. Thanks to the Stephen Beck Jr., Achieving a Better Life Experience Act or ABLE, there is another mechanism through which some SSI and Medicaid recipients can save towards lifetime disability expenses and not lose these means-tested benefits.
The Achieving Better Life Expectancy or ABLE Act makes available tax-free savings accounts in which families can contribute up to $14,000 annually (in 2017) and $15,000 annually (in 2018) and have up to $100,000 of the account balance exempt as a resource for the SSI benefit program and certain Medicaid programs. Anyone can make contributions to an eligible individual’s ABLE account and contributors may be eligible for an income tax deduction of up to $2,500 per contributor for State tax purposes in Maryland. ABLE account funds can be used for any “qualified disability expenses” which include but are not limited to expenses for:
- employment training and support;
- assistive technology;
- personal support services;
- health care expenses;
- financial management and administrative services; and
- other expenses which help improve health, independence, and/or quality of life.
Not everyone is eligible for an ABLE account. Eligible individuals include those with significant disabilities and whose disability onset occurred prior to age 26. You may be over age 26 and qualify but must have documentation that verifies you meet the age of onset criteria.
Upon being signed into law, each state was tasked to develop it’s own ABLE program. The Maryland ABLE program will be implemented by Maryland 529. Maryland ABLE is scheduled to be operational by the end of 2017, however, eligible individuals do not have to wait to open an ABLE account! Interested individuals can open an out-of-state account in one of the several states whose ABLE programs is already up and running. To get more information about ABLE, visit the National ABLE Resource Center at http://ablenrc.org/. Here you can see what other states are running ABLE programs and compare each program to see which may be the best fit for you. You can obtain more information about Maryland’s ABLE program at https://maryland529.com/MDABLE (please refer to ‘2017 ABLE FAQs’ word doc for more details about the ABLE program, eligibility, and qualified disability expenses.
The Maryland Benefits Counseling Network will let you know once the Maryland ABLE program is operational! Be sure to check back on our website blog posts and Facebook page for more ABLE updates, if your able 😉