Contributions:  Contributions to an ABLE account will not be counted as income of the designated beneficiary.  If an SSI recipient makes contributions to an ABLE account from his or her wages (or unearned income), the income used for the contribution is still counted as income from wages (or unearned income).

Earnings: Earnings from ABLE account investments will not be counted as income.

Account Balances:  Balances up to and including $100,000 will not be counted as resources of the designated beneficiary.  Amounts over $100,000 will be counted as a countable resource.  If the designated beneficiary has excess resources that are attributable to the ABLE account balance, then the beneficiary’s SSI benefits will be suspended without time limit as long as the recipient remains otherwise eligible.  See POMS SI 01130.740, “Achieving a Better Life Experience (ABLE ) Accounts for examples of when ABLE account balances over $100,000 in combination with other resources allow the recipient to qualify for this suspension status and when they will cause the recipient to lose eligibility status due to excess resources.  When a recipient’s SSI benefits are suspended under this circumstance, the recipient will remain eligible for Medicaid. ³, ⁴  SSA plans to issue additional procedures related to this suspension status in the future.

Distributions:  Distributions are not considered income; they are considered a conversion of a resource from one form to another.  Thus, they are not considered income regardless of the purpose for which they are used.  Some distributions will be counted as a resource, however, depending on the purpose and the circumstance.

Distributions are intended to be used for QDEs. QDEs are expenses related to the designated beneficiary’s disability and are for the benefit of the beneficiary.  In general, QDEs include:

– Expenses for education
– Housing (see specific rules for SSI, below)
– 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
– Basic living expenses

Proposed regulations from the Treasure Department state that QDEs “should be broadly construed to permit the inclusion of basic living expenses and should not be limited to expenses for items for which there is a medical necessity. . .” ⁵

For SSI, distributions made for different purposes are treated differently.  For SSI purposes, distributions generally are divided into three categories: non-housing QDEs, housing QDEs, and non QDEs. QDEs for housing expenses are the same as for in-kind support and maintenance, except that they do not include food; i.e., they differ somewhat from in-kind support for housing and/or food.  Housing QDEs include mortgage payments, property insurance required by the mortgage holder, real property taxes, rent, and utilities (see POMS SI 01130.740 for details).

Distributions made for non-housing QDEs are not counted as a resource if they are retained after the month they are received if the distribution meets several criteria.  Key criteria are that the distribution remains unspent and that it is identifiable.  Normal SSI resource counting rules and exclusions apply to assets and items bought with ABLE account funds.  See POMS SI 01130.740C.5 for additional criteria, details, and examples of retained distributions and purchases for non-housing QDEs.

Distributions used for housing QDEs and non-QDEs will not be counted as a resource if the funds are spent in the month they were received.  Normal resource counting rules and exclusions apply to assets and items purchased with the funds.  If, however, distributions for housing QDEs and non-QDEs are retained into the following month, then they are counted as a resource.

Since the timing of distributions taken for housing QDEs can affect whether the distribution is counted as a resource (i.e., received and spent within the same month or not), it is important that the designated beneficiary or person with signature authority carefully manage the timing of the distributions and corresponding housing QDE payments.

Additional Information: In addition to the first $100,000 in an ABLE account being disregarded for federal means-tested programs, some states may provide a similar safe haven for state and local means-tested programs. ⁶  The ABLE National Resource Center provides more information about the ABLE Act and the status of ABLE account programs in the different states.