My prior post talked about how the Student Earned Income Exclusion (SEIE) allows students to work and not have their benefits reduced, giving them an opportunity to both earn money and explore possible vocational interests. Another thing that causes people and families concern is the perceived risk of the individual being considered “over asset limits”, making too much money and thus endangering their benefits. There is, however, a mechanism in place that can to keep this second issue from getting in the way of a student’s decision to work.
Normally, students have two objectives when they decide they are going to work. The first is to generate some additional spending money to be able to “do things” that they might otherwise not be able to afford. The second aspect that normally drives students to work is the desire to save money for some “long term” objective (college, a car, or some other “big ticket” item or project).
Unfortunately, students who receive Supplemental Security Income (SSI) are subject to a limit of “countable resources” of $2,000. Any month an individual has “countable resources” over $2,000, they are not entitled to any SSI payment. Because bank accounts have been generally considered “countable resources,” and most people keep their savings in bank accounts, this creates a barrier for students on SSI who choose to work for the purpose of saving money.
Due to a change first implemented by Congress approximately a decade ago, many states now offer ABLE accounts. ABLE stands for Achieving a Better Life Experience, after the name of the act of Congress which allows these accounts. Money deposited in an ABLE account is not considered a “countable resource” for SSI or Medicaid. Once an ABLE account is established for a person with a disability whose disability arose before age 26, anyone, including the person, can contribute to the person’s ABLE account. Up to $17,000 annually can be contributed to an ABLE account without affecting the person’s benefits. (Incidentally, a person with a disability whose disability arose before age 26 is also the entire population who would be covered by the Student Earned Income Exclusion, described in my previous blog.)
These days, it is easy to establish an ABLE account, as almost every state in the nation has an ABLE program. Nebraska has an ABLE program, www.enablesavings.com, and that program is a very good one; but because many states (including Nebraska) allow non-residents to enroll in their ABLE program there is a resource (ABLE National Resource Center, www.ablenrc.org) that allows people to “comparison shop” among the various ABLE programs. Please note that a qualified individual can only have one ABLE account at any given time.
In Nebraska, it is possible to set up an ABLE account with as little as $50.00, and the Nebraska program can allow direct deposit from the individual’s employer. This means that money earned from a job can be saved without that savings being considered a “countable resource.” Moreover, because others can contribute to the disabled individual’s ABLE account directly, people can make gifts directly to the ABLE account and such gifts do not constitute “unearned income” for SSI purposes and do not result in a reduction of SSI benefits. Essentially, the ABLE account can eliminate the “savings trap’ that has long been a disincentive to disabled student employment.
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Michael Elsken has been practicing law for over 40 years, with Disability Rights Nebraska for over two decades. Social Security and employment of Social Security beneficiaries has been an area of focus for him with the agency. Understanding Social Security is hard, because it is so complicated, but Michael’s activities in this area are designed to help people with disabilities through the Social Security maze.
Photo by Campaign Creators on Unsplash
