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- There is no savings account limit if you are applying for Social Security disability insurance.
- To receive Supplemental Security Income, you can only have up to $2,000 in your name.
- You can keep up to $100,000 in an ABLE account and it will not affect SSI eligibility.
If you are applying for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), you will need to meet specific requirements to be eligible for benefits.
One of these requirements may be the amount of money you keep in a savings account. Here’s what you need to know about your savings options if you want to receive disability benefits.
Eligibility Requirements for Social Security Disability Benefits
The Social Security Administration has two programs that provide benefits to people with disabilities:
- SSDI provides benefits to people with disabilities who have worked long enough to qualify for disability benefits. Eligibility for benefits will depend on when you developed a disability and how long you worked.
- The SSI provides benefits to people over 65 who are blind or disabled. You will also need to meet citizenship status requirements and display limited income and limited resources.
Can you have a savings account if you’re collecting Social Security disability benefits?
Yes, you can have a savings account if you are receiving disability benefits. However, your account balance may affect your eligibility depending on the benefits you apply for.
SSDI has no savings account limit. This means that the money you have saved in a bank account will not affect your eligibility for benefits. To qualify for SSI, individuals must have $2,000 or less in limited resources ($3,000 or less for couples).
According to the Social Security Administration, any of the following resources can count toward your $2,000 limit:
- Bank accounts
- stocks, mutual funds, savings bonds
- cars (if you or a household member have a vehicle, it is not included in the limit)
- personal property or land (the house you live in and the land it is on do not count, and the property is not used for a business)
- life insurance (if your life insurance policy has a face value of $1,500 or less, it does not count towards the limit)
- items that can be turned into money and used for housing or food
The Social Security Administration has a few exceptions that are not counted as resources. For example, personal effects are not counted as resources.
If you have set aside money through the Plan for Achieving Self-Sufficiency (PASS) or in an Achieving a Better Life Experience (ABLE) account, these funds will not affect your eligibility for SSI . Burial funds up to $1,500 for individuals will also not be considered.
Savings account options if you’re collecting Social Security disability benefits
You can open a regular savings account at a physical bank or online. Be aware of the savings limit if you are applying for SSI, however.
Individuals who receive SSI and want to return to work might consider becoming part of the PASS program. The PASS allows people with disabilities to set aside money for materials that can be used for work.
For example, if someone wants to take training to achieve a professional goal, they can research the costs and PASS can help them save money to achieve their goal.
To set up PASS, you can go to a local Social Security office and create a plan with a Vocational Rehabilitation (VR) counselor. Your plan will be reviewed by a PASS expert for approval. If not approved, you can appeal the decision.
Alexandria Dunn, CFP® Professional, CTFA, Wealth Advisor and Affinia Financial Group Partner, says that if a parent helps a child with a disability, they can create a special type of trust that would allow their children to save for the future.
Special needs trusts and pooled trusts are considered exceptions and are not considered when determining eligibility for SSI. Trusts will also not count if you meet the undue hardship requirements.
If you have a trust that is not considered a resource, keep in mind that your SSI benefits may still be reduced.
If money from the trust is used to pay someone to provide food or shelter, up to $300.33 may be deducted from your SSI benefits each month. If the money is used for other expenses, such as medical care or phone bills, your SSI benefits will not be reduced.
An ABLE account is a savings option for people with disabilities before the age of 26. An ABLE account will not affect your eligibility for government assistance such as Social Security income or Medicaid.
You can keep up to $100,000 in an ABLE account, and it won’t affect your eligibility for SSI. However, you will only be able to deposit a certain amount per year.
In 2022, you can deposit up to $16,000 into an ABLE account per year. If you work, you can save extra money in an ABLE account. For 2022, you can save an additional $12,880 per year if you live in the continental United States, $16,090 if you live in Alaska, and $14,820 if you live in Hawaii.
Prior to the switch to the ABLE account, Dunn says there were no savings options for people with special needs.
“They were forced into poverty. If you were on SSI, you would be disqualified if you had more than $2,000 to your name. If you think about it, we can all have some type of emergency expense that would arise that our monthly expenses wouldn’t cover,” Dunn explains.
With an ABLE account, Dunn says people with disabilities can save for the future instead of focusing on qualifying for benefits.
To obtain an ABLE account, you will need to apply through an ABLE state program. There are programs in every state except Idaho, North Dakota, South Dakota, and Wisconsin. You also do not need to be a resident to apply for some of the ABLE state programs.
Similar to 529 plans, there are also several different investment options with an ABLE account.
“We suggest – as with any investment – investing for the time horizon the funds plan to be used. If the person plans to use these funds five years or more later, they may choose to invest in a combination of stocks and bonds. If they plan to use it as an emergency reserve savings account, they may want to keep it in cash,” advises Dunn.
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