The Social Security Administration has released the following set of questions and answers to help its staff in dealing with inquiries about the new ABLE accounts:
A. Purpose of this EM [Emergency Message]
This EM provides important information regarding the Achieving a Better Life Experience (ABLE) Act (P.L. 113-295) and ABLE accounts. Specific guidance on how to treat ABLE accounts for Supplemental Security Income (SSI) income and resources purposes will follow in future instructions.
On December 19, 2014, the President signed into law the ABLE Act. The ABLE Act was established to encourage and assist individuals and families with saving funds for the purpose of helping individuals with disabilities to maintain health, independence, and quality of life. Qualified ABLE programs will provide secure funding for disability-related expenses for qualified individuals with disabilities that will supplement, but not replace, benefits provided through private insurance, Medicaid, SSI, the individual’s employment, and other sources.
C. Information regarding ABLE accounts
1. What is an ABLE account?
An ABLE account is a tax-advantaged account, similar to a Section 529 qualified tuition program (QTP). ABLE accounts are administered by the State in which the individual resides and they must be established for the benefit of the individual. The designated beneficiary is also the owner of the account.
2. Who is eligible for an ABLE account?
To be eligible for an ABLE account, a person must be blind or disabled according to the Social Security definition of disability by a condition or conditions that began before age 26. Eligible individuals are limited to one ABLE account.
3. What is the maximum contribution for ABLE accounts?
Generally, ABLE accounts may not receive aggregate contributions during a taxable year in excess of the annual gift tax exemption (which is $14,000 for 2015). Each State will set a maximum balance for ABLE accounts.
4. Will ABLE account balances count towards the SSI statutory resource limit?
For SSI purposes, we will exclude as a resource the first $100,000 in an ABLE account.
5. What happens if an SSI recipient has excess resources held in an ABLE account?
If an individual is ineligible due to excess resources held in an ABLE account, we will suspend the SSI benefits without a time limit, but not terminate the benefits. The SSI recipient would remain eligible for Medicaid while in suspense.
6. Are ABLE accounts transferrable?
ABLE accounts are transferrable to family members who are also qualified individuals.
7. What distributions are allowed from ABLE accounts and what is their impact on SSI benefits?
Some qualifying distributions are education, housing, transportation, employment support, assistive technology, health and wellness. Qualifying distributions from the ABLE account would not generally affect SSI eligibility or payment amount. Distributions from an ABLE account for the purpose of housing expenses will be countable income for SSI purposes.
8. What happens upon the death of an ABLE account beneficiary?
Subject to certain outstanding debts, the State can file a claim against the ABLE account for reimbursement of any medical assistance paid on behalf of the account beneficiary after establishment of the ABLE account.
9. When will there be POMS instructions on ABLE accounts?
The Department of the Treasury will publish regulations early this summer and many States will have to pass legislation to establish the ABLE account program. After we receive more guidance from Treasury, we will issue specific instructions on how to treat ABLE accounts for income and resources purposes.
10. What should we tell the public if they ask how to establish an ABLE account?
ABLE accounts must be established under a program established and maintained by the individual’s State of residence. Refer individuals to their State Comptroller or Tax Office for questions concerning ABLE accounts.
Direct all program–related and technical questions to your RO [Regional Office] support staff or PSC [Program Service Center] OA [? This acronym isn't even on Social Security's own list of its own acronyms!] staff. RO support staff or PSC OA staff may refer questions or problems to their Central Office.