Can SSI Be Deposited Into an ABLE Account?

Supplemental Security Income (SSI) provides financial assistance to adults and children with disabilities who have limited income and resources. Many individuals receiving these benefits seek ways to save money without jeopardizing their eligibility for such support. Achieving a Better Life Experience (ABLE) accounts offer a specialized savings vehicle designed to address this need. This financial tool allows individuals with disabilities to save funds for various disability-related expenses while maintaining government benefits.

Understanding ABLE Accounts and Eligibility

An ABLE account functions as a tax-advantaged savings and investment account specifically created to support individuals with disabilities. These accounts were established following the passage of the Stephen Beck, Jr., Achieving a Better Life Experience (ABLE) Act in 2014, enacted as Internal Revenue Code Section 529A. The primary purpose of an ABLE account is to allow eligible individuals to save money and pay for qualified disability expenses without losing eligibility for certain means-tested federal programs, such as SSI and Medicaid.

To be eligible for an ABLE account, an individual must have a disability that began before age 26. They must also be receiving Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) benefits, or be certified by a licensed physician as having a significant physical or mental impairment that causes marked and severe functional limitations. An eligible individual is limited to owning only one ABLE account at any given time.

SSI Asset and Income Rules with ABLE Accounts

Supplemental Security Income (SSI) benefits are subject to strict financial criteria, including limits on countable assets and income. For 2025, the SSI asset limit is $2,000 for an individual and $3,000 for a couple. Funds held within an ABLE account are generally disregarded when determining an individual’s eligibility for SSI, providing a significant advantage for financial planning.

A key provision states that the first $100,000 saved in an ABLE account is not counted towards the SSI asset limit. If the balance in the ABLE account exceeds $100,000, any amount above this threshold is considered a countable resource for SSI purposes. Exceeding this $100,000 limit can lead to the suspension of SSI benefits until the account balance falls below the countable resource limit. It is important to understand that while SSI benefits may be suspended, Medicaid eligibility typically continues even if the ABLE account balance surpasses $100,000.

Contributions made into an ABLE account by an SSI recipient from their own income are not considered income for SSI purposes once deposited. This means that depositing SSI payments directly into an ABLE account transforms them from countable income into a disregarded asset. However, if an SSI recipient makes contributions from their wages or unearned income, that initial income is still counted before being deposited into the ABLE account.

Managing Contributions and Withdrawals

ABLE accounts have specific rules for annual contributions and withdrawals. For 2025, the total annual contribution limit from all sources into an ABLE account is $19,000. This limit is tied to the federal annual gift tax exclusion and can be adjusted for inflation over time. Anyone, including the account holder, family members, or friends, can contribute to an ABLE account.

Working account owners who do not participate in an employer-sponsored retirement plan may contribute additional funds above the standard annual limit under the “ABLE to Work” provision. For 2025, this additional contribution can be up to $15,060 for continental U.S. residents, or the account owner’s gross employment income, whichever amount is less.

Funds withdrawn from an ABLE account must be used for “qualified disability expenses” to maintain their tax-free status and avoid impacting benefit eligibility. These expenses are broadly defined and include costs related to:
Education
Housing
Transportation
Employment training
Assistive technology
Health
Prevention
Wellness
Financial management and basic living expenses

Non-qualified withdrawals, which are funds used for purposes other than qualified disability expenses, are considered income to the SSI beneficiary and may be subject to income tax and a 10% penalty. Account holders should maintain records for all withdrawals to demonstrate their use for qualified disability expenses.

Steps to Open an ABLE Account

Opening an ABLE account involves several steps, although the programs are state-specific. While each state administers its own ABLE program, many programs allow residents of other states to open an account, providing flexibility in choosing a plan that best suits individual needs. Researching available state programs is a practical first step, considering factors such as fees, investment options, and ease of use.

The application process is often completed online through the chosen state program’s website. Applicants will need to gather personal information for the account owner, including their name, address, date of birth, and Social Security number. Proof of eligibility, such as documentation of SSI or SSDI receipt, or a signed disability certification from a licensed physician, is required.

Applicants will link a bank account to facilitate initial deposits and future contributions. Some programs may have minimum initial contribution requirements. Setting up recurring contributions can streamline the process of consistently funding the ABLE account.