ABLE ACCOUNT

​

​

​

​

​

​

​

​

​

​

​​

 

 

What is the PA ABLE Savings Program?

​

A PA ABLE account gives individuals with qualified disabilities (Eligible Individuals), and their families and friends, a tax-free way to save for disability-related expenses, while maintaining government benefits. Federal and state law authorized the creation of PA ABLE accounts. 

It allows people  with disabilities and their families to have greater control of their finances and to plan for a more  financially secure future. 

 

An adult receiving Medicaid and Social Security Income (SSI) can't have more than $2K in countable assets because it would make them ineligible. However, PA ABLE savings are not counted against you for any federal needs-based benefits including medical assistance, housing assistance programs, student financial aid, etc. 

 

For SSI (Supplemental Security Income), you can have up to $100,000 in an ABLE account without affecting your benefits. Anything above that, your SSI will be suspended but not terminated. However, medical assistance benefits would continue. 

 

PA ABLE accounts are PA state tax deductible, within limits. You won’t pay any federal or Pennsylvania  income taxes on any growth on your savings while they are in your ABLE account or when you withdraw funds to pay for qualified disability expenses.​ The total annual contributions by all participating individuals, including family and friends, for a single tax year is $15,000.

​

Click here to read about Advantages vs Disadvantages of an ABLE account.

​

This links to the federal law regarding the ABLE account. There are some differences from state to state.

​

What can the money in the ABLE account be use for?

ABLE accounts can pay for expenses that people have because of their disability. 

Expenses may include:

​

• Education

• Food

• Housing expenses like rent, utilities, repair

• Transportation

• Employment training and support

• Assistive Technology, personal support services, smart home devices

• Health, prevention, and wellness (gym membership, supplements)

• Financial management and administrative expenses

• Legal fees (setting up guardianship, POA, will, etc.

• Funeral and burial expenses

 

What about other accounts in my child's name?
 

UGMA/UTMA: Uniform gifts that are in your child's name will be transferred to them at 18 years old which is the same time they become an adult. If this account is over $2K or the combination of the sum with another account in their name is over $2K, then an ABLE account is a good place to transfer this money to so benefits aren't affected.

​

Shielding Income: If your child receives child support, alimony or even earned wages, an ABLE account is a good place to send these funds to without it affecting their benefits.

​

Small settlement, award or inheritance: As long as it doesn't exceed the yearly deposit, an ABLE account is a good place to transfer this money.

​

Used as a savings account: In some situations, an ABLE account can give an adult with a disability the power to manage and control money to pay for expenses. A designated person can oversee how much money is deposited that is manageable for the person but not have it affect a large sum of money.

​

529 Money: Before the law, the money would have to be withdrawn then income taxes would be paid and a 10% penalty. The new tax law enacted in 2017 allowed families to use 529 money, up to $10,000 per year, to be used for elementary or high school tuition for either public, private, or a religious school. It can also be used towards educational related expenses like books, materials, tutoring and educational therapies for children who are home schooled. Up to $15,000 per year of a 529 account can be rolled into an ABLE account tax free.  Click here to learn more. 

​

For inheritance or large sum settlement: A Third Party Special Needs Trust (TPSNT) is usually a better solution for larger sums of money.  In many instances, a Third Party Pooled Trust might be a better alternative than an ABLE account. Inheritance should be written in the name of the trust not the person's name who is receiving it. The ABLE account would be managed by either the disabled beneficiary or a parent or other family member.

​

PA ABLE

607 South Drive, Room 529, Harrisburg, PA 17120

Call: 855-529-ABLE (2253)

Email: info@paable.gov

Website

​

​​If you have more questions pertaining to your unique situation, sitting down with a financial professional who is experienced with the disability is a great place to start. 

 

Here are some local providers.

​

1847 Financial

Brett Garrison

Call: 610-784-3466

Email: bgarrison@1847financial.com

Website

​

The Advocacy Alliance's Representative Payee Program is a system of financial and budgetary management for persons who have a mental illness, persons who have mental retardation, and older adults who are unable to manage their monthly Social Security benefits, other benefits and financial affairs.

Where: 744 North 19th Street, Allentown, PA 18104

Call: (877) 315-6855 or email info@theadvocacyalliance.org

Website

​

Ikor

Our services are client-centered and adaptive to the client’s needs, allowing the trustee, financial advisor, or institution to concentrate on the big picture of the client’s finances.

Call: 855-367-4567

Website

​

Mass Mutual Financial Group Eastern Pennsylvania

Services: The Special Care Program's holistic approach begins with traditional financial strategies

including financial position, protection, investments, tax reduction strategies, retirement planning and estate planning. Their planners specialize in Life Care Planning, Government Program Integration, and Family Dynamics & Financial Resource Management.

Where: 3701 Corporate Parkway, Suite 350, Center Valley, PA 18034

Call: 610-798-2567

Website

​​​

Sally Schoffstall

Special Education Attorney

Services: Elder and special needs planning law, guardianship, estate planning, and estate administration

Where: 2987 Corporate Ct #200, Orefield, PA 18069

Call: 610 706 0686

Website

​