PA ABLE Benefits

No. The primary benefit of ABLE accounts is that no federal means-tested benefits will be affected – with the exception of some special Supplemental Security Income (SSI) limitations (see below). Any funds in an ABLE account do not count for purposes of determining your eligibility for any federal means-tested benefits. Similarly, funds in your ABLE account will not affect your eligibility for Pennsylvania means-tested benefits if they are health or disability-related benefits or Pennsylvania state student financial aid.

Residents of states other than Pennsylvania should check with their state benefits agency to verify that a PA ABLE saving account will not affect their home state-based benefits.

Your SSI benefits are not affected except in two situations:

1. When the value of an ABLE account exceeds $100,000
2. When you withdraw funds for housing or Non-Qualified Expenses and do not use the money in the same month of withdrawal

In the first situation, your SSI benefits are not impacted unless your ABLE account balance exceeds $100,000, at which point any amount over $100,000 would be counted as a resource. If the excess over $100,000 in your ABLE account puts you above the SSI non-ABLE resource limit (currently $2,000), your SSI benefits will be suspended but not be terminated. The suspension will not affect Medical Assistance (Medicaid) eligibility. The suspension is lifted when your resources fall below the SSI non-ABLE resource limit.

For example, if your ABLE account has $101,000 and you have no other countable resources, your SSI will not be suspended because the excess over $100,000 is only $1,000 and does not exceed the $2,000 limit. However, if your account has $101,000 and you have $2,000 in other resources, your SSI will be suspended because the $1,000 ABLE excess plus the $2,000 in other resources is $3,000 and exceeds the $2,000 limit.

It is important to remember that only the $100,000 in your ABLE account is not counted as a resource. For example, if you have $3,000 in non-ABLE assets and $90,000 in your ABLE account, your SSI benefits may be suspended then terminated and your Medical Assistance (Medicaid) benefits might be impacted because your $3,000 in non-ABLE assets exceeds the $2,000 non-ABLE resource limit. This result could be avoided by moving $1,000 in non-ABLE assets into the ABLE account if doing so would not exceed the annual contribution limit (currently $18,000).

In the second situation, money withdrawn from your ABLE account for housing expenses or Non-Qualified Expenses may also affect your SSI benefits if you do not spend the money within the same month you make the withdrawal. For SSI purposes, housing expenses are:

• mortgage (including property insurance required by the mortgage company)
• real estate property taxes
• rent
• heating fuel
• gas
• water
• sewer
• garbage removal

For example, if you withdraw $800 from your ABLE account on June 3 for rent, you should pay that money to your landlord by June 30. As long as you do not hold housing or Non-Qualified Withdrawals over from one calendar month to the next, the funds will not affect your SSI benefits. For guidance on how the Social Security Administration will treat ABLE accounts, click here. [Note, while funds withdrawn for Non-Qualified Expenses will not affect your SSI if used in the same month they are withdrawn, there may be tax consequences for taking such a withdrawal.]

The yearly contribution limit is $18,000 (however, additional contributions may be permitted for employed Account Owners). This is a per account limit; so no matter how many people contribute, the maximum from all sources cannot exceed $18,000. There is also a maximum account value of $511,758. For details on how these amounts are determined, see the PA ABLE disclosure statement.

Yes. PA ABLE Account Owners who earn income may contribute additional funds beyond the annual $18,000 contribution limit through ABLE to Work. The additional annual contribution amount is equal to the federal poverty level for a one-person household (currently $14,580) or the Account Owner's gross wages, whichever is less. Working Account Owners are not eligible to contribute the additional funds if they are already contributing to:

• a defined contribution plan
• an annuity contract
• an eligible deferred compensation plan

Any increase in contributions could impact tax obligations, so consult a tax advisor before making any such increase. Employed Account Owners who exceed the annual limit must complete and submit an ABLE to Work Self Certification form.

If you receive SSI or SSDI monthly benefits, you may direct these into your PA ABLE account as a direct deposit. Please note that if you have a representative payee, they must be listed as the Authorized Individual on your PA ABLE account in order to be able to direct deposit your SSI or SSDI benefit payments. For more information visit SSA.gov.

Yes. A Pennsylvania taxpayer may deduct the amount of their PA ABLE contributions, up to $18,000 per year.

Yes. First, remember to report circumstances that might affect SSI benefits to the Social Security Administration (SSA) -- this includes ABLE account activity if it could impact SSI benefits. SSA will be aware of your ABLE account activity because PA ABLE is required to report account information to the SSA monthly, including the account value and withdrawals.

Second, gifts to SSI recipients can impact the recipient’s benefits. To avoid any potential impact, gifts can be made directly to the recipient’s ABLE account.

Third, income from the SSI recipient’s work is considered countable income even if it is directly deposited by the employer into the recipient’s ABLE account.

Yes. Account Owners can roll over 529 accounts to ABLE plans, up to the ABLE annual contribution limit (currently $18,000). Please note that you may process a rollover from a 529 account into a PA ABLE account owned by you or a member of your family (as defined in the PA 529 GSP and PA 529 IP disclosure statements) and funds must be received within 60 days of the withdrawal to avoid tax consequences.

Yes. An ABLE account can be transferred, without tax consequence, if the new Beneficiary is a sibling of the old Beneficiary and is eligible to have an ABLE account. The annual contribution limit restricts the amount placed in the new Beneficiary’s account.