The U.S. Department of Housing & Urban Development (HUD) has released a long-awaited decision concerning disabled individuals who hold ABLE accounts. It is good news for these individuals and their families.
As is already the case for programs like Medicaid and Supplemental Security Income, HUD will ignore funds in ABLE accounts when evaluating an applicant’s eligibility for federal assisted housing programs, such as Section 8. (The one exception: monies deposited in the account that represent the applicant’s wage income.) Read the April 26, 2019 HUD notice, “Treatment of ABLE Accounts in HUD-Assisted Programs.”
The ABLE program (Achieving a Better Life Experience) was established in 2014. It permits an individual with disabilities to save in a tax-advantaged account without jeopardizing eligibility for vital federal programs. Prior to ABLE, having more than $2,000 in countable resources rendered a person ineligible for benefits. That rule forced many special needs individuals to keep themselves unnecessarily impoverished.
The maximum annual contribution to an ABLE account is $15,000. Funds in the account are capped at $100,000. The funds may be used only for qualified disability expenses. Also, the account holder must have developed the disability by age 26. (Note: Raising the age requirement is currently under discussion.)
Unlike an ABLE account, a Special Needs Trust does not impose a cap on the value of the funds or on the amount that can be contributed annually. Nor does it require the person to have developed his/her disability by age 26. Thus, while ABLE is certainly a useful tool for those with special needs, it is neither a perfect solution nor a substitute for a Special Needs Trust.
If you have a loved one with special needs, please call our office at 561-625-1100 to make an appointment. Our lawyers can help you determine the best planning options to secure your loved one’s welfare and financial security.