Saving While On Social Security Disability

Claims written on binder

Collecting Social Security Disability benefits does not mean that an individual cannot save money while they are receiving their benefit. Both SSI and SSDI have different rules regarding savings and asset limits, and Illinois legislators and regulators are working to make saving easier for individuals collecting these and other social insurance benefits.

Income and Asset Limits

There are no asset limits for individuals to collect SSDI benefits. Thus, it doesn’t matter if an individual has $100, or $100,000 in the bank. However, SSI and Social Security Claims in Chicago are a needs-based program that does have income and asset limits. If an individual is disabled per SSA rules, then they may not have more than $2,000 in cash assets in accounts. To collect SSI, an individual’s primary residence and automobile are excluded, but secondary properties including rental homes and businesses, as well as any additional automobiles, are factored into the equation.

Illinois Makes it Easier to Achieve a Better Life

Rules within Medicaid and SSI limit the amount of money an individual can save. The more that is saved, the greater the likelihood that it will affect an individual’s monthly benefit. To address this and make it possible for individuals to strengthen their financial position, state Treasurer Michael Frerichs is promoting a new account named the “Achieving a Better Life Experience,” or ABLE.

These accounts are similar to 529 college savings plans in that they are not taxed when the funds are utilized for approved expenses such as housing, medical bills, and education. These accounts make it possible for disabled parents to care for their needs and the needs of their children without risking the loss of the benefit programs they depend upon.

The ABLE accounts can grow at a rate of up to $14,000 in contributions each year and reach a maximum limit of $100,000 before SSI benefits will be suspended. Illinois caps the maximum balance of the account at $350,000 which is $50,000 higher than the limits in many other states. Regardless of how large the balance grows, it will have no impact on the receipt of Medicaid benefits or eligibility.

At this time, ABLE accounts may only be opened by individual’s whose disability onset date occurred prior to the individual turning 26-years-old. One final thing to remember is that upon an individual’s death, the accounts have a Medicaid payback provision that allows the state to claim the balance as repayment for benefits paid to the beneficiary.