Tax – ABLE Act – Social Security Administration Issues Implementation Instructions

The Social Security Administration (SSA) released internal instructions, effective on December 18, 2015, for implementation of the Achieving a Better Life Experience (ABLE) Act programs and accounts in relation to Supplemental Security Income and Social Security disability benefits. The instructions are included in SSA’s Program Operations Manual System (POMS).  POMS instructions are written for SSA staff to guide them in making decisions about numerous aspects of eligibility and benefits payments. In these POMS instructions, SSA has joined the Internal Revenue Service (IRS) in taking an overall positive approach to implementation of the ABLE Act and to incorporating approaches intended to encourage beneficiary independence and self-direction.

In this POMS issuance, guidance is given on how to treat contributions to and distributions from ABLE accounts for purposes of the SSI program; qualified disability expenses for housing and how they will be treated; treatment of automatic contributions to an ABLE account from a beneficiary’s earnings; and the impact of exceeding the special SSI ABLE account and resource limits. For the most part, the POMS release is written in a straightforward manner and provides substantial information about how SSA will be treating funds in these accounts; however, the POMS are written for the use of SSA staff and contain numerous codes and undefined terms, as well as internal references to other POMS sections. SSA has indicated that it will produce a fact sheet for beneficiaries in the near future.

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