The U.S. Department of Housing and Urban Development (HUD) recently issued long-awaited guidance clarifying that funds in ABLE accounts should not be included in determining a person’s eligibility for means-tested housing assistance. ABLE accounts are available to people with significant disabilities that developed before the age of 26, including those who meet the eligibility requirements under Supplemental Security Income (SSI) or Social Security disability programs, including Social Security Disability Insurance (SSDI). Money in an ABLE account can be used to cover “qualified disability expenses,” such as housing, education, and transportation. In general, to be eligible for some public benefits that many people with disabilities and their families rely on, including Medicaid and housing assistance, an individual is limited to no more than $2,000 in cash savings, retirement funds, and other items of significant value. ABLE accounts are an option for people with disabilities to build savings without taking away their eligibility for these important benefits.
The ABLE Act states that amounts in an ABLE account or contributions to an ABLE account and pay-outs for qualified disability expenses should not be counted for federal means-tested programs. Consistent with Internal Revenue Service and Social Security Administration policy, the HUD notice clarifies that, for the purpose of determining eligibility and continued occupancy for a list of key HUD programs, HUD will disregard amounts in the individual’s ABLE account. Some people with disabilities and their families have heard confusing or inaccurate information about whether or not participation in ABLE could threaten their receipt of other critical federal benefits. The notice is good news for people in HUD-funded programs and should be helpful in addressing questions about the treatment of ABLE account funds.