After much anticipation and delay, Illinois families can finally utilize the ABLE Account Program. The ABLE Account Program (15 ILCS 505/16.6) allows individuals receiving SSI and other means-tested programs to open up a bank account (similar to a checking account) which does not count against the means-tested program’s resource limit.
A means tested program is a government program that provides benefits to individuals based on their limited means and resources. People qualify for SSI and other means-tested programs based on the level of income and/or resources available to them. Only the people below the income and/or resource threshold qualify for a means-tested program.
To be eligible for the ABLE Account Program, an individual must have a disability that developed or occurred prior to the age of 26. Anyone whose disability arose after the age of 26 is not eligible for the ABLE Account program.
ABLE Accounts are very flexible. Anyone can contribute to the account, including the disabled individual, family, friends, and even strangers. The total yearly contribution from any one individual, however, is limited to $14,000 and contributions in the aggregate over $100,000 are counted against a means tested program’s resource limit in determining eligibility. That means an ABLE Account Owner might become ineligible for benefits if the total account balance over $100,000 exceeds the threshold for a number of resources a person can have in order to qualify for the particular benefit.
If the ABLE Account balance is over $100,000, and if the excess exceeds the resource limit for a means-tested program, then the benefits will be suspended until the account balance no longer exceeds the resource limit. The account owner continues to be eligible for Medicaid, however, regardless of the account balance.
There are fees associated with ABLE Accounts. The funds in the account are also subject to the State as a creditor after the beneficiary dies, similar to a self-settled special needs trust. ABLE Account funds, therefore, cannot be passed on after death. They will default to the State, just like a self-settled special needs trust.
ABLE Accounts are a good alternative to self-settled trusts or pooled trusts. They can be used to protect and maximize a beneficiary’s own resources during life while preserving the beneficiary’s eligibility to receive or continue receiving government benefits from a means-tested program. They are also a good vehicle for court-ordered payments of support for an adult, disabled child as the result of a divorce.
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