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By Traci Blake Salami, Esq., Littman Krooks LLP

Since the inception of the Achieving a Better Life Experience (ABLE) Act of 2014, savings programs all over the United States continue to gain momentum and create opportunities for individuals with disabilities to achieve more financial independence.  We previously discussed the New York ABLE Act Program and all of its advantages for recipients of means-tested government benefits programs.  Now, the rapidly growing Ohio-based national ABLE program, STABLE, has partnered with True Link Financial to give program participants an easier method of using funds in their investment accounts.  The STABLE program is offering the use of a True Link payment card called STABLE Card to pay for qualified disability expenses while maintaining eligibility for government benefits.

The STABLE card is essentially a prepaid debit card.  While the STABLE card does not give direct access to cash, it allows program participants to move funds from the investment account to the debit card.  STABLE program participants can budget alone if they usually manage their own finances.  If participants have an agent under a Power of Attorney or Guardian, then that individual will also have a companion card and can help beneficiaries budget by pre-loading funds to the STABLE card as needed.

The appeal of the STABLE card is the funds loaded onto the card are those funds that would not otherwise be readily available for STABLE participants to use daily with ease.  Instead of placing check requests from the investment account to cover expenses, program participants will now be able to use the STABLE debit card to pay for qualified disability expenses, including but not limited to, basic living expenses, transportation, education, assistive technology, personal support services, and legal fees.  The benefit of the STABLE card is the ability for individuals with disabilities to manage their expenses directly and without delay.

The standard government benefit rules are modified for ABLE program participants and those who choose to obtain a STABLE card.  Housing expenses and rent/mortgage payments, which are considered qualified disability expenses, do not negatively affect SSI recipients unless the participants hold on to funds withdrawn from the ABLE account beyond the month of receipt.  It is important to note that participants need to keep their ABLE account balances at or below $100,000 in order to avoid the funds in excess of $100,000 being counted towards the resource level limit for SSI benefits. In the event that a STABLE cardholder has funds in excess of $100,000, their SSI benefits will be suspended until such time the account is below $100,000.  Also, the participant may no longer be eligible for Medicaid benefits during those months in which SSI benefits are suspended.

Non-qualified disability related expenses will expose the STABLE program participant to income taxes on the money spent to cover the non-qualified good or service plus an additional 10% tax penalty. Program participants must keep track of their spending as the IRS may audit the account and request a verification of expenditures. The STABLE program will not make inquires on the items you choose to purchase or monitor your spending. However, the STABLE program has an online system for card holders to monitor their own spending, review their purchases, upload receipts, and write notes regarding the need for the expenditure in the event of audit by the Social Security Administration, Medicaid, the IRS, or other government organizations.

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