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Can I have a savings account while on Social Security disability?

Yes. If you receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) you can have a savings account. However, there could be limits on how much you can have in it, depending on which type of disability benefit you collect.

To be eligible for SSDI, you must have a work history and a medical condition that leaves you unable to work for at least a year or is expected to end in death. There are limits on how much you can earn from work while collecting SSDI payments but no restrictions on assets. You can have a savings account with as much money in it as you choose to save.

That is not the case if you receive SSI, which provides cash assistance to older, disabled and blind people in financial need. The Social Security Administration (SSA), which operates the program, sets different (and considerably more complex) limits on income for SSI recipients, and also sets a ceiling on financial assets: You can't own more than $2,000 in what the SSA considers “countable resources” as an individual or more than $3,000 as a couple.

Certain assets are not countable, among them the home you live in, one vehicle you or someone in your household uses for transportation and a life insurance policy or policies with a total face value of $1,500 or less.

Money in a savings account, however, is a countable resource. That means you could be ineligible for SSI if your account contains more than $2,000 ($3,000 for a couple), or if it contains less but your total countable assets, including the savings, exceed those figures.

Savings options for SSI beneficiaries

The SSA makes exceptions for certain savings vehicles and programs designed for disabled and low-income people. Using them, some beneficiaries can have well over $2,000 in savings and keep collecting SSI.

Achieving a Better Life Experience (ABLE)

ABLE accounts provide a tax-free savings opportunity for people with disabilities that were diagnosed before they reached age 26. The first $100,000 in an ABLE account is not a countable resource for SSI. Any balance over $100,000 will be figured into calculating whether you meet the cap on assets.

You can open an account through ABLE programs available in most states. Many allow eligible out-of-state residents to set up accounts, but there may be tax advantages to using your own state's plan. The ABLE National Resource Center lets you compare state programs.

Plan to Achieve Self-Support (PASS)

This is a written plan you submit to Social Security outlining a work-related goal that can help you become financially self-sufficient and reduce or eliminate your need for disability benefits. With a PASS, you can set aside money for items needed to reach that goal, such as education, childcare or assistive technology. That money is not considered a countable resource for SSI.

To apply for a PASS, fill out form SSA-545-BK and send it to your local Social Security office. The SSA can refer you to a vocational counselor or PASS specialist in your region for help writing your plan. Call the SSA at 800-772-1213 or consult its PASS brochure to learn more.

Individual Development Accounts (IDAs)

IDAs serve as vehicles for people with low incomes to save money from their earnings for education, buying a first home or costs associated with starting a business.

To open an IDA, in most cases you must be working and receiving Temporary Assistance for Needy Families (TANF) benefits. Your contributions to the account can be matched by funds from state and federal aid programs, and none of that money is counted when determining your eligibility for SSI. Contact your state TANF agency for information.

Trusts

Trusts are legal agreements where one party holds and manages financial resources such as cash and property for the welfare of another. Some types of trusts can be used to hold money without jeopardizing your SSI benefits.

Whether that's the case will depend on the type of trust, who controls it and how its contents are used. For example, money paid directly to you from a trust, or used to provide your food and shelter, can be counted as income and deducted from your SSI benefit. You can learn more in the SSA online article Spotlight on Trusts.


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Keep in mind

  • Cash on hand is a countable resource, whether it's in a bank or not.
  • Also countable are investments like stocks and bonds, and property or vehicles you own besides the ones that provide your residence and main mode of transportation.
  • If you live with a spouse or parent, or are an immigrant with a sponsor, a portion of their assets, including money in the bank, may be counted toward your SSI eligibility.

Published August 18, 2021