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SSI’s Plan to Achieve Self Support

How a PASS Works

  • When income or resources are used in an approved PASS to support a work goal, the income and/or resources will not count in determining SSI eligibility or payment amount.  
  • The result is that the individual will be eligible for SSI or a larger SSI payment based on the countable income and resources that remain.

Key Requirements for a PASS

  • Must have a written proposal that includes a work goal (i.e., a specific job or profession).
  • Must outline steps person will take to reach the work goal.
  • Must outline how money will be saved and spent on things that are crucial to reaching the work goal.
  • Must state when (month and year) person will achieve the work goal.
  • A PASS can be approved for whatever length of time is necessary to achieve the work goal.  The SSI program’s PASS specialist can be expected to do a PASS progress review, at least once per year, to make sure the person is in compliance with the approved plan.
  • Money earned in final work goal must lead to:  significant reduction in SSI payments; or, if person gets Social Security with no SSI prior to PASS approval, the work must lead to a termination of Social Security disability through earnings.

Expenses Allowed in Approved PASS

All reasonable and necessary expenses, such as:

  • College or training costs
  • Transportation, including vehicle lease or purchase
  • Vehicle insurance, maintenance, repairs, warranty costs
  • Computer, software and Internet costs
  • Work clothes, professional clothing, child care
  • Business start-up costs
  • Anything reasonably tied to the work goal

Example:  Ariel, age 22, receives Social Security disability benefits of $520 per month and a monthly SSI payment of $271.  He completed high school at age 19 and the State VR agency has agreed to pay for Ariel to attend a 12-month training program to become a welder.  The program will begin in three months and when he attains his welding certification, Ariel will need his own vehicle to travel to most of the jobs that will be available.  During the training program, Ariel will earn $665 per month gross pay working part-time at a grocery store.

Ariel’s PASS:  To reach his vocational goal as a certified welder, Ariel proposes to save each month $500 of his Social Security and $300 of his wages toward the purchase of a $10,000 used car.  He will save $800 per month for 15 months for a total of $12,000 to pay for the car, sales tax, license plates, and the first six months of car insurance.

This is how Ariel’s SSI is calculated with a PASS:

$520 Social Security
-$20 General income exclusion
-$500 PASS exclusion
$0 Countable unearned income
$665 Gross wages
-$65 Earned income exclusion
-$300 Additional 50% exclusion
-$300 PASS exclusion
$0 Countable earned income
$771 Base SSI rate
-$0 Countable income
$771 New SSI rate

Achieving a Better Life Experience (ABLE) Accounts

ABLE accounts are authorized by section 529A of the Internal Revenue Code which became law in late 2014.  They allow a “designated beneficiary” with a disability to save money in an account for future Qualified Disability Expenses.  The first ABLE accounts became active in 2016 and there are now active accounts in more than 35 states.

Key Elements of ABLE Accounts

  • Disability requirement – getting SSI or Social Security disability payments based on disability that began before age 26; or there is a certification made that certain disability/blindness criteria is met and occurred before age 26.
  • Contributions – any “person” can contribute, including designated beneficiary, a family member or friend, or a trust.
  • Contribution limits – up to $15,000 per year in 2019, plus up to an additional $12,140 in 2019 if money comes from earnings of designated beneficiary.
  • Can start ABLE account in any state with a national account (even if no active account in designated beneficiary’s state of residence).
  • Range of investment options – State ABLE programs generally allow conservative, moderate, and more aggressive options.
  • Ease of start-up – State programs generally allow for online start-up, designed to complete registration in less than 30 minutes.  Accounts can typically be set up by the designated beneficiary or an authorized family member, but some may choose to pay an attorney or other professional for assistance.
  • Modest fees to start and use account – These will vary from state-to-state.  Person can use ABLE National Resource Center,, to compare costs in different states.
  • Distributions allowed for Qualified Disability Expenses – see below. 

Wide Range of Qualified Disability Expenses (QDEs) Permitted, Including:

  • Education, housing, and transportation
  • Employment training and support
  • Assistive technology and related services
  • Health, prevention and wellness
  • Financial management and administrative services, legal fees
  • Expenses for ABLE account oversight and monitoring
  • Funeral and burial
  • Basic living expenses (These appear in SSI policy and proposed IRS regulations, but not in ABLE Act.)

Key SSI and Medicaid Policies

  • Contributions of individual to ABLE account still count as income for SSI, Medicaid, and IRS.
  • Contributions from all others not counted by SSI or IRS as income of designated beneficiary.
  • Earnings from ABLE account are excluded and not counted by SSI or IRS.
  • Up to $100,000 of account balance excluded and not counted by SSI.
  • When countable resources exceed $2,000, as the result of ABLE account exceeding $100,000, SSI payments are “indefinitely suspended” but Medicaid continues.  SSI payments can resume, without a new application, if ABLE balances are again below $100,000 even if that occurs several years later.

So long as distributions are for QDEs, distribution is not considered income by SSI or Medicaid.  This includes distributions for housing costs, including rent, mortgage, taxes, or utilities.