20 Nov Can I have a 401(k) plan with New Jersey Workability program?
Q. Can I have a 401(k) plan on the New Jersey Workability program?
A. It’s a great question.
It’s always important to know what limitations might exist when receiving benefits from the state.
The New Jersey Workability program offers health coverage to those with disabilities who are working, but make more income than is allowed by Medicaid to receive those benefits, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.
There are eligibility requirements for those who are at least 16 years of age including New Jersey residency, full- or part-time employment and being disabled as defined by the Social Security Administration or the state’s Medical Review Team at the Division of Medical Assistance & Health Services, she said
There are also two income thresholds to consider, Mott said.
One is based on unearned income from sources such as alimony, Social Security Disability (SSDI), Survivor’s Benefits, unemployment, interest or trust payments.
For 2023, the unearned income threshold for a single resident is $1,215 a month and $1,644 a month for a married individual, she said.
The second threshold is determined by earned income from sources such as wages, sick leave, private disability and worker’s compensation, Mott said. Earned income cannot exceed $6,161 per month for a single individual or $8,303 per month for a married resident, she said.
It’s important to note that unearned income will lower the amount of earned income one can have, she said.
“In the past, eligibility did include an asset limit of $20,000 on accounts such as checking and savings at a bank, but that was discontinued on April 1, 2023,” Mott said. “The program does not include the value of residences, vehicles, IRAs, 401(k)s or other retirement accounts or New Jersey ABLE accounts when evaluating eligibility.”
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This story was originally published on Nov. 20, 2023.
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