03 Aug Can a disabled person have savings and qualify for Medicaid?

Q. I am a social worker at a state facility for people with developmental disabilities. Most of the men I work with function at about 12 to 14 years of age. I’m working with a gentleman who makes minimum wage and works six hours a day. He can’t have more than $1,800 in the bank or he will not be eligible for health benefits, so he has to spend his money otherwise the state will take it. I’m trying to find something he can buy that will still have value. He can’t buy gold and he could buy a watch, but not more than one.
— Trying to help

A. We’re not sure if you have all the facts right here.

Assuming you’re talking about Medicaid eligibility, he is permitted to have non-countable assets not exceeding $2,000, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

“If the gentleman manifested his disabilities prior to the age of 26, he can be the owner of an ABLE account, which is a tax-advantaged savings account for an individual with disabilities authorized by the enactment of the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014, also known as the ABLE Act,” she said.

Such an account can be funded with up to $15,000 in 2020, she said.

Employees who are not participating in employer retirement plans can make an additional contribution up to the lesser of the employee’s compensation for the tax year or $12,490 in 2020, Whitenack said.

“Assets in the account are excluded from Medicaid resource limits and balances of less than $100,000 are excluded from SSI asset limits,” she said. “The assets in an ABLE account can be used for Qualified Disability Expenses, which are any expenses that are related to the account owner’s disability that assists him or her in maintaining his or her health, independence or quality of life.”

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This story was originally published on Aug. 3, 2020.

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