Your Stimulus Check Is Coming – Should You Set Some Aside In An ABLE Account?

The Senate has passed President Joe Biden’s $1.9 trillion stimulus package, a major step in the bill’s journey into law. The Senate voted Saturday to approve the massive Covid-19 relief plan, which includes $1,400 stimulus checks for many Americans, $350 billion in aid to state and local governments and an extension of federal unemployment benefits. The House now plans to vote on the Senate legislation so that President Joe Biden can sign it into law.

Many Americans with disabilities are eligible for a stimulus payment and many have worried about how the stimulus payment will impact their eligibility for public needs based benefits. Fortunately, stimulus payments of this kind are not being treated as income by federal programs (or state or local programs which are financed with federal funds) and are disregarded as resources for 12 months (26 U.S. Code § 6409). This means that people with disabilities can accept these payments without putting Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), and other benefits at risk.

Because of this, special savings accounts for people with disabilities are getting renewed attention, as a way to set aside all or part of federal stimulus payments. ABLE accounts were first introduced in 2016 as a way to give disabled people greater financial security and more independence. Disabled people can save money in the tax-favored accounts without risking the loss of need-based government benefits, like health insurance or supplemental income. Here’s why the accounts are attractive. Many people with disabilities struggle financially and rely on federal aid. But in general, a disabled person can’t have more than $2,000 in savings or other assets to qualify for Medicaid health coverage or Supplemental Security Income, which helps low-income disabled people.

As mentioned above, stimulus payments are not treated as income, and there are no restrictions on how the money can be spent. But if the recipient doesn’t spend the cash within 12 months, it counts against asset limits and could jeopardize benefits. Hence why ABLE accounts have seen an increase in popularity. If the money is deposited in an ABLE account, it doesn’t count toward the $2,000 cap. It can be saved or invested and spent later on a variety of disability-related needs that arise, like housing, transportation, education and training. Disabled people working toward independence can save for a down payment for an apartment or a wheelchair-accessible car. Or the funds can be used to save for specialized therapy or legal fees.

However, there are certain factors to be aware of. Currently, to be eligible for an ABLE account, someone must have been disabled by age 26. If an individual was not disabled by the age of 26 they are not eligible for an ABLE account. Additionally, the maximum contribution for 2021 is $15,000. Disabled people who work can also save an additional amount from their earnings, usually, about $12,000 (the amount varies by state), for a total of $27,000. Many Americans will need to use their stimulus payment for urgent expenses. But ABLE-eligible individuals may want to consider saving all or a portion of their payment in a tax-advantaged ABLE account. If funds aren’t needed immediately, the stimulus is an opportunity to build an emergency fund, invest for the future, and have money available when you need it most.

Ask Gus: What is that sound coming from the wall?

Hook Law Center: Gus, sometimes I swear I can hear something coming from the walls, what could it be?

Gus: You could have mice! Did You Know That Mice Sing and Rats Giggle?! Neither did I, but they do! Mice emit ultrasonic vocalizations, most frequently as pups, and when they’re distressed, for example, when separated from the nest or feeling cold. But as adults, mice use complex calls to get a different sort of attention: from potential mates. Adult male mice produce complex calls around females, or when they detect female pheromones. Researchers found that not only did calls vary widely by individual, but that they could identify within each mouse’s call distinct sounds (syllables), sequences (phrases), and repetitions (motifs).

And when researchers recorded the calls and played the sounds back at lower frequencies and slower speeds, they found that the vocalizations had a lot in common with birdsong. These “singing mice” used jumps and dips in pitch, rapid chirping sounds, and had a tendency to sing using unique syllable types, just as one person might emphasize certain words or speak with a regional accent. 

Rats, too, produce ultrasonic vocalizations. But, unlike mice the noises a rat produces seem to indicate a specific emotional response. For example tickling – adult rats produce ultrasonic calls around 50 kilohertz in response to tickling, a behavior that’s been tested in the lab, using what the researchers called “manual tickling sessions”— and some suspect there may be a correlation to human laughter. A study published in the journal Behavioral Brain Research in 2000 tested this hypothesis, and found that not only did young rats exhibit a strong vocal response to tickling that was similar to “youthful human laughter that typically occurs during play,” but that rats that were isolated and kept away from others actively sought out tickling more frequently. I guess I’ll have to stop hunting them for fun!