Frequently Asked Questions
| Category | Question | Answer |
|---|---|---|
| Eligibility | Do I have to prove eligibility for NC ABLE? | No. However, you should have a record of the doctor's signed diagnosis, a benefits verification letter from the Social Security Administration or other relevant documentation for account verification, as needed. |
| QDEs | Do I have to prove that withdrawals are for qualified disability expenses? | Not at the time of the withdrawal. Annually, NC ABLE will report the total amount of your withdrawals to the IRS and the date and amount of each of your withdrawals to the Social Security Administration. In the event that either entity wants to verify the expenses, it’s recommended that you keep detailed records. |
| Eligibility | Can I have more than one NC ABLE account? | No. You're limited to one ABLE account, except in the case of a rollover from another qualified ABLE program. This extends beyond NC ABLE to include accounts in other ABLE programs.
In the case of a rollover to an ABLE account for the same account owner, the account from which the funds are withdrawn must be closed within 60 days of the withdrawal. |
| Contributions & Withdrawals | What are the contribution and account balance limits I need to be aware of with an NC ABLE account? | There is an annual contribution limit of $18,000 from all sources. Also, an employed Account Owner can contribute an additional amount each year up to the lesser of (1) $14,580 or (2) the Account Owner’s earned income. There is a total account balance limit of $540,000. However, ABLE account balances in excess of $100,000 count toward the resource limit for SSI. |
| Contributions & Withdrawals | Can friends and family make contributions into my account? | Absolutely. Anyone can contribute directly to your account. No matter who contributes, you, the Account Owner or Authorized Individual, retain control over the account. |
| Checking & Investments | How often can I change my investments? | Twice per calendar year. You can change your investment options for any NEW contributions at any time. |
| Contributions & WIthdrawals | What is a recurring contribution? | These are contributions of a specific amount made automatically into your account on a custom frequency basis. For example, you can set up recurring contributions of $25 per month. This makes the process of investing very simple. |
| Checking & Investments | What is a Systematic Exchange? | This automatically moves funds from one investment option to another. |
| Contributions & Withdrawals | What is a Systematic Withdrawal? | This is a way of making automatic withdrawals, such as when you'd like to use your account to make payments each month. You can make systematic withdrawals to the bank listed on your account, by mail to your address, or to a third party. |
| Checking & Investments | What is an investment? | An asset or item purchased with the hope of a gain in the future. |
| ABLE to Work | I am working and earning income – can I contribute more than the $18,000 limit? | Yes - ABLE Account Owners who earn income may exceed the annual $18,000 contribution limit. The additional annual contribution amount allowed is equal to the federal poverty level for a one-person household (in your state of residence) or the account owner's gross wages, whichever is less. Individuals may not be eligible if they are already contributing to their retirement through&%2358;
a defined contribution plan an annuity contract an eligible deferred compensation plan Account Owners should keep adequate records to ensure the limit is not exceeded. Any increase in contributions could impact tax obligations, so consult a tax advisor before making any such increase. If you are eligible, fill out the Self Certification form. |
| Contributions & Withdrawals | What is Ugift® and how do I use it? | Ugift® is a feature of your ABLE account that allows friends and family to contribute to your savings in lieu of traditional gifts. It's simple to use - just log in to your account to find your code and share it with friends and family, who can use it at UgiftABLE.com to contribute directly into your account. Learn more by reading our Ugift ABLE FAQ. |
| Account Owners, Authorized Individuals & Interested Party | Why are ABLE accounts important? | An ABLE account is a special type of savings account that has tax advantages and generally does not jeopardize public, means-tested benefits, such as Medicaid and SSI, if withdrawals from the account are spent on qualified disability expenses. The eligible individual with a disability is the owner of an ABLE account, but the owner can have an Authorized Individual, such as a parent or guardian, help with opening and managing the account. |
| Account Owners, Authorized Individuals & Interested Party | What is an Authorized Individual? | An Authorized Individual may be designated to open and manage an account on the Account Owner’s behalf. An Authorized Individual has “full access” to the account, and they can do anything an Account Owner can do, such as withdraw money, change investments, or make other changes to an ABLE account.
An Account Owner with legal capacity may designate any person or entity to act as an Authorized Individual through a power of attorney. If the Account Owner does not have legal capacity, then the permitted Authorized Individual, in order of priority, are the Account Owner’s&%2358;
1. Agent under a power of attorney;
2. Conservator or legal guardian;
3. Spouse;
4. Parent;
5. Sibling;
6. Grandparent; or
7. Representative payee appointed for the Account Owner by the Social Security Administration.
More than one Authorized Individual may be appointed to an account. |
| FAFSA | Does money in an ABLE account count as income if you are applying for Free Application for Federal Student Aid (FAFSA)? | No. ABLE accounts are NOT considered an asset of the student or their parent(s) in determining financial aid for FAFSA. To learn more, visit this website. |
| QDEs | Can I spend my NC ABLE account on things like food, clothing and cell phones? | Money in an ABLE account can be spent on a broad range of what are called “qualified disability expenses” or “QDEs.” QDEs are expenses that directly benefit the Account Owner in maintaining or improving health, independence, or quality of life. QDEs also include basic living expenses and are not limited to items for which there is a medical necessity. Examples of QDEs include food, housing, education, transportation, employment support, assistive technology, support services, health, and funeral and burial expenses. To the extent that a clothing or cell phone expense is a QDE, then an ABLE account withdrawal to pay for such QDE is not subject to Federal tax and does not affect eligibility for public, means-tested benefits, such as SSI and Medicaid. |
| Contributions & Withdrawals | How can I take money out of my NC ABLE account? | There are several easy ways to withdraw money from an NC ABLE account. If you have funds in the checking account option, you can pay for qualified disability expenses using a debit card or by writing a check, or you can withdraw money at an ATM machine You can also use an Electronic Funds Transfer (EFT) to move money out of the account or contact our customer service team (888-627-7503) to have a check mailed to you. |
| Contributions & Withdrawals | How can you contribute money into an NC ABLE account? | Money can be contributed to an NC ABLE account through many methods, including&%2358;
• Filling out a check and mailing it in.
• Electronic funds transfer (EFT)—by moving from one bank account to another online. • Employer’s direct deposit of deductions from an Account Owner’s paycheck. • Direct deposit of SSI payments. • Rolling over money from a 529 savings plan. • With the Ugift® feature. |
| SSI and ABLE | If you chose to deposit your SSI payment directly into your NC ABLE account, do you have to deposit the full amount? Or can you deposit a portion of the payment? | SSI regulations requires the full amount of payment be made into one account. More information can be found on the SSI website.
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| Eligibility | Where can I find documentation of the fees associated with NC ABLE? | All fees associated with NC ABLE can be found in the &%23160;NC ABLE Plan Document. &%23160;You may also refer to the NC ABLE Plan Fees Disclosure. |
| SSI and ABLE | What happens if I receive public benefits and save over the $100,000 limit in my ABLE account? | ABLE account balances in excess of $100,000 count toward the resource limit for SSI. For example, if an Account Owner has a balance of $101,000, then $1,000 in the ABLE account is counted toward the Account Owner’s resource limit for SSI. If the balance subsequently falls to $100,000 or less (e.g., through withdrawals), then no part of the ABLE account is counted toward SSI’s resource limit.
Eligibility for other means-tested benefits, such as Medicaid, are not affected by the amount of money in an ABLE account. |
| Account Owners, Authorized Individuals & Interested Party | What happens if the account holder passes away? Where does the leftover account money go? | After the death of an Account Owner, first the funds from their ABLE account are used to pay any outstanding qualified disability expenses (QDEs)—like outstanding medical bills and funeral and burial costs.
Next, if the Account Owner was receiving Medicaid benefits, Medicaid can file a claim for the recovery of benefits paid since the date the Account Owner opened their ABLE account. Lastly, following the payment of outstanding QDEs and the Medicaid recovery claim, the remaining account balance is paid to the Account Owner’s estate or Successor Account Owner. |
| Account Owners, Authorized Individuals & Interested Party | What is an Interested Party? | An Interested Party is someone designated by the Account Owner or Authorized Individual to have “read only” access to an ABLE account where they can view the account balance, investments, and similar information. However, they cannot withdraw money, change investments, or make other changes to an ABLE account.
An Interested Party would be able to see how much money there is and how it is invested. Some examples of people who may be assigned this level of responsibility include a financial advisor, certified public accountant (CPA), or legal counsel, who are helping the Account Owner. |
| Representative Payees | What is a representative payee? | A representative payee is a person or organization appointed by the Social Security Administration (SSA) to manage Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) payments on behalf of an SSI/SSDI recipient (beneficiary). SSA generally appoints a representative payee if “the beneficiary is not able to manage or direct the management of benefit payments in his or her own interest.” (20 CFR § 404.2001(a), 20 CFR § 416.601(a)) However, the beneficiary does not have to be legally incompetent. (20 CFR § 404.2001(b)(2), 20 CFR § 416.601(b)(2)) In appointing a representative payee, SSA gives preference to the beneficiary’s legal guardian, spouse, or other relative if a beneficiary is at least 18 years old or the parent if the beneficiary is younger than 18. (20 CFR § 404.2021, 20 CFR § 416.621) |
| Representative Payees | Can a representative payee open and manage an ABLE account on behalf of a beneficiary (i.e., serve as an Authorized Individual)? | Yes. A person or organization that opens and manages an NC ABLE account on behalf of an Account Owner is known as an Authorized Individual, and the prioritized list (or hierarchy) of Authorized Individuals in the Federal ABLE regulations includes representative payees. The Authorized Individuals listed in the Federal regulations are, in order of priority&%2358;
1. Agent under a power of attorney;
2. Conservator or legal guardian; 3. Spouse; 4. Parent; 5. Sibling; 6. Grandparent; or 7. Representative payee appointed for the Account Owner by the Social Security Administration. While representative payees are prioritized lowest in the Federal regulations, often they are one of the higher priority individuals or entities as well, such as the beneficiary’s parent or guardian. In such case, the representative payee can enroll as the higher priority Authorized Individual on the list. For example, a representative payee who is also the beneficiary’s guardian could serve as the beneficiary’s Authorized Individual for an ABLE account, unless the beneficiary had a power of attorney in place. See also the FAQ “What happens if a person or entity ceases to be a representative payee for an SSI/SSDI recipient who has an NC ABLE account?” |
| Representative Payees | Does a representative payee have to be the beneficiary’s guardian, parent, or other family member to serve as the Authorized Individual for an ABLE account? | No. However, a representative payee is the lowest priority of potential Authorized Individuals for an ABLE account. The listed Authorized Individuals in the Federal ABLE regulations are, in order of priority, agent under a power of attorney, guardian or conservator, spouse, parent, sibling, grandparent, and then representative payee. Therefore, a representative payee can serve as an Authorized Individual only if no other person or entity on the priority list is willing and able to serve.
While representative payees are prioritized lowest in the Federal regulations, often they are one of the higher priority individuals or entities as well, such as the beneficiary’s parent or guardian. In such case, the representative payee can enroll as the higher priority Authorized Individual on the list. For example, a representative payee who is also the beneficiary’s guardian could serve as the beneficiary’s Authorized Individual for an ABLE account, unless the beneficiary had a power of attorney in place. |
| Representative Payees | How does a representative payee open an NC ABLE account? | If a representative payee is authorized to open an NC ABLE account on a beneficiary’s behalf (see the FAQ “Can a representative payee open and manage an ABLE account on behalf of a beneficiary?”), an account can be opened online at NCABLE.org or by submitting a paper enrollment form, available here.
As part of the enrollment process a representative payee must do the following&%2358; • Submit documentation from the Social Security Administration showing the person or entity has been appointed representative payee; • Agree that no other person or entity that is higher on the priority list (hierarchy) in the Federal regulations is willing and able to serve as the Authorized Individual; and • Agree to notify the NC ABLE Program if the person or entity ceases to be a representative payee. If a representative payee is also the beneficiary’s parent, guardian, or other person or entity on the Federal ABLE regulations’ priority list, the representative payee can enroll as the higher priority Authorized Individual on the list. The listed Authorized Individuals in the Federal ABLE regulations are, in order of priority, agent under a power of attorney, guardian or conservator, spouse, parent, sibling, grandparent, and then representative payee. See also the FAQ “What happens if a person or entity ceases to be a representative payee for an SSI/SSDI recipient who has an NC ABLE account?” |
| Representative Payees | Does the Social Security Administration have any requirements or restrictions for representative payees that may relate to ABLE accounts? | The Social Security Administration (SSA) has requirements and restrictions for representative payees, including those found in regulations, the Program Operations Manual System (POMS), and other guidance. Representative payees should be familiar with these requirements and restrictions and abide by them when serving as an Authorized Individual on an ABLE account. Documents from SSA that may relate to ABLE accounts include the following&%2358;
• POMS GN 02402.030 – Acceptable Types of Financial Institutions and Accounts (especially Section F)
• POMS GN 02402.050 – Account Titles
• POMS GN 02402.055 – Direct Deposit for Representative Payee Case
• POMS SI 01130.740 – Achieving a Better Life Experience (ABLE) Accounts
• POMS GN 00603.001 – Conservation of Benefits – Basic Policy
• POMS GN 00603.040 – Investments Other Than U.S. Savings Bonds
• POMS GN 00603.041 – The Use of Achieving a Better Life Experience (ABLE) Accounts by Representative
• 20 CFR § 404.2045 – Conservation and investment of benefit payments (SSDI)
• 20 CFR § 416.645 – Conservation and investment of benefit payments (SSI).&%23160; The documents listed above are provided as a courtesy and are not guaranteed to be current. North Carolina and Federal law and SSA’s requirements and restrictions regarding ABLE accounts and representative payees are subject to change, and representative payees should stay updated on any changes. |
| Representative Payees | Can a representative payee serve as a co-Authorized Individual if the beneficiary (Account Owner) already has an Authorized Individual managing the ABLE account? | No, unless the representative payee is also at the same priority level in the Federal ABLE regulations (e.g., parent, guardian) as the person currently serving as the Authorized Individual. The list of Authorized Individuals in the Federal regulations for an ABLE Account Owner who is unable to open and manage an account are, in order of priority, agent under a power of attorney, guardian or conservator, spouse, parent, sibling, grandparent, and then representative payee. |
| Representative Payees | Can a representative payee serve as an Authorized Individual if the SSI/SSDI recipient has a guardian? | No, unless the representative payee is also the guardian, or the guardian is unwilling or unable to serve as the Authorized Individual. The Federal ABLE regulations include a prioritized list (or hierarchy) of people and entities that can open and manage an account on behalf an Account Owner (beneficiary) who is unable to do so. The listed Authorized Individuals are, in order of priority, agent under a power of attorney, guardian or conservator, spouse, parent, sibling, grandparent, and then representative payee. The Authorized Individual is the highest priority person or entity willing and able to serve. If a representative payee is also the beneficiary’s parent, guardian, or other person or entity on priority list, the representative payee can enroll as the higher priority Authorized Individual. |
| Representative Payees | Can an SSI/SSDI recipient open an ABLE account if the Social Security Administration has appointed a representative payee? | Yes. However, we recommend coordinating your account opening and management with your representative payee. The Social Security Administration (SSA) prohibits representative payees from depositing SSI/SSDI funds into an ABLE account if the representative payee is not authorized to manage the account (i.e., is an Authorized Individual). In this case, you may want to consider adding your representative payee as the Authorized Individual on your NC ABLE account. |
| SSI and ABLE | Can SSI/SSDI payments be deposited in an NC ABLE account? | Yes. The NC ABLE Program accepts deposits of SSI/SSDI funds by representative payees and Account Owners (i.e., SSI/SSDI beneficiaries).
However, Account Owners and representative payees are responsible for complying with any accounting requirements or investment or deposit restrictions imposed by the Social Security Administration (SSA) or Federal or state law. SSA prohibits a representative payee from depositing SSI/SSDI payments in an ABLE account if the representative payee does not have signatory authority, i.e., is not the Authorized Individual for the account. Please see the following FAQs: • What types of investments can be used for SSI/SSDI funds? • What happens if a person or entity ceases to be a representative payee for an SSI/SSDI recipient who has an NC ABLE account? • Can a representative payee deposit SSI/SSDI payments in an ABLE account that holds funds from other sources, such as gifts or earned income? |
| Representative Payees | Can a representative payee deposit SSI/SSDI payments in an NC ABLE account? | Yes. The NC ABLE Program accepts deposits of SSI/SSDI funds by representative payees.
However, representative payees are responsible for complying with any accounting requirements or investment or deposit restrictions imposed by the Social Security Administration (SSA) or Federal or state law. SSA prohibits a representative payee from depositing SSI/SSDI payments in an ABLE account if the representative payee does not have signatory authority, i.e., is not the Authorized Individual for the account.
What types of investments can be used by a representative payee for SSI/SSDI funds? &%23160;•&%23160;What happens if a person or entity ceases to be a representative payee for an SSI/SSDI recipient who has an NC ABLE account? • Can a representative payee deposit SSI/SSDI payments in an ABLE account that holds funds from other sources, such as gifts or earned income? |
| SSI and ABLE | Can an NC ABLE Account Owner (beneficiary) deposit SSI/SSDI payments in an NC ABLE account? | Yes. |
| Representative Payees | What types of investments can be used by a representative payee for SSI/SSDI funds by a representative payee? | The Social Security Administration (SSA) lists U.S. savings bonds and insured, interest-bearing deposit accounts (e.g., FDIC-insured bank checking account) as preferred investments for SSI/SSDI funds that are saved (conserved). However, SSI/SSDI funds can be invested in any manner that is prudent for a trustee under state law. For example, North Carolina applies a prudent investor standard, and subject to that standard, permits a broad set of investments, including stocks and bonds. Please see the references below for more information.
SSA’s regulations&%2358; • 20 CFR § 404.2045 – Conservation and investment of benefit payments (SSDI) • 20 CFR § 416.645 – Conservation and Investment of Benefit Payments (SSI) SSA’s Program Operations Manual System (POMS)&%2358; • POMS GN 00603.040 – Investments Other Than U.S. Savings Bonds • POMS GN 00603.001 – Conservation of Benefits – Basic Policy North Carolina law&%2358; • NCGS § 36C-8-815. General powers of trustee. • NCGS § 36C-8-816. Specific powers of trustee. • NCGS § 36C-9-902(e). “A trustee may invest in any kind of property or type of investment consistent with the standards of this Article [9 of Chapter 36C, Uniform Prudent Investor Act].” The documents listed above are provided as a courtesy and are not guaranteed to be current. North Carolina and Federal law and SSA’s requirements and restrictions regarding ABLE accounts and representative payees are subject to change, and representative payees should stay updated on any changes. |
| Representative Payees | What happens if a person or entity ceases to be a representative payee for an SSI/SSDI recipient who has an NC ABLE account? | If person or entity stops serving as a representative payee for an SSI/SSDI recipient who has an NC ABLE account (whether by resignation or removal), the person or entity must notify the NC ABLE Program of the change and is no longer permitted to serve as an Authorized Individual (unless the person or entity is also one of the other Authorized Individuals in the Federal regulations). In addition to removal by the Social Security Administration (SSA), a beneficiary with legal capacity can remove a representative payee from an ABLE account.
In addition, SSA requires a departing representative payee to notify SSA to arrange for the transfer of the SSI/SSDI funds in the ABLE account to SSA or to another representative payee, who also may be the new Authorized Individual for the ABLE account. Representative payees should consider any possible consequences of withdrawing funds from an ABLE account for transfer to SSA or a new representative payee. If the funds are later redeposited in the ABLE account by the new representative payee or the Account Owner, the redeposited funds will count toward the annual contribution limit.&%23160; Also, if the Internal Revenue Service does not treat the withdrawal as a qualified disability expense under the Federal ABLE statute and regulations, the earnings portion of the withdrawal may be subject to income taxes. However, a change in the Authorized Individual for an ABLE account (e.g., from one representative payee to another) does not count as a withdrawal of funds. Please note that SSI/SSDI funds are not segregated in an NC ABLE account, so the representative payee is responsible for tracking the deposit and withdrawal of SSI/SSDI funds, as well as any investment gains on SSI/SSDI funds in the ABLE account. Information on account balances, contributions, distributions, and earnings is available anytime by logging into your beneficiary’s account at NCABLE.org. See Payee and ABLE Accounts from SSA. Other SSA resources include POMS GN 00502.114 – Representative Payee Responsibilities and Duties, 20 CFR § 404.2060, 20 CFR § 416.660, and A Guide for Representative Payees. |
| Representative Payees | What happens if a representative payee is an Authorized Individual for an SSI/SSDI recipient’s NC ABLE account but then a guardian is appointed for the SSI/SSDI recipient? | A representative payee is removed as the Authorized Individual on an ABLE account if another person or entity on the Federal regulations’ priority list (hierarchy) of potential Authorized Individuals, such as a guardian, is willing and able to serve. The listed Authorized Individuals in the Federal regulations are, in order of priority, agent under a power of attorney, guardian or conservator, spouse, parent, sibling, grandparent, and then representative payee.
The Social Security Administration (SSA) requires a departing representative payee to notify SSA to arrange for the transfer of the SSI/SSDI funds in the ABLE account to SSA or to another representative payee, who also may be the new Authorized Individual for the ABLE account. Representative payees should consider any possible consequences of withdrawing funds from an ABLE account for transfer to SSA or a new representative payee. If the funds are later redeposited in the ABLE account by the new representative payee or the Account Owner, the redeposited funds will count toward the annual contribution limit. Also, if the Internal Revenue Service does not treat the withdrawal as a qualified disability expense under the Federal ABLE statute and regulations, the earnings portion of the withdrawal may be subject to income taxes. However, a change in the Authorized Individual for an ABLE account (e.g., from one representative payee to another) does not count as a withdrawal of funds. Please note that SSI/SSDI funds are not segregated in an NC ABLE account, so the representative payee is responsible for tracking the deposit and withdrawal of SSI/SSDI funds, as well as any investment gains on SSI/SSDI funds in the ABLE account. |
| SSI and ABLE | Does NC ABLE provide separate accounting for SSI/SSDI funds in an NC ABLE account? | No. The NC ABLE Program does not provide separate accounting or a special subaccount for SSI/SSDI funds. However, information on account balances, contributions, distributions, and earnings is available anytime by logging into your, or your beneficiary’s, account at NCABLE.org.
See the Social Security Administration’s (SSA) guidance on estimating the SSI/SSDI portion of commingled funds in POMS GN 00603.140 Social Security Benefit Funds Commingled with Other Funds Belonging to the Beneficiary. This document is provided as a courtesy and is not guaranteed to be current. North Carolina and Federal law and SSA’s requirements and restrictions regarding ABLE accounts and representative payees are subject to change, and representative payees should stay updated on any changes. Representative payees are responsible for complying with any accounting requirements or investment or deposit restrictions imposed by the Social Security Administration (SSA) or Federal or state law. |
| SSI and ABLE | Can a representative payee deposit SSI/SSDI payments in an ABLE account that holds funds from other sources, such as gifts or earned income? | The Federal ABLE statute and regulations do not prohibit the deposit of SSI/SSDI payments in an ABLE account that holds funds from other sources, such as gifts or earned income, and the NC ABLE Program accepts deposits of SSI/SSDI funds by representative payees and Account Owners.
The Social Security Administration recommends against commingling funds but does not prohibit it&%2358; “ABLE accounts, however, may hold funds from a variety of sources, and there may be incentives to encourage contributions from the beneficiary’s family and friends. Generally, we do not recommend that a payee mix benefits with other funds that belong to the beneficiary. If the payee chooses to mix benefits with other funds that belong to the beneficiary, the payee must maintain a recordkeeping system to differentiate SSA benefits from other funds.” Read more here. Please note SSI/SSDI funds are not segregated in an NC ABLE account, so the representative payee is responsible for tracking the deposit and withdrawal of SSI/SSDI funds, as well as any investment gains on SSI/SSDI funds in the ABLE account. Information on account balances, contributions, distributions, and earnings is available anytime by logging into your beneficiary’s account at NCABLE.org. Please see the FAQ “What happens if a person or entity ceases to be a representative payee for an SSI/SSDI recipient who has an NC ABLE account?” |
| SSI and ABLE | Can an SSI/SSDI recipient (beneficiary) deposit SSI/SSDI payments in an ABLE account that holds funds from other sources, such as gifts or earned income? | The Federal ABLE statute and regulations do not prohibit the deposit of SSI/SSDI payments in an ABLE account that holds funds from other sources, such as gifts or earned income, and the NC ABLE Program accepts deposits of SSI/SSDI funds by representative payees and Account Owners. |
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This page was last modified on 06/28/2024