How Much Money Can You Have in The Bank While on Social Security Disability?

Being unable to work because of a disability or blindness presents a financial hardship. State-funded disability programs may provide some relief when the medical condition is of short duration or results only in a partial disability. When the medical condition preventing you from working is expected to last for at least 12 months or cause death, two programs administered by the Social Security Administration may offer financial help in the form of monthly payments and other benefits.

The extent that money in the bank affects your initial application for benefits or your right to continue receiving them depends on the program paying the benefits. Money in the bank may have more of an effect on benefits through the Supplemental Security Income program or than it will if your benefits are paid through Social Security Disability Insurance.

A Social Security disability lawyer at The Clauson Law Firm, PLLC, can be a valued resource for information and experienced representation from applications through appeals on all matters related to SSI and SSDI. Here, to get you started is an overview of what you need to know how money in the bank may affect your right to Social Security disability benefits.

Two Social Security disability programs at a glance

Under the rules followed by the SSA, a determination that an adult applying for SSI or SSDI is disabled requires evidence of a medically determinable physical or mental impairment expected to last for a continuous period of at least 12 months or result in death that prevents them from engaging in substantial gainful activity. “Substantial gainful activity” means work activity requiring significant physical or mental activities, such as walking, standing, climbing stairs, lifting, and remembering. Work is gainful when you profit from it through wages from a job or income received from self-employment. Household chores, attending social activities, or taking care of yourself generally do not qualify as gainful work activities.

One method used by SSA to determine whether you can engage in a substantial gainful activity is how much you earn each month. If you earn more than $1,310 during a month in 2021, it shows that you have engaged in substantial gainful activity and no longer have a disabling condition preventing you from working.

SSI and SSDI may share the same method for determining whether a person is disabled, but they differ as far as financial requirements for eligibility. SSDI bases eligibility on your work record. You must have worked for a long enough duration at a job or self-employment and paid Social Security taxes on the income earned to be eligible for benefits through SSDI.

The length of time you must work to qualify for SSDI depends on the age at which you became disabled. A person whose disability began at a young age generally requires a shorter work history with earnings subject to Social Security taxes than a worker whose onset of disability was at an older age.

The amount of money that you have in the bank or the value of assets that you own does not play a part in the process used by Social Security to determine whether or not you qualify for SSDI benefits. Social Security may question the source of money in the bank during its review of your application for SSDI or during a periodic eligibility review that SSA conducts after you have been receiving benefits for a while.

The SSA may ask you to prove the money did not come from earnings received from an employer or through self-employment. To avoid issues about substantial gainful activity based on earned income, you should keep records of money deposited into a bank account and show them to your SSDI lawyer in case Social Security challenges the source of the funds.

In contrast to the SSDI program that generally does not make financial resources part of the process to determine eligibility, financial need is a factor in the determination process for SSI eligibility. You may have a qualifying disability or be blind, but you also must meet the financial criteria, which limits your income and the value of financial resources available to you. Financial resources, including money on deposit in a bank, cannot exceed $2,000 in value for an individual and $3,000 for a couple.

Resources excluded from SSI limits

When combined with the value of other resources available to you, money in the bank may cause you to exceed the resource limits for SSI eligibility. However, the value of some resources may not count. For example, the value of land and any structures generally counts as a resource, but it does not count if it is used as your principal residence. The value of the land and the house is excluded. Another example of a resource that may not count toward the limits is a vehicle, which may be excluded if it is used for transportation by you or a member of your household.

Deemed bank accounts

If your spouse, who lives with you and is not eligible for SSI, has a bank account or other resources, Social Security treats a portion of the money on deposit as belonging to you. The deemed portion counts toward your allowable resource limit. Deeming may also apply to resources owned by the parents or, in cases involving parents who are divorced, the stepparent with whom a child applying for SSI resides.

Keeping money in an Achieving a Better Life Experience savings account

Money on deposit in a savings account at a bank counts toward the resource limits of $2,000 for an individual and $3,000 for a couple under the SSI program. However, the ABLE Act, which is a federal law, allows states to authorize the creation of savings accounts for the benefit of a person who is disabled and receiving Social Security disability benefits through the SSI program. All or part of the money on deposit in an ABLE account may be eligible for exclusion from the SSI resource limits.

The purpose of an ABLE account is to provide a source of funds to pay disability-related expenses. It supplements rather than takes the place of Social Security disability benefits.

An ABLE account allows a disabled person to have money in a bank account without it affecting SSI eligibility. The source of funds deposited into an ABLE account generally comes from relatives or friends wishing to provide financial assistance to the disabled person, but the law authorizing the accounts allows contributions from trusts, estates, corporations, partnerships, and other types of entities.

ABLE accounts offer tax advantages to contributors. Contributions made in 2021 to an ABLE account on behalf of a beneficiary that does not exceed $15,000 may allow the contributor to avoid payment of federal gift taxes.

The owner or beneficiary of the account, which is the disabled person, may make deposits to the account without it affecting SSI eligibility. Beneficiaries of ABLE accounts who work may make contributions to them provided neither they nor their employers contribute to a retirement plan for the benefit of the disabled person. Beneficiary contributions, under those circumstances, may be made to the ABLE account up to the gross annual earnings of the beneficiary or the federal poverty level for an individual, which is $12,880 in 2021.

Social Security excludes the first $100,000 on deposit in an ABLE account, but anything above that amount counts as a resource. If the overage causes you to exceed the resource limits for SSI, your benefits will be suspended until countable resources fall below the $2,000 or $3,000 limits.

The beneficiary of an ABLE account must be eligible for SSI because of a disability or blindness that began before they were 26 years of age. If you believe you qualify for an ABLE account, an SSI lawyer can review all of the guidelines for eligibility with you.

Money withdrawn from an ABLE account must be used on behalf of the beneficiary of the account and only toward qualified disability expenses, which is an expense related to the person’s disability. The scope of what may be a qualified disability expense is broad. Some examples include:

  • Housing
  • Transportation
  • Employment training
  • Education
  • Health

Neither the interest earned on an ABLE account nor distributions made from it toward qualified disability expenses count as taxable income of the beneficiary of the account.

Getting advice about bank accounts from an SSD lawyer

For people receiving them, Social Security disability benefits offer a way to avoid financial hardship. Complex Social Security regulations, rules, and procedures make the application process difficult to navigate on your own, but the knowledge and experience of an SSD lawyer from The Clauson Law Firm, PLLC, can guide you through it.

Our disability lawyers understand the process used by Social Security to determine eligibility for SSI and SSDI, so they focus on gathering the information and supporting evidence needed to support an initial application or to overturn an adverse decision by challenging it through the appeal process. If you have questions about how money in the bank may affect your claim for Social Security disability, ask one of our lawyers during a free consultation.

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Clauson Law has focused on representing the injured and disabled for over 10 years. We have handled thousands of cases. Each client is important to us and has a unique situation.