Did you know that Washington State has two opportunities for greater financial freedom and a better quality of life without risking eligibility for SSI and other government programs? ABLE and the DD Endowment Trust Fund (ETF) each have several different features, but enrolling in one does not prohibit enrolling in another for those who qualify for both.
Below are some of the highlights of each. Be sure to contact ABLE and ETF for specific answers to your questions.
WHO IS IT FOR?
- A person with a developmental disability, under age 65, who has been determined eligible for state DDA services;
- The condition happened at the age 18 or before; and
- The person lives in the state of Washington at the time of enrollment.
- A Washington resident eligible for SSI benefits or the Social Security Disability, Retirement, and Survivor’s program or who submits certification that meets the criteria for a disability certification;
- The Condition happened before age 26.
WHAT IS IT?
- Special Needs Trust
- Trust 1 Third Party Trust
- Trust 2 Self-Settled Trust
- A savings plan
- A form of 529 Account Tax Favored Qualified ABLE program in IRS code
Are there limits in contributions and spending?
- No limits on contributions.
- No limits on spending, except room and board for those on SSI.
- Does not affect SSI or Medicaid eligibility.
- $15,000 a year.
- $500,000 overall limit.
- Spending is approved for qualified disability related expenses.
- First $ 100,000 does not affect SSI eligibility.
ARE TAXES INVOLVED?
- Earnings from investments are taxed when spent, if the person has taxable income.
- Qualified Disability Trust.
- ABLE accounts are not taxed.
- Taxes and a 10% federal tax penalty for distributions not used for qualified disability expenses.
WHAT OCCURS IF THE BENEFICIARY PASSES AWAY?
- Trust 1 Third Party: no pay back required; Distributed according to Trust document.
- Trust 2 Self-Settled: Medicaid/Medical Assistance Recovery before distribution according to trust documents.
- Medicaid/Medical Assistance Recovery applies, regardless of contributor.
WHAT DOES IT COST?
Enrollment fee of $600; minimum annual management fee $75.00; and a $75 tax prep fee. Fees are offset by a state match.
Annual fee of $35.00; Annual investment fee of 0.30-0.38, depending on the investment portfolio.
For questions regarding Washington ABLE email Peter Tassoni, Disability Workgroup Manager, Department of Commerce, or call (360) 725-3125.
For questions regarding the DD Endowment Trust Fund, contact Tamara Roberts, Trust Manager, or call toll-free 1-(888)754-8798.