According to the Centers for Disease Control and Prevention, 61 million adults in the United States live with a disability. From those who are paralyzed and blind to those who suffer from mental impairments, disabilities are known to cause serious financial hardship. Social Security Disability Insurance (SSDI) and other programs help the disabled obtain a fixed income to replace lost wages due to unemployment, but it’s not always enough.
Fixed Incomes Explained
Social Security Disability Insurance (SSDI) provides essential benefits to workers who can no longer earn an income due to a serious and long-lasting medical issue.
About 8.5 million adults receive SSDI benefits from Social Security, all of whom meet the following criteria:
- Worked for at least one-fourth of their adult life before becoming disabled
- Suffered a severe, medically determinable physical or mental impairment that will last longer than 12 months or result in death
- Unable to perform any job that generates more than about $1,220 per month (or $2,040 for blind people)
People who qualify for SSDI benefits receive a fixed income that helps them afford the basics: housing, food, and clothes. At the end of 2019, the average SSDI benefit was $1,258 per month, but since SSDI income is based on a person’s average lifetime earnings, benefits fluctuate from recipient to recipient.
Financial Challenges That Come With Disability
People living with disabilities face a number of financial challenges. First and foremost are the obvious costs associated with a disability: medication, medical services, and assistive devices. The costs of coping with and treating a disability often surpass the amount of fixed-income received from SSDI.
Disabled people also face financial challenges that are subtle or hard to quantify. For example, someone in a wheelchair has limited mobility and cannot live or work in areas that aren’t handicap-friendly. This could increase the cost of living, prevent income from lost employment, or both.
ABLE Savings Accounts
ABLE accounts are tax-advantaged savings accounts for individuals with disabilities and their families. They were established by the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014. The ABLE Act marked the first time in public policy that the significant financial challenges of living with a disability were recognized.
Any income earned by an ABLE account is not taxed. Most importantly, funds kept in an ABLE savings account will not affect an individual’s eligibility for SSDI, Medicaid, food stamps, and other essential government benefits that disabled people rely upon for survival.
You may be eligible for an ABLE savings account if the onset of your disability occurred before you turned 26 years of age and you receive benefits under SSI or SSDI. Under current law, ABLE account holders can accept total annual contributions into their ABLE accounts up to $15,000 in a single tax year. The total limit overtime varies by state, from $235,000 to $529,000.
Other Resources For Help
Though living with and affording the costs of a disability can be challenging, there are many financial resources available for disabled people living on a fixed income:
- Apply for federal and state grants
- Take advantage of tax breaks
- Find discounts for disabled people online
- Request disabled discounts from utilities, phone services, and recreational activities
Fortunately, in the 21st century and age of technology, there are many tools and resources available to help people living with disabilities overcome financial challenges.
See Also: 50 Legit Ways to Make Extra Money Online This Month for Beginners
