People who live with disabilities often have less income and fewer assets than the rest of the population. If you depend on public benefit programs, it can be hard to think about saving money for the future. If you live only on the money you get from Supplemental Security Income (SSI) you will be living below the poverty level. Many programs have asset limits that make it hard to save money.

It can seem like public benefit programs are a trap; they don’t give you enough money to cover all your expenses and they restrict your options for building assets and making more money. And, if you want to make a change in your life, it can be hard to know and follow all the rules that you need to in order to keep your benefits.

Assets are an important part of becoming financially secure and more independent. With assets you will be able to cope with unexpected expenses that may come up in your life. You can also build assets to achieve a particular goal, like a really fun vacation or a computer or even owning your own home. Even if you face obstacles that make it hard to save money, building assets should be a priority. If you don’t have assets, it is much harder to become economically secure.

Assets give you an economic cushion and open the door to more opportunities. Careful planning can make it possible to build wealth, buy a home, or start a business, while still having enough money to live on. The economic stability that comes with assets can help you meet your goals, let you work toward freedom from dependence on benefits, and increase your wealth.

Financial Literacy

Developing a general understanding of finances — called “financial literacy” is important for everyone. Financial literacy includes skills such as budgeting and long-term financial planning. Financial literacy is especially important if you have to follow the low-income and asset rules of public benefit programs.

Learning about finances can help you do big things like pay for college, buy a house, or plan for old age. It can also help you stay away from scams and prepare for unexpected expenses and difficult life events.

There are several reasons financial literacy is especially important for people with disabilities:

• People with disabilities often have higher out-of-pocket costs for everyday activities.
• People with disabilities may have high medical costs. In fact, medical debt is a major cause of bankruptcy for all people.
• Relying on public benefit programs is hard. There are a lot of rules and restrictions about money and assets that most nondisabled people don’t ever have to think about.

For general information about financial literacy, with tips and tricks on how to save, have a look at Money Management International.

If you have a disability that meets Social Security’s standards (there are separate disability standards for children or youth, for adults, and for blindness) and your disability began before you turned 26, you can open an ABLE account. An ABLE account is a financial account that can help you:

• Build assets in an account that has tax advantages. Your investments in an ABLE account won’t be taxed, so your wealth will grow faster. Plus, If you work and save earned income in your ABLE account, you may qualify for the federal Saver’s Credit.
• Use your savings on many types of expenses. There are rules about spending the money in your ABLE account, but there’s also a lot of flexibility.
• Save up money without losing benefits. Many benefits programs have resource limits, but:
  • You can have up to $100,000 in your ABLE account and keep getting Supplemental Security Income (SSI) benefits, as long as you meet all other SSI rules. If you go over $100,000, SSI benefits will stop, but they will start up again if your ABLE account drops back below $100,000 and you won't have to reapply.
  • For Nutrition Assistance, the money in your account will not affect your benefits, no matter how much you have.
  • The money in your ABLE account may not be counted for some other benefits. Check with program representatives to make sure.

The bottom line: An ABLE account means that you can save up money without losing your benefits. It also lets family and friends give you money without affecting your benefits.

Note: After you die, money in your ABLE account may be used to pay back the AHCCCS program. Look into third-party Special Needs Trusts if this is an issue for your family.

Opening an ABLE Account

There are a few main rules for opening an ABLE account:

• You can only open an account through a state-designated program or institution.
  • Arizona's ABLE account program is AZ ABLE, which is only open to Arizona residents.
  • You can choose to open an account in another state’s ABLE program.
• You can only open one ABLE account. (You cannot open accounts in more than one state.)
• You must have a disability that qualifies for an ABLE account and that began before you turned 26.
  • You can be more than 26 years old when you open your account – all that matters is when your disability began.

You can only have an account if you have a disability. However, another person, such as a parent or guardian, can help manage the account.

Comparing State ABLE Programs

Some states offer ABLE accounts and others don’t. Arizona's ABLE account program is AZ ABLE, which is only open to Arizona residents. Even if your state has an ABLE program, you should compare different state ABLE account programs to see which state’s program is best for you.

When you compare ABLE programs, think about these questions:

• How easy is it to put money in the account and take money out for qualifying expenses? For example, does it come with a debit card?
• How good is customer support? Try calling the program to see whether it seems helpful.
• What investments does it offer? Each state program offers different investment options. Choose a program that offers investments matching your needs.
• What fees does the program charge? There may be fees for opening the account and for keeping money in it.
• Does the program offer any extra benefits for people living in your state? For example, some state programs offer extra tax benefits for residents of that state.

Note: You can switch your ABLE account from one state program to another. You do not have to stick with the state program you choose.

Compare the ABLE account options in different states.

Rules on Depositing Money in an ABLE Account

There are two limits on how much can be put in an ABLE account in a calendar year:

• Up to $19,000 from any source (including your family and friends, your benefits, and other unearned income)
• Another $15,060 from your own earned income (if you have a job).
  • Note: If you or your employer make contributions to a retirement plan set up by your employer, you might not qualify for the extra ABLE contribution amount based on having a job (you can still make regular ABLE contributions). If you aren't sure about this, ask your ABLE account program or check with a tax expert. Get more information about this rule from the ABLE National Resource Center.

Note: This means that if you earn $15,060 or more, you could have a total of up to $34,060 go into your ABLE account in a year. If you earn less than $15,060, the amount you could contribute would be lower.

Important: You need to keep good records, to make sure that too much money isn’t put into your account.

State ABLE programs also have limits on the total amount in your account — typically $200,000 to $500,000, depending on the state. For example, a state program might say that if you have $400,000 in your ABLE account, you cannot deposit any more money.

Rules on Spending Money in an ABLE Account

The money in an ABLE account has to be used for certain qualifying expenses, like:

• Daily living expenses
• Education
• Housing
• Transportation
• Help getting and keeping work
• Health care
• Assistive technology
• Legal fees
• Financial management fees, and
• Other approved expenses.

Many expenses qualify. For example, your rent, electric bill, and furniture are housing expenses. Gasoline and car repairs are transportation expenses. Health insurance premiums and copayments count as health care. Lunch at a restaurant, toothpaste, and toilet paper are daily living expenses.

Keep receipts whenever you use your ABLE account to pay for a qualifying expense. If you are audited by the IRS, you’ll need to show them how you’ve used your money. You can put all of the receipts into a binder or scan them and save them on your computer.

How Spending Works

An ABLE program may offer a debit card that is linked to the account. If so, you can use the debit card whenever you pay for a qualifying expense. For things like rent, you may need to write checks or withdraw cash from the account instead. You don't need authorization to spend your money: it's your job to make sure your expense qualifies and to keep records of how use your ABLE account.

If you withdraw cash from an ABLE account, spend it on your qualifying expense. Don’t just hold onto the money or put it in a normal bank account – if you don’t spend the money, it could be counted as a resource for benefits programs. For example, if you take $3,500 out of an ABLE account and put it into a regular checking account instead of spending it, you will go over the resource limit for SSI.

As long as the money stays in the ABLE account, it won’t affect your benefits, so leave your money there until you need to spend it.

Learn more about ABLE accounts.

An Individual Development Account (IDA) is a certain kind of matched savings account that you may open once you are a part of a program designed to improve your in financial literacy. You choose an approved goal to save for and use the IDA to save money towards meeting that goal. IDA goals are usually buying a first home, education or training costs, or funding a small business. Generally, an IDA can be open for up to 3 years though it will depend on the particular program.

The money you put into the account will be matched by other sources. The match may be anywhere from 1 to 4 times the amount of the deposit you make. For example, if you’re enrolled in an IDA program with a 2:1 match and you deposit $50 into your account, the program will add an additional $100 towards your savings goal, so that your total savings for that month will be $150. This means that you will be able to reach your financial goal much more easily and quickly than you could otherwise.

Note: There aren't as many IDA programs as there used to be. Some are still active, but it can take a bit of effort to find one that is accepting applications.

Generally, to qualify for an IDA:

• Your annual income must be within 200% of the Federal Poverty Guidelines ($31,300 per year for individuals), and
• You must have some form of earned income.

As part of the program, you also need to take financial education classes.

To find an IDA program near you, you can use the Assets for Independence Resource Center website or the Prosperity Now IDA Directory.

Funding Sources

Funding for IDAs comes from a variety of places, including government agencies, private companies, nonprofits, and individual people. Sometimes whether or not the IDA counts as an asset depends on the funding source and what sort of benefits you are getting.

If you are getting Supplemental Security Income (SSI) and you plan to enroll in an IDA, be sure to talk to a Work Incentive Consultant about the details.

Program Eligibility

Each IDA program is different and eligibility requirements may vary from program to program. Most require that:

• Your annual income is within 200% of the Federal Poverty Guidelines ($31,300 per year for an individual, $42,300 for a couple), and
• You have earned income.

For an IDA, you must have income from work. It doesn’t matter if you’re working full-time or part-time, but you must be earning income from some sort of job. The details of the earned income requirements vary depending on the IDA. Be sure to talk to you Work Incentive Consultant about the details

IDA programs funded by the federal government may check on your citizenship or legal residency status when you apply. IDA programs funded by other sources may or may not do this. Be sure to ask about specific citizenship requirements when looking at IDA programs.

Financial Literacy Training

Once you’re enrolled in an IDA program you must take their free financial literacy training. Financial literacy programs improve your ability to manage your personal finances, save more money, and plan financially.

This training usually covers topics like:

• Money
• Debt reduction
• Developing a savings plan
• Credit
• Investing

IDA Savings Limit

Most IDA programs only let you save a limited amount of money in your account, usually $4,000 to $6,000. This includes the money you deposit, as well as the matching funds. Once you reach the limit, you won’t be allowed to deposit any more money into the account. IDA programs also have a limit on how long you can save, usually up to 3 years.

How to Apply

If you are interested in starting an IDA, contact an IDA program in your area. Ask if they are accepting applications. Some programs may have waiting lists. Even if they do, you may be able to start by taking financial literacy training while waiting for a space to open up.

For Arizona residents, a good place to find your local program is the IDA Resources website or the Prosperity Now IDA Directory.

Once you find an IDA program that fits your needs, you should go to an orientation meeting to learn more about it.

You will also need to provide information to prove your eligibility for the program. If you get into the program, you will have an IDA caseworker who will help with your account. You’ll open a savings account with a bank or credit union that is connected to your IDA program. Depending on the program, you may need to deposit a certain amount into your account each month.

Once you’ve reached your savings goal and completed the financial education classes, you can take money out of the account to spend on your goal.

Integration with Other Benefits Programs

IDAs and Supplemental Security Income (SSI)

Because SSI has income and asset limits, working and saving money in an IDA could risk your eligibility. Be sure to talk to your Work Incentive Consultant about the details.

IDAs and Plans to Achieve Self-Support (PASS)

A Plan to Achieve Self-Support (PASS) is an SSI program that lets you set aside money for a specified work goal, such as:

• Starting a new career
• Going back to school

The money you set aside in a PASS does not count against SSI's income and resource limits. This means you can save money towards a career goal in a PASS and continue to use SSI benefits for basics like food and rent.

An IDA can be a part of your PASS plan; the only requirement is that your goal for each program be the same.

As long as the money you save in your IDA is part of a PASS plan, it will not be counted by SSI and won’t jeopardize those benefits.

IDAs and Social Security Disability Insurance (SSDI)

People on SSDI may enroll in any IDA program for which they are eligible. There are no restrictions.

IDAs and the Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is a federal tax program that lowers the amount of income tax owed by low to moderate-income workers and families. Money you get from an EITC can be put into an IDA and matched, helping you to reach your savings goal faster.

Plan to Achieve Self-Support (PASS)

Social Security’s PASS program lets you save money you get from sources such as work or Social Security Disability Insurance (SSDI) without lowering your Supplemental Security Income (SSI) monthly cash benefits. Usually, if you have other income, your SSI benefit goes down, but with a PASS, you can have more income, not have your SSI go down, and be able to save up more money than SSI's resource limit usually allows.

If you are on SSI or SSDI, you probably have to spend a lot of your monthly income on basic expenses like food and housing. This can make it hard to save for things like job training or school. The PASS program helps make saving easier. It lets you save money for a work-related goal that will help you achieve self-sufficiency. It is easy to use because it protects your income while you save.

You can use a PASS to:

• Help pay for the cost of school or training
• Start a business
• Pay for equipment, support services, and other expenses related to your goal

One of the things that make PASS unique is that it is completely consumer-driven. The PASS plan is about your work goal, what you want to achieve, and what you need to get there.

After you write your PASS, you ask Social Security to approve it. Your plan has to have a realistic goal given your abilities, experience, and educational background.

Income Sources for Funding a PASS

Once you have an approved PASS plan, you will put money into your PASS account to pay for each step along the way to reaching your goal.

You cannot put any money you get from SSI in your PASS account. You must use money from some other source such as income from a job, money from a spouse or parent, or money from your SSDI check.

Applying to the PASS Program

There is a detailed description of how to set up a PASS in the DB101 PASS section. You have to fill out Social Security’s PASS application form. On the application you will describe your goals for work and how you plan to achieve them.

This description should be detailed enough to convince Social Security that:

• You have a clear plan
• The plan is something you can realistically do, and
• If you completed the plan your need for SSI or SSDI would be lowered or eliminated.

Creating a PASS requires that you have a work goal and an explanation of how you will be able to accomplish this goal. If you currently do not have a clear work goal or a clear way to achieve it, you may consider working with an organization like the Arizona Rehabilitation Services office or an Employment Network through the Arizona Ticket to Work program.

Application Assistance

Creating your plan and filling out a PASS application can seem intimidating, but you can get help with every step of the process by talking with someone from a PASS Cadre. A PASS Cadre is a professional who knows about the program and is available to help you take advantage of it. Work Incentive Consultants can also assist you with your PASS application or help you submit the correct records to your PASS Cadre. Here’s the contact information:

• You can find a PASS specialist through the Phoenix PASS Cadre (which covers all of Arizona) at 1-866-331-4359 ext 12887.
• Arizona Benefits 2 Work is managed by the Ability360. You can find Work Incentive Consultant information on their website or call them at 602-443-0720, toll free at 866-304-WORK (9675).

Using a PASS

After your plan is approved, Social Security will send you detailed instructions about how to use your PASS. The instructions are mostly about keeping PASS funds and expenses separate from your other money and keeping good records. You have to follow the rules carefully. To learn more, see the DB101 Plan to Achieve Self-Support (PASS) article.

If a medical situation or some other issue comes up that impacts your ability to continue your PASS, talk to your PASS Cadre about your options. In many cases, you will be allowed to put your PASS on hold for up to 12 months without having to re-apply.

Family Self-Sufficiency (FSS) Program

The Section 8 Housing Choice Voucher Program helps people with low income have affordable housing. It is funded by the federal government and run by local public housing authorities (PHAs).

A family that gets Section 8 benefits pays 30% of the family income for rent. The Section 8 program pays for the rest of the rent. After a family's income goes up, the amount the family has to contribute to rent also goes up, because 30% of their income is more than it used to be. When the family contributes more for rent, the Section 8 program contributes less.

Section 8's Family Self-Sufficiency (FSS) program helps families whose income goes up. When the family income goes up and the Section 8 program starts paying less for rent, the Section 8 program takes the money that it saves on rent and sets it aside for the family. The family can use these savings for purchases, such as the down payment on a home or a car.

Learn more about the FSS. Find public housing authorities near you.

Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is designed to help people with low income by lowering the amount of federal income tax they owe. Even if you don’t earn enough money to owe federal income taxes, you may be able to get an EITC.

Eligibility

To qualify, you must have income from employment, self-employment, or employer-paid disability benefits that is below certain limits and you must file your federal taxes.

The amount you get from your EITC depends on your Adjusted Gross Income (AGI), whether you are married, and the number of children you have. For 2025 (filing taxes by April 2026), the EITC ranges from $2 to $8,046.

Earned Income

To qualify for an EITC, you must have earned income. This can include your wages, salaries, tips, net earnings from self-employment, or any other form of taxable pay. You can also elect to include nontaxable combat pay as earned income.

The EITC program considers employer-paid disability payments that you get before retirement earned income. But benefits payments from a policy you paid the premiums for, or that you got after retirement, would not be considered earned income.

Other things that do not qualify as earned income under the EITC include:

• Interest and dividends
• Social Security and railroad retirement benefits
• Pensions and annuities
• Alimony and child support
• Workers’ compensation benefits
• Unemployment compensation
• Welfare benefits
• Veterans benefits

If you are married and filing jointly, at least one spouse must have earned income to be eligible for an EITC.

Adjusted Gross Income and Qualifying Children

In addition to the earned income requirement, you must have an adjusted gross income (AGI) below certain levels to qualify for an EITC.

Your adjusted gross income (AGI) includes all earned income before deductions for taxes, health care or other expenses, minus certain business, education-related, and other expenses. While filling out your annual tax return (IRS Form 1040), you will be asked a series of questions that will let you figure out what your AGI is.

For a child to be considered a qualifying child under EITC, several requirements must be met:

• Relationship: If you are claiming one or more child, they must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these (for example, your grandchild, niece, or nephew)
• Residence: The child must live at the same residence as you for more than half the year and have a valid Social Security number
• Age: At the end of the tax year, the child must be under 19. Or, if going to school full-time, the child must be under 24. The only exception is for people who are permanently and totally disabled. If your child is permanently and totally disabled, there is no age requirement

According to the IRS, a person is considered “permanently and totally disabled” if their condition is expected to last continuously for at least one year or is expected to result in death, and if they cannot perform any Substantial Gainful Activity (SGA). For 2025, this means they have to be unable to earn more than $1,620 per month ($2,700 if they are blind).

Note: Qualifying children can only be used by one family member to claim an EITC.

How to Get an EITC

If you qualify, you will claim your Earned Income Tax Credit when you file your federal tax return. To calculate the value of your EITC, you can use the Earned Income Credit Worksheet in your IRS Form 1040 instruction booklet. If you have a qualifying child, be sure to attach a Schedule EIC. You can ask the IRS to calculate your tax credit for you by noting an “EIC” on the Earned Income Credit line on your tax return.

To see if you qualify for an EITC, and how much it might be, use the IRS EITC Assistant.

Tax Preparation Tips for Claiming the EITC

Keep all your W-2's and keep a record of who you have worked for during the year. This will make things simpler when it comes time to file your taxes.

If you are on a limited income, do not pay someone to do your taxes. Use a Volunteer Income Tax Assistance (VITA) Center to file. Most centers can e-file your return for free. If you are self-employed, have all your receipts and a log of expenses ready for the tax preparer. To find a local VITA Center, check 2-1-1 Arizona or the IRS VITA Site List for Arizona.

Be sure to file your taxes, even if your income is lower than the amount at which you are legally required to file. You might be eligible for an EITC or some other tax credit that you can’t get without filing. Many families with children who qualify for an EITC may also be eligible for a Child Tax Credit (CTC).

The following is a summary of the EITC requirements:

Interaction with Other Disability Benefits Programs

Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI)

You must have some form of earned income to qualify for an EITC. Social Security benefits do not count as earned income under the program. You can, however, be on SSI or SSDI and claim an EITC, as long as you have some form of earned income.

If you're on SSI, you should spend any money you receive from an EITC within 12 months. If you save the money longer than that, Social Security will count that money toward SSI's resource limit.

Individual Development Accounts (IDAs)

Money from an EITC can be put into an Individual Development Account. This lets you get matching funds from the IDA program sponsor.

Plans to Achieve Self-Support (PASS)

Money from an EITC can be set aside in a PASS. This will let you reach your employment goals more quickly, by saving money without affecting the way your income is counted.

Long-Term Disability Insurance

Employer-paid long-term disability insurance benefits that you got before retirement count as earned income under EITC and can therefore be used to qualify for the program. Disability insurance benefits which you pay the premiums for, or that you get after retirement, are not considered earned income and can’t be used to qualify for an EITC.

Child Tax Credit (CTC)

The Child Tax Credit (CTC) is available to parents with children under age 17. The CTC gives these parents up to a $2,000 tax credit for each child in the family under 17. Eligible families must be working and earning at least $2,500 a year.

Note that if you're on SSI and receive money from a CTC, you should spend it within 12 months. After 12 months, Social Security will count that money toward SSI's resource limit. If you have any questions about this, contact the Ability360. You can find the local information for ABIL on their website.

Other Programs

If you or your spouse is a U.S. citizen who received taxable disability income and was permanently and totally disabled during this tax year, you may be eligible for the Credit for the Elderly or the Disabled.

A guide to other employment supports for people on SSI is available here. You can also contact Ability360 with questions. You can find the local information for ABIL on their website.

Volunteer Income Tax Assistance Program (VITA)

The IRS Volunteer Income Tax Assistance program (VITA) offers free tax help for taxpayers who qualify.

The VITA program offers free tax help to low- to-moderate income (generally $49,000 and below) people who can’t prepare their own tax returns. Certified volunteers are available to help prepare your taxes and they will make sure you get special credits, such as Earned Income Tax Credit, Child Tax Credit, and Credit for the Elderly or the Disabled. In addition to free tax return preparation assistance, most sites also offer free electronic filing (e-filing).

VITA sites are generally located at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations. To find a local VITA Center, check 2-1-1 Arizona or the IRS VITA Site List for Arizona.

A trust is a legal arrangement in which a person or organization (like a bank) manages assets for someone else. The person receiving payments from the assets is called the “beneficiary” and the person who is managing the assets is the “trustee.” Many kinds of assets can be put into a trust, such as cash, stocks, bonds, and real estate.

Many different kinds of trusts can be set up to hold the assets of a person with disabilities so that they can receive public benefits such as:

• Supplemental Security Income (SSI)
• Arizona Health Care Cost Containment System (AHCCCS)
• HUD housing assistance

It is important that either you or the person setting up the trust for you do so correctly. Depending on how the trust is set up, assets in it won’t be counted toward the SSI asset limit.

While public benefits such as SSI, AHCCCS, and HUD housing assistance provide basic support for food, shelter, and medical care, a trust can be used to add support and services in the ways most helpful to you. For example, money from the trust could be used to pay for your recreation, telephone bill, education, and vacations.

Although trusts can have huge advantages, they also have strict rules. The funds must be used to benefit only you; no one else can benefit from that trust. Also, the trust is set up to help you, but payments should not be made directly to you. Payments made directly to you count as income and may affect your benefits. When you need to pay a provider for something that is not food or shelter, the trustee will pay the money from the trust directly to the provider. Only the trustee can handle the money from the trust.

Special Treatment Trusts

In Arizona, there is no limit on your assets when you apply for state medical benefits through AHCCCS. That includes AHCCCS Freedom to Work. However, if you may need long-term care in the future, the Arizona Long Term Care System (ALTCS) program does have an asset limit. So you will want to set up any trust with that in mind. There are three kinds of trusts you can use to manage your assets so that you can be eligible for ALTCS. These trusts are called Special Treatment Trusts.

The most important things to keep in mind when setting up a Special Treatment Trust are the following:

• The trust must be made up of your own income or resources.
• The trust must be created on or after August 11, 1993.
• You must be named as the beneficiary of the trust.
• AHCCCS must be named as the Remainder Beneficiary. That means that when you die or the trust is closed, any remaining assets in the trust will first go to pay AHCCCS back for the cost of your long-term care services. AHCCCS won’t take back more money than you spent while on the program. Any remaining assets will go to your other beneficiaries.
• The payments out of the trust must be made in accordance with Arizona law.

Here are a few things that would be a qualifying payment out of a trust under Arizona law:

• Living expenses for food, clothing, and shelter
• Payment for long-term health care services
• Legal expenses
• Health care premiums
• Education or vocational programs

The basics of each kind of trust is discussed here, but if you have any questions, you should seek professional advice. You can find additional resources or an attorney in your area at the Special Needs Alliance.

Income-Only Trusts

An Income-Only Trust, also called a stream-of-income trust or a Miller trust, holds only your monthly income, such as from a pension or Social Security benefits. You can’t include any resources like real estate. You should only consider this kind of trust when your income is more than $2,901 per month.

An Income-Only Trust can be set up by:

• You
• Your spouse
• The court

The primary use of this kind of trust is if you want to manage your income to maintain your eligibility for the Arizona Long Term Care System (ALTCS). For more information about ALTCS, click here.

Disabled Individual Under Age 65 Trusts

A Disabled Individual Under Age 65 Trust, also called a First Party Special Treatment Trust, is used if you have accumulated many assets, inherited assets, or received assets from a court settlement.

It used to be that people with disabilities were not allowed to set up their own Disabled Individual Under Age 65 Trust, even though it was their own money. A parent, grandparent, guardian, or court had to set up the trust, the trustee controlled the funds, and you could not be your own trustee. The laws changed in 2016, and this type of trust can now be set up by you, or by your parent, grandparent, legal guardian, or the court.

To qualify, you must be under 65 years old and must have a disability as determined by:

• The Disability Determination Services Administration (DDSA);
• A Medical Eligibility Specialist during your pre-admission screening; or,
• A diagnosis of Serious Mental Illness (SMI) from the Arizona Department of Health Services.

Pooled Special Treatment Trust

This type of trust will “pool” assets from different members and put them into a large investment fund. Although the funds are pooled (used together), you still have your own separate account. Pooled Trusts offer both First Party accounts (funded with only your own money) and Third Party accounts (funded only with money from other people). All beneficiaries of a Pooled Trust must have a disability as determined by:

• The Disability Determination Services Administration (DDSA);
• A Medical Eligibility Specialist during your pre-admission screening; or,
• A diagnosis of Serious Mental Illness (SMI) from the Arizona Department of Health Services.

This type of trust must be set up through a nonprofit organization. The nonprofit organization will administer the Pooled Trust, take care of all the tax preparation, make investment decisions, and act as the trustee.

Before the Pooled Trust is set up, you and/or your family members must explain what you want the trust to pay for, and who should be consulted about these matters.

Who can set up a Pooled Special Treatment Trust?

• You
• Your parent
• Your grandparent
• Your legal guardian
• The court

Non-Special Treatment Trusts

In Arizona, you can also set up a Non-Special Treatment Trust, which has fewer rules than Special Treatment Trusts. One particular kind of Non-Special Treatment Trust is a Third Party Trust.

Third Party Trusts

Parents usually set up and provide the money for Third Party Trusts to provide for the future needs of a disabled child. These trusts are often created through their will, and sometimes by purchasing life insurance payable to the trust. Other family members can also put money in this type of trust, such as grandparents, aunts, and uncles. The only person who cannot place money into this type of trust is you, the person with a disability.

Some parents place their property in a "living" trust and state in that trust that a separate trust will be created for their disabled child upon their death. This type of trust is often effective immediately. Anyone can give money to the trust by either writing a check or writing a will naming the trust as the beneficiary.

The key to a Third Party trust is that the money should not be used for housing. Housing is considered a basic need under Social Security laws. If you are receiving free housing from someone else, including a family member or a trust, then there will be a penalty and your public benefits will be reduced or stopped. This is why you don’t want to use assets from the trust for housing.

Trusts are a complicated but important issue. If you have questions about trusts you can find additional resources or an attorney in your area at the Special Needs Alliance.

For information about Special Treatment Trusts and SSI eligibility, you can read the SSI Spotlight on Trusts. If you have questions, contact the Ability360. You can find the local information for ABIL on their website.