Special savings accounts that recently debuted may be a boon for families, but experts warn that without careful planning, they could compromise access to disability benefits.
The newly created Trump Accounts, which became available in July, allow families to establish a tax advantaged investment account for their kids.
This month, the U.S. Department of the Treasury said that it automatically signed up every child with a Social Security number for a Trump Account, though there are steps parents must take to claim the accounts in order to allow deposits. Accounts opened and claimed for children born between 2025 and 2028 will automatically be funded with $1,000 from the Treasury Department.
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However, experts are warning that the free money could come with a downside for children with disabilities.
While funds in Trump Accounts will not impact eligibility for Supplemental Security Income for children, they could disqualify individuals with disabilities from accessing such benefits when they reach adulthood.
That’s because the funds will count against the $2,000 asset limit for SSI eligibility for individuals age 18 and older.
“If an SSI beneficiary exceeds the asset test, it’s a big problem because they completely lose eligibility for SSI. Their benefits are suspended, then terminated — often with big overpayments they must repay, creating a whole other set of problems,” said Kathleen Romig, a senior fellow at the Center on Budget and Policy Priorities.
Moreover, since many people with disabilities qualify for Medicaid because they receive SSI, having too much money in a Trump Account could lead to the loss of healthcare and home and community-based services too, Romig said.
Lawmakers did attempt to factor for this concern when Trump Accounts were established. The law allows funds for children with disabilities to be rolled over from a Trump Account to an ABLE account, but only during the year in which the beneficiary is age 17.
ABLE accounts are a special savings vehicle that allow people with disabilities to accrue money without losing out on government benefits.
The National Disability Institute notes that the Social Security Administration “has not yet issued complete guidance” about how SSI will handle money in Trump Accounts once beneficiaries turn 18. But the group said that “families will want to explore rolling eligible funds into an ABLE account during the year the child turns 17.”
The opportunity to transfer money to an ABLE account disappears once a child with disabilities reaches their 18th birthday, the same time that the $2,000 cap for SSI eligibility kicks in.
That short window of opportunity is ripe for trouble, said Darcy Milburn, director of Social Security and healthcare policy at The Arc of the United States.
“I am concerned that if (families) haven’t made these arrangements in the right way, at the right time, money in a Trump Account could impact eligibility for SSI,” she said. “It’s one more thing that families have to manage during the age 18 transition — which is already a disruptive and complicated time in the lives of kids with disabilities and their families.”
Romig with the Center on Budget and Policy Priorities said the conundrum highlights the need for Congress to raise the SSI asset limit and to adjust the law to allow families to transfer Trump Account balances to ABLE accounts at any point.
