Saving Money and Benefits Considerations

Instead of getting a business loan or asking others for money, you can save up money to start your business. You may worry that if you save up too much money, you will lose your cash or health benefits. However, there are ways to save money for your business and keep your benefits.

Programs for Saving Money

The most common cash benefits that people with disabilities get are Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). There is no resource limit for SSDI, so saving up money to start your business will not make your SSDI benefits go down.

SSI does have a resource limit of $2,000 ($3,000 for a married couple). However, there are Social Security programs that let you save more money than this resource limit and still keep your SSI benefits, if you use your saved money for work. They are:

• The Plan to Achieve Self-Support (PASS) program
• Property Essential to Self-Support (PESS)

Note: These options are not very well known, and sometimes even Social Security employees don’t know about them. If you are getting benefits, you have to tell your local Social Security office how you wish to use these work incentives to start your business.

Plans to Achieve Self-Support

The Plan to Achieve Self-Support (PASS) program lets people who get SSI benefits save their money in a special account that isn't counted by Social Security when calculating your benefits. The money in your PASS account must be used for a work-related goal. If you're starting a small business, your money can be used for any expenses related to starting up your business or improving your business once you have it going.

The PASS program has two main advantages:

• You can save up resources without losing your SSI benefits.
• If you have income, you can put it into the PASS and it won’t be counted by Social Security, which means your SSI benefits will go up.

To set up a PASS, you must get SSI benefits or become eligible for SSI benefits due to an approved PASS application. (If you don't qualify for SSI benefits because your income is too high, you can use a PASS to lower your countable income and then qualify for SSI.) To apply for a PASS, you'll have to show how saving a certain amount of money will let you reach your work goal (such as starting your small business). When you apply for a self-employment PASS, you'll also have to submit your business plan.

Learn more in DB101’s PASS article.

Property Essential to Self-Support (PESS)

Property Essential to Self-Support (PESS) is anything that you own and need to support yourself. Social Security does not count these things as resources when figuring out if you are eligible for SSI benefits.

If you have your own business, all business assets, including inventory, equipment, and cash held in a business account, are excluded when Social Security counts your resources.

If you have a separate bank account for your business, only business income and business expenses can be run through this account. If you do not keep your personal money separate from your business account, you could lose your SSI benefits. You'll have to give your Social Security representative a signed statement that the money in your business account is only used for your business.

Note: If you work for someone else or for a company, all personal property that you use for work (for example, your tools or equipment) is also counted as PESS.

Health Coverage

You may be worried that if you save money for your business, you'll lose your health coverage, like Medicaid or Medicare. However, saving up money should not make you lose your health benefits for the following reasons:

• If you get SSI benefits, you automatically get Medicaid. If you use the strategies above to keep your SSI benefits, you will also keep getting Medicaid.
• If you get Medicare because of your SSDI benefits, saving up money will not make you lose your SSDI or your Medicare coverage, because SSDI does not have a resource limit. And even if you do lose your SSDI benefits (for example, if your income goes up), your Medicare coverage will continue for many years.
• If your income is high enough that you cannot get Medicaid anymore, you may qualify for subsidies to get coverage on Georgia Access.