Recently the issue of whether or not a College 529 plan would be counted as a resource of the disabled person by Social Security when applying for Supplemental Security Income (SSI) came up in our office.
The answer depends on whether the disabled person applying for SSI is over or under the age 18.
If a disabled person is over age 18, their 529 plans are excluded by the SSI program through several different provisions. First of all, the accounts are held by their parents or other persons who make the contributions. While the student is named as the beneficiary, these accounts are owned by others and thus would not count as a resource to the student. If the student is over the age of 18, the 529 Accounts held by parents or other persons would have no bearing on the student's SSI eligibility.
For any child under the age of 18, who is applying for SSI, his/her parents' income and resources are counted as belonging to that child. Therefore, a 529 Plan Account would be considered a "countable parental resource." If the value of the 529 Account exceeds $3,000 (a couple's resource limit for SSI eligibility), the child would then be ineligible for SSI.
For more information on eligibility for Social Security Disability and SSI benefits, please click here.