If you have an ABLE account, you might be wondering exactly what you can spend those funds on. The good news is that ABLE accounts are designed to be flexible—but understanding what counts as a "qualified disability expense" can help you use your account with confidence and avoid any surprises.
In this article, we'll cover:
- What qualifies as a disability expense under ABLE rules
- Whether rent and housing costs are covered
- How groceries and food purchases work with ABLE accounts
- The difference between qualified and non-qualified withdrawals
- How ABLE spending affects your SSI benefits
- Tips for tracking and documenting your ABLE expenses
What Is a Qualified Disability Expense?
ABLE accounts were created by Congress to help people with disabilities save money without losing their eligibility for benefits like SSI and Medicaid. The funds in your ABLE account can be used for qualified disability expenses (QDEs)—a broad category that includes expenses related to maintaining or improving your health, independence, and quality of life.
The IRS defines qualified disability expenses to include housing, transportation, education, health and wellness, assistive technology, employment training, financial management, legal fees, and basic living expenses. The key is that the expense must relate to your disability in some way, which is interpreted quite broadly.
Can You Use ABLE Funds for Rent?
Yes, you can absolutely use your ABLE account to pay for rent and housing costs. Housing is specifically listed as a qualified disability expense under federal ABLE rules. This includes rent payments, mortgage payments, property taxes, homeowner's or renter's insurance, and utilities like electricity, water, gas, and internet.
However, there's an important consideration for SSI recipients. When you use ABLE funds for housing expenses, it may affect your SSI benefit amount. Under SSI rules, if someone else pays for your food or shelter (or if you use certain funds for these costs), it can be considered in-kind support and maintenance (ISM), which could reduce your SSI payment by up to one-third of the federal benefit rate.
That said, many SSI recipients find that using ABLE funds for housing still makes financial sense, especially if the reduction in SSI is less than the housing benefit they receive. It's worth doing the math for your specific situation.
What About Groceries and Food?
Yes, groceries and food are also qualified disability expenses. Basic living expenses, including food, are covered under ABLE rules. You can use your ABLE debit card at grocery stores, farmers markets, or anywhere you purchase food for yourself.
The same ISM consideration applies here as with housing. If you receive SSI and use ABLE funds for food, Social Security may count this when calculating your benefit. The maximum reduction is about $334 per month in 2025 (one-third of the federal benefit rate plus $20).
For many people, the ability to save more than $2,000 in an ABLE account—up to $100,000 without affecting SSI eligibility—outweighs the potential reduction in monthly benefits. An ABLE account lets you build savings for emergencies, opportunities, and goals that would otherwise be impossible under SSI's strict resource limits.
Qualified vs. Non-Qualified Withdrawals
When you withdraw money from your ABLE account for a qualified disability expense, you won't owe any taxes on the earnings. But if you use ABLE funds for something that doesn't qualify, the earnings portion of that withdrawal becomes taxable income, and you may owe an additional 10% penalty.
The good news is that the definition of qualified expenses is quite broad. Beyond housing and food, you can use ABLE funds for transportation (including buying a car), healthcare costs not covered by insurance, assistive technology, education and job training, personal support services, and even entertainment and recreation if it relates to your disability.
How to Track Your ABLE Expenses
While you don't need to submit receipts to your ABLE program for every purchase, it's smart to keep records in case the IRS ever asks. Here are some simple tracking tips:
Save receipts for larger purchases, especially those over $100. Use your ABLE account's online portal to categorize expenses if that feature is available. Keep a simple log or spreadsheet noting the date, amount, and purpose of withdrawals. Take photos of receipts with your phone so you have digital backups.
You don't need to justify every coffee or grocery trip, but having documentation for significant expenses gives you peace of mind.
Making the Most of Your ABLE Account
ABLE accounts offer a rare opportunity for people with disabilities to save money and maintain some financial flexibility. Using your account for everyday expenses like rent and groceries is completely legitimate—it's exactly what these accounts were designed for.
If you're on SSI, just be aware of how housing and food purchases might affect your benefits, and consider whether using ABLE funds for other qualified expenses (like transportation, healthcare, or technology) might be more advantageous for your situation. Every person's circumstances are different.
Managing your finances while protecting your benefits can feel overwhelming. Purple's checking account is designed specifically for people on SSI and SSDI, with tools to help you track your resources and understand how your spending affects your benefits.