What Can You Use ABLE Account Funds For?

One of the biggest benefits of an ABLE account is the flexibility in how you can spend the money—without it counting against your benefits.

But there’s one important rule: ABLE funds must be used for qualified disability expenses. So what exactly does that mean?

In this article, we’ll cover:

1. What “qualified disability expenses” really means

2. Examples of allowed spending

3. Expenses that raise red flags

4. How to stay compliant

5. Why it matters for SSI and Medicaid

6. How Purple can help you track everything

1. What Counts as a Qualified Disability Expense?

According to federal guidelines, a qualified disability expense is any expense related to the person’s disability that helps them improve or maintain their health, independence, or quality of life.

It doesn’t have to be medically necessary. It just has to relate to the person’s needs and help them live a fuller life.

2. What You Can Spend ABLE Funds On

Here are common, allowed categories:

• Housing and rent

• Utilities (water, electric, phone, internet)

• Food and groceries

• Transportation (public transit, ride services, car expenses)

• Medical and dental care not covered by insurance

• Therapies (physical, occupational, behavioral)

• Education and job training

• Assistive technology and adaptive equipment

• Personal care services or in-home support

• Legal fees related to disability or benefits

• Recreation and wellness (gym memberships, hobbies)

• Travel (if related to care, education, or quality of life)

You can even use ABLE funds to pay for funeral and burial expenses.

3. What Not to Use ABLE Funds For

The biggest mistake people make is using ABLE funds for non-disability-related expenses. That includes:

• Gambling or lottery tickets

• Gifts to others

• Luxury items with no disability relevance

• Unrelated business or investment ventures

• General expenses for family members

Spending ABLE funds on non-qualified expenses could result in:

• The money being taxed

• A 10% penalty

• Risk to SSI or Medicaid eligibility

4. How to Stay Compliant

To protect yourself (and your benefits):

• Keep records and receipts for every purchase

• Make note of how the item or service helps with the disability

• Keep ABLE funds in a separate account from your everyday spending

• Avoid cash withdrawals unless absolutely necessary

• Review your purchases regularly

The IRS doesn’t require you to submit receipts—but they can audit your ABLE account. And the SSA may request proof during a review.

5. Why It Matters

ABLE accounts let you save money without being punished by the $2,000 SSI asset limit. But that protection only applies when the funds are used appropriately.

Using ABLE funds for qualified disability expenses helps you:

• Maintain your eligibility

• Avoid extra taxes and penalties

• Build financial independence

• Have more choice, freedom, and control

6. How Purple Helps You Track Spending

Purple is designed to make it easier to manage benefit-related funds—especially when you need to stay organized for the SSA or IRS.

With Purple, you can:

• Track each transaction and categorize expenses

• Store receipts and notes directly in the app

• Separate daily spending from savings or backpay

• Export clean records for reviews or audits

• Set spending limits and get alerts if anything looks off

Whether you’re using an ABLE account now or plan to in the future, Purple gives you the tools to stay on track and in control.

👉 Learn more at Purple