SC ABLE Account: Eligibility, Contributions, and Qualified Expenses

The SC ABLE account, officially called the Palmetto ABLE Savings Program, is a tax-advantaged savings and investment account for South Carolina residents whose qualifying disability began before age 46. It lets eligible people save money and earn investment returns without losing Supplemental Security Income, Medicaid, or other means-tested benefits that normally cap personal assets at $2,000.¹ The program is run by the Office of the South Carolina State Treasurer and serves over 4,000 account holders as of early 2026.²

Who Can Open an Account

You qualify if you’re a South Carolina resident with a medically determinable physical or mental impairment that causes marked and severe functional limitations, the condition has lasted or is expected to last at least a year, and it began before you turned 46.³⁴

The age-of-onset threshold used to be 26. The federal ABLE Age Adjustment Act, passed by Congress in December 2022, raised it to 46 effective January 1, 2026. That change opens the program to South Carolinians who experienced traumatic brain or spinal cord injuries later in life, developed PTSD, or were diagnosed with conditions like lupus or multiple sclerosis after age 26.⁵ State Treasurer Curtis Loftis has specifically encouraged veterans to check the new rules, since many who were previously shut out now qualify.²

You don’t have to open the account yourself. If managing it isn’t practical, an Authorized Legal Representative can do it on your behalf. That role can be filled by someone holding power of attorney, a legal guardian, a conservator, a spouse, a parent, a sibling, a grandparent, or a representative payee.³

How It Protects SSI and Medicaid Eligibility

SSI and Medicaid generally cap a recipient’s countable personal assets at $2,000, and crossing that line can mean losing benefits.¹ An ABLE account sits outside that limit.

For Medicaid, state agencies must disregard the entire balance of an ABLE account when determining eligibility, no matter how large it grows.⁶⁷

How Much You Can Put In

The standard annual contribution limit is $20,000.³ If you’re working and don’t participate in a defined contribution retirement plan, you can contribute additional earned income above that cap, up to the lesser of your annual compensation or the prior year’s federal poverty level for a one-person household. For 2026, that additional allowance is up to $15,650.⁸ The account’s lifetime cap in South Carolina is $570,000.⁵

Contributions aren’t limited to the beneficiary. Family, friends, and employers can all put money in, and all contributions count against the same annual limit.

Tax Benefits

Contributions are 100 percent deductible on your South Carolina state income tax return. Investment earnings grow tax-free at both the federal and state level, and withdrawals used for qualified disability expenses are not taxed.⁹

What You Can Spend the Money On

Withdrawals are tax-free, and don’t affect benefits, when you spend them on “qualified disability expenses.” The law defines that category broadly: any expense related to the beneficiary’s disability that helps maintain or improve health, independence, or quality of life. Covered spending includes:

Housing, including rent, mortgage payments, utilities, and property taxes
Education, including tuition, books, and related costs
Transportation, including vehicle expenses, public transit, and car repairs
Health and wellness, including medical, dental, mental health, and prevention and wellness programs
Employment supports, including job training and coaching
Assistive technology, mobility equipment, and personal support services
Basic living expenses such as food, clothing, and groceries
Legal fees, financial management, account oversight, and funeral and burial costs

An expense doesn’t have to be uniquely disability-related as long as it fits one of these categories. Pay for qualified expenses directly from the account where you can, and keep receipts for at least three tax years in case of verification.¹⁰

Non-qualified withdrawals carry a cost. The earnings portion is subject to federal income tax plus a 10 percent penalty. For SSI, money from a non-qualified withdrawal that isn’t spent in the same month it’s received counts as a resource and can push you over the SSI limit.⁷

Opening and Funding Your Account

Enrollment is online and takes about ten minutes through the STABLE Account platform, powered by Vestwell. You’ll provide information about the beneficiary, the qualifying disability, and your funding method. A physician’s diagnosis isn’t required at signup, but you need to keep documentation of eligibility on hand in case it’s requested later.⁴¹¹

The minimum initial deposit is $25, and new accounts receive a $25 matching grant from the STABLE Account program once enrollment and that first deposit are complete.⁸ After that, additional contributions can be as small as $1. You can fund the account through one-time or recurring bank transfers, payroll direct deposit, Social Security direct deposit, or gifts.¹¹

Investment Choices

You pick from five portfolios managed by Vanguard: Growth, Moderate Growth, Conservative Growth, Income, and the FDIC-insured STABLE Savings Option, which is insured up to $250,000 through Bank of New York Mellon.⁸¹¹

Fees

Annual maintenance fee: $0 for South Carolina residents
Asset-based investment fees: 0.19% to 0.33%, depending on portfolio
Paper statement fee: $20 per year (electronic statements are free)
Failed transaction fee: $25 for bounced checks or failed transfers

¹²

STABLE Visa Prepaid Card

You can request a STABLE Visa Prepaid Card to spend ABLE funds anywhere Visa is accepted. You load a specific amount from your investment account onto the card, up to a $20,000 load limit, and the card works like a debit card drawing on that balance. There are no overdraft fees; transactions are declined if the balance is too low. The card portal lets you flag each transaction as qualified or non-qualified and upload receipts. Authorized Legal Representatives can order separate cards with their own balances and spending controls. The card costs South Carolina residents $5 a month once it’s activated, deducted from the card balance.¹³

Rolling Over a 529 Plan

Families with an existing 529 college savings plan can roll funds into an ABLE account without taxes or penalties. The rollover counts against the annual contribution limit, so the most you can transfer in a given year is $20,000 minus any other contributions already made that year. The transfer can go to the 529 beneficiary’s own ABLE account or to one belonging to a qualifying family member, including parents, siblings, children, first cousins, nieces, and nephews.¹⁴

What Happens to the Account When the Beneficiary Dies

An ABLE account doesn’t simply pass to heirs. After the beneficiary dies, the program first pays any outstanding qualified disability expenses, including funeral and burial costs. The account is then frozen and the South Carolina Medicaid agency is notified.¹⁵

If the beneficiary received Medicaid, the state may file a claim against the remaining balance for the total amount of medical assistance paid on their behalf after the ABLE account was opened. Any premiums the beneficiary paid into a Medicaid Buy-In program are subtracted first.¹⁵¹⁶ Some states have passed laws exempting ABLE accounts from Medicaid recovery; South Carolina has not.¹⁷ Anything left after the Medicaid claim is paid according to the beneficiary’s will, or passes through the standard South Carolina probate process if there isn’t one.

1
WLTX. ABLE Age Adjustment Act 2026
2
SC State Treasurer. Treasurer Loftis Highlights Expanded Palmetto ABLE Account Eligibility at Disability Advocacy Day
3
Palmetto ABLE. Palmetto ABLE Savings Program
4
Palmetto ABLE. Age Adjustment
5
SC Daily Gazette. More South Carolinians With Disabilities Qualify for a Savings Program Providing a Better Life
6
Medicaid.gov. SMD 17-002
7
SSA. Spotlight on ABLE Accounts
8
ABLE National Resource Center. South Carolina
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Palmetto ABLE. What Kind of Benefits Do I Get
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ABLE National Resource Center. Determining Whether Something Is a Qualified Disability Expense
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Palmetto ABLE. Investments
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Palmetto ABLE. What Are the Fees
13
STABLE Account. Prepaid Card
14
Palmetto ABLE. Can I Roll Over a 529 College Savings Plan Into My STABLE Account
15
Palmetto ABLE. What Happens After the Death of a Beneficiary
16
SC Developmental Disabilities Council. Basics of ABLE
17
Justia. SC Code Section 43-7-460