Trump Accounts: The Unexpected Threat to Disability Benefits You Need to Know About

The Trump Accounts program intended to help children build wealth could unintentionally threaten disability benefits for some participants when they reach adulthood, according to policy experts who say the conflict exposes a decades-old flaw in Supplemental Security Income (SSI) rules.

Families can begin opening Trump Accounts for their children this month, while babies born between 2025 and 2028 are eligible for a $1,000 federal contribution. Relatives and others can also add money to the investment accounts, which grow over time and are eligible for use once the child turns 18.

However, the Center for Budget and Policy Priorities, a left-leaning think tank, has warned that disabled children could later lose access to SSI payments and Medicaid-linked services if their accounts grow beyond the program’s strict $2,000 asset limit.

Newsweek has contacted the Social Security Administration for comment via email.

Savings Could Cross the SSI Limit

SSI provides monthly monetary assistance to low-income people who are disabled, blind or elderly. To qualify, an individual generally cannot hold more than $2,000 in countable assets, while the limit for a couple is $3,000.

Those thresholds have not been adjusted for inflation in nearly four decades. The CBPP described the restriction as the tightest asset test imposed by any federal program, arguing that it leaves recipients unable to accumulate enough money to prepare for emergencies or build longer-term financial stability.

Trump Account balances will not count toward the asset limit while a child is younger than 18. Once the account holder reaches adulthood, however, its entire value is expected to be included in the SSI calculation.

Even without additional family contributions, the government’s initial $1,000 deposit could grow beyond $2,000 by the time a child turns 18 if the account records average annual returns of just 4 percent, according to the CBPP.

Leo Chen, an assistant professor of finance at the University of South Florida’s Muma College of Business, said the concern was mathematically realistic.

“This collision is possible and not an overstatement," Chen told Newsweek. "Trump Account balances don't count against a child's SSI resource limit when they are under 18. But the full amount will count when they turn 18. Therefore, just 4% average annual growth is enough to carry the $1,000 seed past the $2,000 limit over 18 years. We can easily verify by Rule of 72.”

The consequences could extend beyond the loss of a monthly SSI payment. Eligibility for Medicaid health coverage and community-based support services can also be linked to SSI status, the CBPP said in its report.

About half of disabled children receiving SSI continue to qualify after reaching adulthood, according to the CBPP. If their countable resources exceed the limit, their payments can initially be suspended and later terminated.

In cases where the Social Security Administration does not identify the excess assets promptly, recipients may continue receiving benefits and accumulate overpayment debts that they are later required to repay.

Chen said Trump Accounts were highlighting a problem that already affects people attempting to build ordinary savings.

He said: “While it may be fair to say "punished for saving", I'd caution that this is just a new example of an old problem—the same $2,000 cap already does this to people today over ordinary savings. Because of compounding return on a federal deposit, a family can lose SSI plus Medicaid-linked services, sometimes with overpayment debt on top since SSA sometimes doesn't catch it right away.”

Families Face a Narrow Transfer Window

Families may be able to protect the savings by moving the Trump Account balance into an Achieving a Better Life Experience (ABLE) account. These accounts are designed for people with disabilities, and up to $100,000 can be excluded from SSI’s asset test.

Under the rules described by the CBPP, however, families would have a one-time opportunity to make that transfer when the child is 17. Missing the window could leave the full Trump Account balance subject to the $2,000 limit from the account holder’s 18th birthday.

ABLE accounts have seen limited use. About 246,000 have been opened, including accounts belonging to people who do not receive SSI. That represents significantly fewer than 5 percent of the SSI beneficiaries currently eligible to use them, according to the CBPP.

Darcy Milburn, director of Social Security and health care policy at The Arc of the United States, said families could encounter the problem at an already difficult point in their children’s lives.

“I am concerned that what should be a benefit could turn into a barrier during one of the most challenging and disruptive times in the lives of kids with disabilities and their families – the age-18 transition," Milburn told Newsweek. "It’s a time when many supports and services radically change or fall away. And if they haven’t arranged for money in a Trump Account to be rolled over into an ABLE Account in the right way, at the right time, their access to vital SSI and healthcare benefits could be at risk.

“The most straightforward way to address this problem is to pass the bipartisan SSI Savings Penalty Elimination Act.”

The issue could also affect disabled children from middle-income households who do not receive SSI while they are minors because their parents’ income or savings make them ineligible. Once they turn 18, eligibility is assessed under adult rules, but a Trump Account worth more than $2,000 could prevent them from qualifying.

By then, the opportunity to transfer the balance into an ABLE account may already have passed.

Bipartisan Proposal Would Raise the Cap

The SSI Savings Penalty Elimination Act, introduced by Democratic Senator Catherine Cortez Masto in April 2025, would increase the individual asset limit from $2,000 to $10,000 and tie future increases to inflation. The measure has attracted bipartisan support. Earlier this year, another bipartisan group of lawmakers introduced the Supplemental Security Income Restoration Act, which promises similar changes.

Advocates say a higher threshold would allow disabled people to retain emergency savings without losing essential benefits and reduce the need for families to navigate complicated account transfers. The CBPP also urged Congress to consider allowing Trump Account funds to be transferred into ABLE accounts at any age.

Milburn said the current rules directly conflict with the savings behavior encouraged by Trump Accounts, adding: “The $2,000 SSI asset limit is completely antithetical to the goal of Trump Accounts. It means people with disabilities are stuck in a financial catch-22 — with the federal government directing them to work, save, and invest with one hand, while actively punishing them for being financially responsible with the other.”

Meanwhile, Chen said the accounts could still introduce millions of children to investing and improve financial literacy, but their benefits would not be distributed evenly.

He explained: “Overall, Trump Accounts turn a welfare-style transfer into a compounding asset highly correlated with the long term economic exposure, provides millions of kids who'd otherwise never hold a stock until their adult life, and helps raise financial literacy among children.

“But it's regressive in practice since it can collide with means-tested benefits, and hitting SSI's $2,000 limit at 18 can cost a disabled young adult both the cash payment and Medicaid. Trump Account's real value comes from extra contributions only some families can make.”

Contact Newsweek editors on this story: Ben Kelly and Cristina Diciu.