Learn more about how ABLE accounts can help supplement expenses.
The Stephen Beck, Jr., Achieving a Better Life Experience Act (ABLE) Act became law on December 19, 2014. ABLE accounts create a new option for some people with I/DD and their families to save for the future, while protecting eligibility for public benefits. A number of states have now launched ABLE programs. Most of these programs make ABLE accounts available to eligible individuals across the country. Click here to see which states have launched ABLE programs and the status of ABLE programs in other states.
What is an ABLE Account?
ABLE accounts are special savings accounts that enable eligible individuals to save for disability related expenses. ABLE accounts are modeled after Section 529 college savings plans, and the money in them will grow tax free. Family members can contribute a total of up to $14,000 a year to one ABLE account. The total limit is established by the state in which the account is established (often $300,000).
Who is eligible?
Families should consider how an ABLE account fits into the plan to finance the future. Some families may decide to create both an ABLE account and a special needs trust; some families may use only one.
To be eligible for an ABLE account, individuals must meet the following two requirements:
- Must be disabled before 26th birthday AND
- Must provide proof of the severity of disability, either by meeting the disability requirements for SSI or Social Security disability benefits OR by submitting a certification that meets criteria and having a doctor’s diagnosis.
What may funds from an ABLE account be used for?
Individuals may spend funds from an ABLE Account on these expenses:
- Employment training and support
- Assistive Technology and personal support services
- Health, prevention, and wellness
- Financial management and administrative expenses
- Legal fees
- Expense for oversight and monitoring
- Funeral and Burial expenses
- Any other expenses approved by the Secretary of the Treasury under regulations
How do ABLE account assets impact eligibility for federal benefits?
ABLE accounts allow individuals with I/DD and their families to save up to $100,000 without impacting their Supplemental Security Income (SSI) benefits. SSI cash payments will be suspended if the beneficiary’s ABLE account balance exceeds $100,000. However, SSI benefits and eligibility will not be terminated. When the balance falls below $100,000, SSI cash payments will resume.
ABLE account assets do not impact Medicaid eligibility and coverage of a person with I/DD. However, when the beneficiary dies, remaining assets in the ABLE account will be available to reimburse a state Medicaid agency for services provided after the creation of the ABLE account.
For more information on ABLE accounts, check out The Arc’s National Policy Matters: ABLE Accounts for People with Disabilities. You may also want to consider listening to our recorded ABLE Act webinars for chapter staff and other disability professionals and for people with I/DD and family members.