ABLE ACCOUNTS

A FINANCIAL TOOL FOR INDIVIDUALS WITH DISABILITIES AND THEIR FAMILIES TO SAVE FOR THE FUTURE

BY SARA HART WEIR

The Stephen Beck. Jr., Achieving a Better Life Experience (ABLE) Act of 2014 established a new savings and investment tool called ABLE accounts exclusively for people with disabilities. ABLE accounts allow individuals with disabilities to save money beyond asset limits set by the disability benefits programs, such as SSI and Medicaid. ABLE accounts foster person-centered independence, build self-reliance, encourage employment and improve quality of life.

READY AND WILLING : PROVIDING FAMILIES WITH THE FINANCIAL PLANNING SUPPORTS THEY NEED

WHAT ARE ABLE ACCOUNTS?

An ABLE account is a tax-advantaged savings and investment account that empowers people with disabilities to save money without losing eligibility of disability benefits. ABLE account funds can be used for every day expenses as well as used to save for the future.

When Congress passed the ABLE Act, it established "Qualified Disability Expenses" (QDEs) for people with disabilities, to be empowered to not only save and invest money in their ABLE accounts, but to also spend it. Money spent from an ABLE Account should relate to the disability, and help maintain or improve health, independence, or quality of life. You can learn more about QDEs by visiting our website at: abletoday.org/qualified-expenses.

DO I QUALIFY FOR AN ABLE ACCOUNT?

ABLE accounts are available to people with disabilities, whose disability begun before their 26th birthday. The disability must be long term (lasting at least 12 months), and it must cause "marked and severe functional limitations."

In addition, a person with a disability must also meet one of the following criteria to open an ABLE account:

  1. be eligible to receive SSI or SSDI due to their disability
  2. have a condition on the SSA's List of Compassionate Allowances Conditions
  3. you have a disability diagnosis from a doctor.

It's important to also note that the individual with a disability does not need to be on disability benefits to open up an ABLE account, you only need to meet the definition of disability according to the Social Security Administration (SSA).

WHAT ARE THE BENEFITS OF HAVING AN ABLE ACCOUNT?

ABLE accounts allow people with disabilities to save money that is not counted toward asset limitations set by means-tested benefit programs, such as Medicaid or SSI. "Asset limits" prevent people with disabilities from saving money beyond $2,000 (a typical asset limit) and planning for their future.

Anyone can contribute to an ABLE account — including the account owner, friends, family, organizations, nonprofits, and employers — up to $17,000 per year. If the account owner is working and not already contributing to a workplace retirement plan, they can contribute an additional amount equal to their current year's gross income (up to a maximum of $13,590 in