ABLE Accounts – A Protected Savings Option for Persons with Disabilities

Written by Michael Morris, Executive Director, National Disability Institute (NDI)

Persons with disabilities who receive needs-based benefits such as Supplemental Security Income (SSI), Medicaid or food stamps (SNAP) are limited to saving up to $2,000 so they can remain eligible for public benefits. ABLE accounts provide an opportunity for individuals to save over the $2,000 resource limit while keeping needed benefits.

ABLE accounts are tax-advantaged savings accounts for persons with disabilities that allows an individual to save up to $15,000 per year. An eligible individual may have only one ABLE account and must meet the following qualifications:

  • The person must have a significant disability or blindness, with an age of onset of disability before turning 26 and:
    • Receive benefits under SSI and/or Social Security Disability Insurance (SSDI), or
    • If they are not a recipient of SSI and/or SSDI, but still meet the age of onset of disability requirement, they must have a medically determinable impairment which has lasted for not less than 12 months and results in marked and severe functional limitations. They must obtain a disability certification including the medical diagnosis signed by a licensed physician (M.D. or D.O.).
  • To open an ABLE account, an individual may be any age. For example, a family member of guardian may open an ABLE account for an infant who has a significant disability; a person who is now over the age of 26 may open an account if their disability began before the age of 26.

Funds saved in an ABLE account must be used to pay for qualified disability expenses (QDEs). A "qualified disability expense" means any expense related to the designated beneficiary as a result of living a life with a disability. These may include education, housing, transportation, employment training and support, assistive technology, personal support services, health prevention and wellness expenses, financial counseling or coaching, legal fees, expenses for oversight and monitoring, funeral and burial expenses and other expenses which help improve health, independence and/or quality of life.

The term “qualified disability expenses” should be broadly construed to permit the inclusion of basic living expenses and should not be limited to expenses for items for which there is a medical necessity or which provides no benefits to others in addition to the benefits to the individual with a disability.

The ABLE account owner, their family and friends, or even an employer, may contribute up to $15,000 collectively per year (2019) into the ABLE account.

ABLE accounts create a new opportunity for persons with disabilities, who qualify, to save money to improve their quality of life.

To learn more about ABLE accounts, visit: http://ablenrc.org/road-map-enrollment.

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