ABLE Accounts: What You Need to Know

ABLE accounts are “tax-advantaged savings accounts for individuals with disabilities and their families.” You might be wondering what this means, so today we’re going to go over what ABLE accounts are, how you or a loved one could benefit from having one, and the eligibility requirements to qualify.

Let’s dive right into it!

Living with a child with a disability comes with a number of additional costs. Assistive technology, healthcare, and personal assistance insurance all come at a high price. For this reason, many people with disabilities depend on a variety of public benefits such as Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), Medicaid, and others. The issue however lies in the fact that these individuals are deemed ineligible for these assistance programs should they report more than $2000 in a savings. This means that in order to remain eligible for these programs, disabled individuals have to live under the poverty line.

This is where ABLE accounts come in. As of December 19th, 2014, the ABLE Act (Achieving a Better Life Experience Act) was signed into law-- enabling disabled persons to continue to have access to necessary health benefits without losing the ability to save money for the future. Healthcare and other services paid for through an ABLE account will not replace the benefits provided by SSI, SNAP, Medicare, etc. but instead supplement them.

A number of people may be eligible for ABLE accounts without even knowing it. If you contracted a serious disability before the age of 26 and are currently receiving benefits from SSI, then you are automatically eligible for an ABLE account. If you don’t currently receive SSI benefits, you might still be eligible. However, you will have to get a letter of certification from a doctor indicating that you have significant functional limitations, as well as meet Social Security’s criteria regarding severe disabilities. It should also be said that you can still be eligible for an ABLE account after you are 26 years old, so long as your disability manifested itself before you were 26.

Gifts of up to $14,000 (total per year) can be put into an ABLE account from a beneficiary without having to be reported. The total amount an ABLE account can hold is set at $300,000 by most states, but SSI benefits will stop if funds exceed $100,000. However, Medicaid benefits will remain active despite the total amount in the account.

Money in an ABLE account can be used for any “qualified disability expense” covering any expense that comes as a result of living with a disability. These expenses include employment training and support, assistive technology, personal support services, healthcare expenses, education, housing, and many others. Essentially, if your disability demands a certain expense, it can be covered by your ABLE account.

Not all states currently offer accounts under the ABLE program. However, you can still apply for an out of state ABLE account in states such as Ohio, Nebraska, and Tennessee.

Living with a disability comes with a number of extra expenses that make life more difficult. If you or a loved one are living with a serious disability and find yourself struggling financially, then starting an ABLE account is a solution.

To learn more about ABLE accounts, click here.