Achieving a Better Life Experience (ABLE) Accounts Go Bag
What Is the ABLE Act?
On December 21, 2014 the ABLE Act (Achieving a Better Life Experience) was signed into federal law by President Obama.
The ABLE Act allows individuals with disabilities and their families to save for long-term needs, via 529-style savings accounts, without jeopardizing an individual's eligibility for critical federal entitlement programs like Social Security Income (SSI) or Medicaid. Eligible expenses including, but are not limited to:
- Employment training and support
- Assistive technology
- Personal support services
- Prevention and wellness
- Financial management and administrative services
- Legal fees
- Funeral and burial expenses and basic living expenses
*Distribution for non-qualified expenditures will be subject to tax consequences and may affect eligibility for federal means- tested benefits.
The Arc of New Jersey and The Arc of the US have been strong supporters and advocates for the ABLE Act. We believe these accounts will serve as another tool families and individuals can use as they plan for the years ahead.
- Onset of disability was before the age of 26
- The individual is receiving benefits already under Social Security Income (SSI) or Social Security Disability (SSDI)
- The individual meets social security’s definition and criteria regarding significant functional limitation and receive a letter of certification from a licensed physician
- Offering tax deferred growth potential that is tax free as long as withdrawals are used for qualified disability related expenses. For a list of qualifying expenses, click HERE.
- Not affecting eligibility for SSI, Medicaid, and other public benefits as long as certain conditions are met
- Total annual contribution is 15,000
- Maximum account balance is 305,000 in NJ (varies by state) *This could change over time
- If there is more than 100,000 in the ABLE account an individual's SSI payment will be suspended (not terminated). Medicaid benefits are NOT suspended
**Medicaid Payback: Any assets remaining in the ABLE account when a beneficiary dies can be used to reimburse a state for Medicaid payments made on behalf of the beneficiary after the creation of the ABLE account. The state would file a claim for those funds.
New Jersey Resources
- Social Security and ABLE Accounts
- The ABLE National Resource Center (ANRC)
- ABLE Program Implementation
- National Policy Matters: ABLE Accounts for People with Disabilities
Able Accounts in the News
January 15, 2019
January 7, 2019