ABLE for Disabled People

Many people who have disabilities are unfamiliar with the ABLE Law or what an ABLE account is and how it can help them. Recently in Nevada, I helped educate people with disabilities, attorneys and some judges who hear cases on ABLE.  This really opened my eyes to the importance of an ABLE account.

What is an ABLE Account?

An ABLE account is a tax-advantaged savings account where qualified individuals with disabilities can open a spending account as a result of the passage of the ABLE Act of 2014.  The person can make a contribution to their ABLE accounts on an after-tax basis. The earnings from ABLE funds are tax-deferred and are tax-free as long as the person uses them for qualified disability expenses.

Why Do We Need ABLE Accounts?

In most states, people with disabilities can only have $2,000 in assets at any given time in order to remain eligible for many federal programs that many depend on programs like Supplemental Security Income (SSI).  Although under ABLE, they are now eligible for an ABLE savings account that will not affect their eligibility for SSI (up to $100,000), Medicaid and other public benefits. Also, the ABLE account allows for an increase above the $2,000 asset limitation so that individual account holder and his or her family can save money for their present and future needs.

Who is Eligible to Open an ABLE Account?

An individual must meet two requirements to be eligible for an ABLE account: an age requirement and a severity of disability. This means that the symptoms of the person’s disability must have occurred before age 26. This is the current law, although there is a proposal in the U.S. Senate called the “ABLE Age Adjustment Act, S. 651”, which would increase access to a newly established ABLE Accounts. This legislation introduced though a bipartisan effort by senators would raise the eligibility age for ABLE accounts from 26 to 46. You can check here to see if your senator is a co-sponsor, but current law states the age is 26.

Who Can Put in Funds in an ABLE Account?

Anyone can contribute to the account, such as the account beneficiary, an employer, family and friends. Also depending on the state, those deposits may or may not be tax deductible depending on the specifics of each state. So, make sure you check your state ABLE requirements.

How Can ABLE Funds Be Used?

The ABLE account owner can use the funds for many different types of expenses. ABLE account funds can be used for any expense related to living with a disability. This can include basic living expenses, education, assistive technology, hiring personal care attendants, accessible housing, health care costs, transportation, and much more.

What Defines You as an ABLE Beneficiary?

The definition of the disabled individual must have “marked and severe functional limitations” (essentially, a Social Security definition of disability). An individual whose disability occurred prior to age 26 and is already receiving SSI and/or SSDI is automatically eligible to establish an ABLE account. Those who are not recipients of SSI and/or SSDI but still meet the age of onset disability requirement will be eligible to open an ABLE account upon obtaining a disability certification from their physician.

If you think you or your family member qualifies for an ABLE account, you can call your state treasurer’s office to find out what your state requirements are.  Make sure that when you Google your ABLE requirements in your state that the link is associated with your state.

About Madonna Long: Madonna works as a disability advocate to educate policymakers and congressional leaders on disability issues. She is a mother to four children and lives life on her terms, despite a spinal cord injury. Click here to learn more about Madonna.