The Achieving a Better Life Experience (ABLE) Act was passed in 2014. ABLE create tax-advantaged savings accounts for individuals with disabilities and their families. Individuals with disabilities who rely on public benefits for income such as SSI, SNAP, and Medicaid, who would previously lose benefits by holding more than $2,000 in a savings account. The ABLE Act recognizes the extra financial need of living with a disability, and acknowledges that $2,000 will not allow the individual to be financially stable. ABLE savings accounts allow individuals to save money and still qualify for SSI, SNAP, and Medicaid. Income that is earned in these accounts will not be taxed. Contributions can also be made to the account by individuals other than the account holder.
Individuals with significant disabilities, who received a diagnosis before the age of 26 years old, are eligible for an ABLE savings account. You may open an account after the age of 26, as long as the age of onset for the disability occurred before the individuals 26th birthday. $15,000 per tax year to can be put into an ABLE account. When an ABLE savings account reaches $100,000, the individuals SSI will temporally be put on hold until the account is below $100,000. ABLE savings accounts may be used to pay any expense related to the individual who is living a life with disabilities. These include, but are not limited to, education, housing, transportation, employment training, assistive technology, personal support services, health care expenses, financial management and other expenses which help improve quality of life.
Individuals may only have one ABLE savings account. The ABLE Act is established in Pennsylvania, but not all states. You do not need to be a resident of the state the act is established in in order to open an account.
- Special Needs Trusts
- Medicaid for Adults with Disabilities
- Qualifying for Supplemental Security Income as an Adult with ASD