Today, December 19th, marks the fourth anniversary of the signing into law of the Stephen Beck Jr., Achieving a Better Life Experience (ABLE) Act. This piece of legislation allows millions of Americans with disabilities nationwide the ability to save money for their future while not jeopardizing their eligibility for vitally important federally-funded supports such as Social Security and Medicaid. For many millions of eligible individuals with disabilities, ABLE has positive features, such as income growing tax-free from investments when funds are disbursed from an individual account.
Since the passage of the ABLE Act, eligible individuals and their families can establish ABLE savings accounts that will not affect their eligibility for Supplemental Security Income (SSI), Medicaid and other public benefits. (For ABLE account basics, please watch the ABLE National Resource Center (ANRC) video: ABLE Accounts: 10 Things You Should Know.)
The beneficiary of an ABLE account is the account owner and income earned by the account will not be taxed. Contributions to the account made by any person (the account beneficiary, family and friends) are made using post-taxed dollars and are not tax deductible for purposes of federal income tax, although some states may allow for state income tax deductions for contribution made to an ABLE account. Use the ANRC state comparison tool for more information on tax deductions.
Millions of individuals with disabilities and their families are often relegated to a life of poverty as a result of not being allowed to build even the most modest levels of resources. Individuals receiving supports through Social Security, Medicaid and other publicly-funded programs, are often disqualified from those supports if they have more than $2,000 worth of resources or assets. Now, eligible individuals with disabilities and their families are able to better secure their financial futures by offsetting the often significant financial challenges that can accompany living with a disability.
For 2019, total annual contributions by all participating individuals, including family and friends, is $15,000. To date, 42 states, including the District of Columbia, have passed ABLE-related legislation to allow the development of programs in their state, and there are now 30,000 ABLE accounts nationwide which represent more than $144 million of assets under management.
The ABLE National Resource Center, managed by National Disability Institute, supports thousands of individuals with disabilities and their families to create a personal pathway to better financial stability and security. Visit ablenrc.org for education, technical assistance and information resources that promote greater independence, productivity and community participation.