Many people with significant disabilities rely on public benefits to make ends meet. These include, for example, Supplemental Security Income (SSI), SNAP (food stamps) and Medicaid. However, there are eligibility rules for these programs that have served to keep people in poverty. To receive these benefits, you can have no more than $2,000 in savings, including retirement savings.
Having a disability can make your life much more expensive, however, and people with disabilities often have to manage more with less. It would be helpful to be able to build some savings without jeopardizing eligibility for the programs people rely on to survive. That might lift some people out of poverty, or at least allow people to purchase services or assistive technology that could make their lives easier.
The Stephen Beck Jr., Achieving a Better Life Experience Act of 2014 (the ABLE Act) solves some of these problems. An ABLE account is not taxed and is not supposed to count against the account holder’s eligibility for most public benefits.
To qualify for an ABLE account, you must have a significant disability with an age of onset of 26 or younger. You don’t have to be 26 or under to get an ABLE account; it’s just that your disability had to begin before age 26. You also have to meet the Social Security Administration’s definition and criteria for a significant functional limitation. If you receive SSI or Social Security Disability Insurance (SSDI), you already meet that definition and criteria.
Once you have an ABLE account, you can receive up to $15,000 a year from your family, friends or others. The upper limit on what you can have in an ABLE account depends on the state you live in. However, you could lose your SSI if you reach $100,000, although you would still be eligible for Medicaid.
The money in your ABLE account can be used for any “qualified disability expense,” which means anything that improves your health, independence or quality of life. This could include education, employment training, housing, transportation, healthcare expenses, personal support services, adaptive technology and other expenses.
Currently, Washington, D.C., and 42 states — including Pennsylvania and New Jersey — allow ABLE accounts. The National Disability Institute estimates that around 8 million people with disabilities in the U.S. are eligible.
Accounts growing steadily, more growth needed
According to Disability Scoop, fewer than 35,000 ABLE accounts had been opened nationwide by the end of last year. However, for state ABLE programs to be self-sustainable while offering low fees, about 450,000 accounts need to be opened and funded before June 2021. The programs are not on track to meet that goal, and changes may need to be made.