What Is The ABLE Act?
December 19 marked the 10th year of the ABLE Act. The Stephen Beck, Jr. Achieving a Better Life Experience (ABLE) Act was signed into law as part of the Tax Increase Prevention Act of 2014. It allows those with disabilities to open a tax-free savings and investment account. Investment growth under the ABLE Act is not taxable and is not counted as income as long as the funds are used to pay for qualified disability expenses (QDEs) such as education, housing, transportation, basic living expenses, food, rent, utilities, and funeral/burial expenses, allowing for flexibility for how the ABLE funds are used. The law made it possible for people with disabilities to save money so they can enhance their financial health, independence, and quality of life.
Contributions to savings and investment accounts are treated as gifts for federal gift tax purposes. They do not replace any benefits a person received through government agencies; instead, the funds supplement these benefits. ABLE accounts allow SSI recipients to hold up to $100,000, which is not subject to the asset limit.
The first ABLE program opened in 2016. Since then, account holders have saved more than $2 billion in assets. So far, more than 187,000 people with disabilities have opened an ABLE account, and there is an average of $11,600 saved in each account. Despite this, only 3% of those eligible for ABLE have opened an account. This is likely because many people are not aware of it.
Many SSI and SSDI recipients would benefit from use of an ABLE account. That’s because exceeding the resource limit is one of the main causes of overpayments. If more Social Security recipients used ABLE accounts, they could avoid overpayments when their resources exceed $2,000, which is a very low amount. Fewer recipients would be suspended and terminated.
There are 49 ABLE plans available across the United States. They vary based on location. You may qualify for credits if you choose your state’s plan. Take time to make the right choice, as you can only have one plan.
To be eligible for an ABLE account, a person’s disability must have begun before age 26, but an account can be opened at any age. On January 1, 2026, the age limit will expand under the ABLE Age Adjustment Act to include people who have a disability that began before age 46.
Those who need assistance to open and manage their account can enlist help from family members, legal representatives, and representative payees.
Learn More About Social Security Disability Benefits
There are many things that can help those who are disabled. Thanks to the ABLE Act, they can even invest their money without it affecting their benefits.
Get the help you need from a White Plains Social Security Disability lawyer from The Law Office of Michael Lawrence Varon. Social Security law is complex, but we can help you navigate the process. To schedule a consultation, fill out the online form or call (914) 228-1770.
Source:
blog.ssa.gov/able-act-10-years-of-progress-for-people-with-disabilities/
