Achieving a Better Life Experience: An Update on the ABLE Act

 March 26, 2015
Posted by M&LAdmin4

March 26th, 2015

Hello everyone, and welcome back to the blog this week! We love writing and publishing these weekly posts, and we hope that each time you visit us you take away some valuable information relevant to special needs financial and life planning. If at any time you would for us to cover a specific topic, please let us know!

Over the last few weeks, we have been focusing our attention on a topic that we are incredibly passionate about: independent living and housing for individuals with disability. Today, we would like to switch gears and focus on something more closely related to the financial side of special needs planning – the ABLE account.

Please join us for a discussion of this valuable financial tool, including a brief explanation of what it is and how it can help your family with special needs. We will also take a look at what each state is doing to ensure that this account is available to the public as soon as possible.

The ABLE Account – What is it, and How Can it Help?

An ABLE account is a savings account that is established for the sole use of an individual with disability. The account (which is an amendment of the 529 college savings account) allows individuals with disabilities to accumulate savings that are not subject to federal and/or state tax – provided the funds are used for qualifying expenses. In addition to this, the savings in these accounts will not affect an individual’s eligibility for government benefits. This account is intended to supplement, not supplant, federal benefits and benefits paid through Medicaid, private insurance, and employment.

The National Down Syndrome Society (NDSS) is an avid advocate and ardent supporter for the ABLE Act and the resulting ABLE account; they identify a number of benefits that would result from enabling access to this type of savings account. As stated on their website, “An ABLE account could fund a variety of essential expenses for individuals, including medical and dental care, education, community based supports, employment training, assistive technology, housing, and transportation. The ABLE Act provides individuals with disabilities the same types of flexible savings tools that all other Americans have through college savings accounts, health savings accounts, and individual retirement accounts.”

Please note: Understanding the payback provision is incredibly important for families with special needs who are considering using the account as a savings vehicle. If you would like more information on the payback provision, or on how an ABLE account can help your family member with special needs, please contact us or click here to read all of our blogs on the topic.

State-to-State: The ABLE Act in your community

Obama signed the ABLE Act into law on December 19th of last year, but each state holds the responsibility of regulating and writing legislation that will make these accounts accessible to the public. According to Disability Scoop: “Under federal law, the ABLE Act allows people with disabilities to open special accounts where they can save up to $100,000 without risking eligibility for Social Security and other government programs. However, states must put regulations in place before financial institutions can begin offering the accounts.”

There is poetry in the fact that Virginia, the state where the ABLE Act was first conceptualized, is the first state to put these regulations in place – on March 17th, Gov. Terry McAuliffe signed legislation enacting the ABLE Act in Virginia. The bill passed the state Senate and state House by a vote of 92-5. Despite this progress, it may still take up to a year for the accounts to be accessed by the public.

Massachusetts, Louisiana and Minnesota have also passed legislation to open ABLE accounts in those states. Two other states that are close to passing bills related to the ABLE Act are West Virginia and Utah. 29 other states – Alabama, Arkansas, California, Connecticut, Florida, Hawaii, Illinois, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont and Washington – are still considering bills and seven states are drafting them.

If you are interested in remaining up to date with the progress the different states are making in enacting this ABLE Act legislation, please stay tuned to our blog! We will keep you posted as to when you can access an ABLE account in your own state.

ABLE Act Resources & Additional Information

Like anything new, the ABLE Act may be overwhelming and at times confusing to the general public. In order to help you understand everything about this savings account, we have compiled a list of resources. We hope that there are helpful to you – as always, contact us with any questions you may have.

How to Understand the ABLE Act

Video tutorial released by

Ten Things You Should Know about the ABLE Account

Information guide published by the National Down Syndrome Society

What You Need To Know About the ABLE Act and Tax Free Savings Accounts
Published by, article talks about “qualified expenses” and other issues relating to this account.

The ABLE Act – the 112th Congress
Additional information about the act, and also includes a discussion of the payback provision

What’s Next for ABLE Implementation?
Published by Autism Speaks, the article is a guide to where the different states sit in regards to passing ABLE-related legislation.

Thank you all again for taking the time to visit our blog today! Please join us next week for another post on an important special needs topic – and please, if you have any questions or suggestions, please let us know. See you next Thursday!

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