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    September 18, 2024

    ABLE Accounts: Empowering People with Disabilities

    Shaun M. Snyder, Chief Executive Officer of the National Association of State Treasurers

    Many people with disabilities rely on programs like Supplemental Security Income (SSI) and Medicaid to support their daily living and medical needs. However, these benefit programs have stringent eligibility requirements, including strict asset limits. For many, these restrictions present significant barriers to saving money or planning for future expenses. Under current rules, individuals receiving SSI or Medicaid can only hold assets up to $2,000 without jeopardizing their benefits. This limitation can mean the difference between financial stability and ongoing uncertainty. It hinders their ability to afford essential expenses, such as unexpected medical costs or necessary equipment, creating a cycle where financial planning is relegated to month-to-month survival.

    Acknowledging this challenge, Congress passed the Achieving a Better Life Experience (ABLE) Act in 2014. This landmark legislation introduced a new financial tool—ABLE accounts—designed to help people with disabilities save for their future without losing access to critical benefits like SSI or Medicaid. These tax-advantaged accounts provide a flexible savings and investment vehicle that allows for contributions from individuals, families, or caregivers. As of June 2024, there are over 180,000 ABLE accounts nationwide, with more than $2 billion in assets.

    Impacting Lives

    ABLE accounts fundamentally change the financial landscape for people with disabilities by allowing them to save and invest beyond the $2,000 asset limit. They enable individuals to retain eligibility for government benefits while accumulating savings to cover a wide range of expenses. This offers people with disabilities, their families, and caregivers an opportunity to break the cycle of living paycheck to paycheck.

    ABLE eligibility requires that the onset of the disability must have occurred before their 26th birthday. Individuals with disabilities that meet the age eligibility requirement can enroll throughout their life. Someone could even be diagnosed with a disability in their 30s, 40s, etc. and still be ABLE eligible, as long as the diagnosis states that the disability onset was before age 26. Through the ABLE Age Adjustment Act, the age of eligibility will rise to 46 starting January 1, 2026. Many advocates predict this change will expand eligibility to as many as 8 million, including more than 1 million veterans who developed disabilities later in life.

    Here are some real-life examples of how ABLE accounts have positively impacted people’s lives:

    1. Daniel’s Story: Daniel, a member of the National Federation of the Blind (NFB), utilized his ABLE account to purchase his first home. "I started putting as much money as I could into my ABLE account to help with the 20% down payment for purchasing my home," Daniel explained. “ABLE accounts are a wonderful vehicle for blind people and others with disabilities to save and take tax-free distributions for disability-related expenses.” You can read the full interview with Daniel in the NFB’s June 2024 newsletter.
    2. A Father of a Son with a Disability: ABLE accounts have been instrumental in supporting his 20-year-old son’s long-term needs. “Our son will be on public benefits for life, and his ABLE account helps us cover additional expenses related to his disability.”
    3. Pennsylvania Enrollee: "I’ve been on public benefits my whole life. Now, I’ve saved enough in case my air conditioner or refrigerator breaks, and I can afford additional medical expenses not covered by my health insurance."
    4. Parents of a Child with Autism: “An ABLE account enables our son to live a more independent life.” He works part-time and uses public transportation, but with his ABLE account, he can now afford rideshares during cold winter months when buses run late. This small improvement has significantly enhanced his ability to work and enjoy his earnings.

    How ABLE Accounts Work

    ABLE accounts operate similarly to 529 college savings plans and are managed by states. These accounts come with various user-friendly features such as checkbooks, third-party bill pay options, and debit cards. In some states, contributions to ABLE accounts are tax-deductible, further incentivizing families to invest in the long-term financial security of individuals with disabilities. You can explore ABLE programs in different states by visiting www.abletoday.org.

    Access Free ABLE CLE

    The National Association of State Treasurers (NAST), in collaboration with the D.C. Bar, has developed an online continuing legal education course that provides a comprehensive overview of the statutory framework governing ABLE accounts, detailing the eligibility requirements, contribution limits, and interaction with other benefits programs like SSI and Medicaid. The CLE also covers qualified expenses, tax rules, and essential practice tips for incorporating ABLE accounts into estate planning, including strategies for utilizing special needs trusts.

    This course is accessible for free and is recognized in most states. It helps attorneys better serve clients with disabilities by offering them a vital tool to save for a future with more choices and greater financial stability. These accounts continue to be underutilized, and this course raises awareness of, and educates attorneys about, this vital financial planning tool.

    Shaun M. Snyder

    Chief Executive Officer of the National Association of State Treasurers

    Shaun Snyder serves as CEO of the National Association of State Treasurers, where he supports state chief financial officers who manage over $4 trillion in public funds.  Shaun also serves as the 2024-2025 President of the D.C. Bar, one of the country's largest unified bars, with 119,000 members in DC, all 50 states, and over 80 countries.  In previous roles, Shaun served as COO of the American Psychiatric Association, Interim Director and Chief Operating Officer of the Washington, DC Health Department, Special Assistant to the General Counsel of HUD, and Legislative Counsel at the Council of the District of Columbia.  Shaun earned his JD at Georgetown University Law Center and an MBA at George Washington University.

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