The Achieving a Better Life Experience (ABLE) Act

  • ABLE Act allows for individuals with disabilities to save for certain expenses
  • Funds in an ABLE account should not affect eligibility for federal benefits
  • Social Security Administration and the IRS have drafted guidelines governing ABLE accounts

The federal Achieving a Better Life Experience (ABLE) Act was signed it into law by President Obama on December 19, 2014.  The ABLE Act changes the tax code to allow for tax-advantaged savings accounts for qualified individuals with disabilities to save for certain expenses, such as education and transportation. If properly managed, funds in an ABLE account will not jeopardize eligibility for critical federal benefits like Social Security and Medicaid.

New rules, guidelines, and procedures are being created at both the federal and state level to allow individuals and families to start creating ABLE accounts.  The Social Security Administration (SSA) has issued instructions for SSA staff to guide them in implementing the ABLE Act and making decisions about the Act with respect to Supplemental Social Security and Social Security Disability Insurance benefits.  The Internal Revenue Service released draft regulations in June 2015 and interim guidelines near the end of 2015.

Minnesota has joined a consortium with eight other states to create and operate an ABLE Act program.  The consortium is beneficial because it allows the states to pool resources together which may cause the operate the program at a lower cost.  The consortium is currently seeking public bids for investment services, record keeping and marketing services.  The consortium is hoping to launch the program in the fall of 2016.

The Minnesota Department of Human Services (DHS) is also working to determine how the income drawn from ABLE accounts will affect eligibility for programs and services provided by the DHS and other state agencies.

Recently, four states, Ohio, Tennessee, Nebraska, and Florida, have launched their ABLE Act programs.  Qualified individuals from any state may open accounts in Ohio, Tennessee, and Nebraska, but Florida’s program is only available to Florida residents.  Ohio’s program can be found at: http://www.stableaccount.com/. Tennessee’s program is available at: http://www.abletn.gov/.  Nebraska’s program is found at: https://www.enablesavings.com/home/able-act.html.

Minnesota’s ABLE program will not be available for several months.   However, you might need to act now to protect funds, so we would encourage you to learn about The Arc Minnesota’s Master Pooled Trust.  Our trust may also fit your family’s needs if your situation doesn’t fit within the restrictions laid out by the ABLE Act; read this fact sheet for more on those restrictions.

Our Master Pooled Trust can hold funds from person with a disability or funds from the person’s family and not jeopardize government benefits.  The cost to set up our trust can be much less than a private trust, and The Arc Minnesota provides its services as trustee.