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
- Seven states have launched programs to set up 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.
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 and potentially operate the program at a lower cost. The consortium hopes to launch its program before the end of 2016.
Before the program is ready, the consortium must take care of a number of details. These include finalizing a contract with an ABLE plan vendor, drafting appropriate legal documents; and ensuring that the multi-state program complies with federal securities laws and regulations. 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.
So far, seven states have launched their ABLE Act programs:
Qualified individuals from any state may open accounts with any of the above programs, except for Florida’s, which is only available to Florida residents.
If you need to act now to protect funds, we 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.
First draft of federal regulations to implement ABLE Act June 2015
Interim federal guidelines on ABLE Act Nov. 2015
Social Security Administration instructions to its staff on implementing the Arc