An ABLE account is a tax-advantaged savings and investment account that empowers people with disabilities to save money without losing their state and federal benefits.

With ABLE accounts, individuals and their families can save funds without losing SSI, Medicaid, HUD, or other means-tested benefits. Before ABLE, people with disabilities who received public benefits were not allowed to have more than around $2,000 in savings. This limitation made it difficult for them to live the independent lives they desired. Additionally, families were discouraged from saving for their children with disabilities because of the potential future impact on benefits. ABLE changes all of that.

SSI

Up to $100,000 can be saved in an ABLE account without affecting SSI benefits.

Medicaid

ABLE account savings do not impact Medicaid benefits.

HUD, SNAP, and other means-tested benefits

ABLE account savings do not impact eligibility for other federal benefits programs.

ABLE accounts are available to people with disabilities. Your disability must have begun before your 46th birthday. The disability must be long term (lasting at least 12 months), and it must cause “marked and severe functional limitations.”

In addition, you must meet one of the following criteria to open an ABLE account:

(1) you are eligible to receive SSI or SSDI;

(2) you have a condition on the SSA’s List of Compassionate Allowances Conditions;

OR

(3) you have a written diagnosis from a doctor

Adults with disabilities may open and manage their own ABLE account. Minors and adults who need assistance can have an authorized representative open and manage the account for them. If the account holder does not have legal capacity, then only certain individuals can serve as the authorized representative. These individuals, in order of priority, include the account owner’s Power of Attorney, conservator or legal guardian, spouse, parent, sibling, grandparent, or representative payee.

Eligible individuals may only have one ABLE account at any time, and the eligible individual with a disability is always the named owner of the account.

Anyone can contribute to an ABLE account including the account owner, friends, family, nonprofits, and employers.

ABLE accounts can be used to pay for “Qualified Disability Expenses, or QDEs. QDEs are expenses that relate to the account owner’s disability and that improve the account owner’s health, independence, and quality of life. Examples include:

• Health, prevention and wellness

• Housing, food, and other basic living expenses

• Transportation

• Education

• Assistive technology

• Personal support services

• Employment training and support

• Financial, administrative, legal fees

• And more

Earnings on ABLE accounts grow free of federal (and most state) income taxes so long as account proceeds are used to purchase Qualified Disability Expenses. Some states offer a state income tax deduction or credit for contributions to ABLE accounts. Certain contributions may also be eligible for the federal Saver’s Credit.

The vast majority of ABLE plans provide online enrollment via their websites. Some ABLE plans accept paper applications as well. Individuals may also work with a financial advisor to open an account in certain ABLE plans. To look at different states’ plans, visit www.abletoday.org/able-programs.

To enroll yourself or support someone else in enrolling in an ABLE account, you will need personal identification information including social security number, birthdate, address, and contact information. The different ABLE programs will have various enrollment questions and security features for creating the ABLE account. You should review the ABLE Program Disclosure Statement or visit the specific ABLE Program's enrollment website for more information.

Most Programs have annual dollar-based fees, asset-based fees, or both. Fees generally range from $0-$60 in annual dollar-based fees and 0.0%-0.90% in asset-based fees. In some plans, fees are reduced or waived in certain circumstances (for example, if one maintains a certain account balance or chooses electronic statement delivery). Each ABLE Program describes its plan, including all fees, in a program disclosure booklet.

Compare ABLE programs at nast.org/able or at ablenrc.org.

First, funds left in the ABLE account can be used to pay for remaining qualified expenses, including funeral and burial costs. If the account owner received Medicaid benefits while the ABLE account was open, Medicaid may file a claim for repayment after outstanding qualified expenses and funeral and burial costs are paid. Some states have passed laws that prohibit their state’s Medicaid agency from recovering ABLE funds in certain circumstances. Check with your state’s ABLE Program for more information.

Arkansas, California, Delaware, Florida, Illinois, Iowa, and more. To date +20 states have exemptions on Medicaid claims. Please visit our My State’s ABLE Plan tool to research if your state has the exemption.