Attorney
The ABLE Act – Read the details here…
Living with a disability can be costly. Recently, President Obama signed into law the Achieving Better Life Experience (ABLE) Act. The ABLE Act allows people with disabilities and their families the ability to create a tax-exempt savings account that can be used for improving one’s independence, and quality of life.
Individuals with disabilities depend on several publically funded programs including SSI, Medi-Cal, etc.) to provide financial assistance with everyday needs. Eligibility for these benefits varies between states, but generally the individual may not have more than $2,000 in “countable funds” in order to qualify. With the ABLE Act, individuals can have additional funds in an ABLE account without losing their eligibility for these programs.
If a person has a significant disability that began prior to 27 years of age, and is receiving SSI/Medi-Cal benefits, an ABLE account is an option. There are limitations on ABLE accounts. For example, the total annual contribution by all participating individuals may not exceed $14,000. Additionally, if an ABLE account for an SSI beneficiary exceeds $100,000, the beneficiary is suspended from SSI; however, would continue to be eligible for Medi-Cal. Only one account per individual is allowed. The funds in the account can be used for “qualified disability expenses”, meaning any expense related to managing daily life with a disability. For more information, consult your financial planner or attorney.