The ABLE Act (Achieving A Better Life Experience Act) Approved by Congress: A Step in the Right Direction for Individuals with Disability

January 20, 2015
The ABLE Act, also known as The Achieving A Better Life Experience Act, was finally approved by Congress on a 76-16 vote and was signed into law by President Obama in December 2014.  Although the ABLE Act does not directly benefit individuals with disabilities acquired later in life, it is a bold first step in recognizing the financial needs of individuals with disabilities and not penalizing these individuals from receiving public benefits.

What is the ABLE Act?

The ABLE Act allows people with disabilities and their families to set up a special savings account for disability related expenses.  Earnings on an ABLE account would not be taxed.  Disability related expenses is broad in definition and includes: medical and dental care, education, community based support, personal support services, employment training, assistive technology, housing, and transportation. 

How is the ABLE Act different from existing law?

Current law makes savings for disability related expenses difficult.  Individuals and families can face the loss of federal benefits such as social security income (SSI), Medicaid, or other means-tested benefits if savings exceed certain limits (approximately $2,000).  With the ABLE Act, individuals and families can save up to $100,000 without risking eligibility for SSI  and other government programs.  If savings exceed $100,000, SSI benefits would be suspended but not terminated.  And no matter how much money is saved in an ABLE account, it would not affect Medicaid coverage.

Who is eligible for the ABLE Act?

Unfortunately, at this time, the ABLE Act only applies to individuals who become disabled before the age of 26 and receives social security disability insurance (SSDI) or social security insurance (SSI); or files a disability certification under IRS rules. 

The original bill that was initially proposed in Congress over 6 years ago did not have an age restriction, but it was amended by members of Congress before the final bill was passed.

What can you do?

The ABLE Act is only the first step.  The ABLE Act as it is currently written doesn’t provide for the many individuals who become disabled later in life and who struggle with the same financial limitations imposed by federal programs such as SSI and Medicaid.

Consider contacting your Senators and Representatives and ask them to support an amendment to the ABLE Act that removes the age restriction.