In December 2014, the Achieving a Better Life Experience (ABLE) Act was signed into law by President Barack Obama. It is now one step closer to becoming an available planning option for individuals with disabilities and their families. For the first time in public policy, there is recognition there are significant costs and expenses to living with a disability that are not being met by public benefit programs.

The ABLE Act amends the federal tax code to allow tax-free savings accounts, similar to Section 529 college savings accounts, to help pay disability-related expenses incurred for the benefit of an individual. "Qualified disability expenses" under ABLE include education, housing, transportation, employment training and support, assistive technology, personal support services, health care, financial management, legal, and administrative services.

Each state will choose to create and operate an ABLE program, or to contract with another state and use their ABLE program. The Department of Treasury regulations, to be developed in 2015, will guide the states in detailing the information required to open an ABLE account, the documentation necessary to meet ABLE's disability eligibility requirements, and defining allowed disability expenses.

No ABLE accounts can be established until the regulations are finalized following public comment on the proposed rules for program implementation and ABLE programs are established in states.  

Under current law, recipients of public benefits such as Supplemental Security Income (SSI) and Medicaid, can lose these benefits if their savings exceed $2,000. Under ABLE, the $2,000 cap is eliminated for funds in an ABLE account. SSI will not be affected until ABLE account savings exceed $100,000 and SSI would be suspended, not terminated, while the cap is exceeded. Medicaid will not be affected where funds in an ABLE account exceed $2,000 or $100,000.

Note: The current asset limits under SSI and Medicaid remain in affect for savings and assets that are not in an ABLE account or a valid special needs trust.

An ABLE account may have a balance up to $100,000 without affecting public benefits, but a maximum of $14,000 total/year (this amount will be adjusted annually for inflation) may be deposited from all sources (i.e. individual with disability, family, friends). Any funds left in an ABLE account after the account holder's death, regardless of who deposited the funds, would go back to "pay back" the state's Medicaid program to the extent Medicaid benefits were used by the account holder over their lifetime.

To be automatically eligible to open an ABLE account, an individual's disability must have occurred before age 26 (they can be currently younger than or older than age 26), and they must be receiving SSI or Social Security Disability Insurance (SSDI). If the disability occurred before age 26, but SSI or SSDI are not being received, the person would still be eligible if they meet SSI criteria regarding significant functional limitations. The new Treasury regulations will further explain what will be needed to be eligible.

While ABLE accounts will offer more choice and control for the account holder, special needs trusts, both individual and pooled, will still have significant benefits for many individuals with disabilities. Determining which option is appropriate will depend on individual situations, but many families may find that an ABLE account is a helpful option, in addition to, and not instead of, a special needs trust.

Oakland County

Community Housing Network has  vacancies in scattered-site, residential homes in Oakland County for single adult individuals with a qualifying disability who meet HUD income guidelines.

Macomb County

Community Housing Network also has vacancies in scattered-site, residential homes in Macomb County for single adult individuals with a qualifying disability who meet HUD income guidelines.

If you are interested in more information, please contact Karla Chambers at 248-269-1321 or kchambers@chninc.net