You Asked, We Answer! Financial Independence and the ABLE Act

On March 22, we hosted a Work Incentives Seminar Event (WISE) webinar, Achieving Financial Independence with Ticket to Work and the ABLE Act. The webinar, which is now available in the WISE archive, shared information about the Achieving a Better Life Experience (ABLE) Act and how tax-advantaged ABLE accounts can help certain people with disabilities save money.

During the webinar, attendees asked great questions about ABLE accounts, eligibility requirements and opening an ABLE account. Our answers to the top 3 questions will help you on your own path to financial success!

What are ABLE accounts?

ABLE accounts are investment accounts that help qualified people with disabilities and their families save for disability-related expenses. ABLE accounts are tax-advantaged, which means the funds in them grow tax-free. The funds and payments made from the account for qualified disability-related expenses are also not counted in deciding your eligibility for federally funded means-tested benefits, such as Supplemental Security Income (SSI) and Medicaid.

ABLE account funds can be used to pay for qualified disability-related expenses. A qualified disability expense is any expense related to the account beneficiary’s blindness or disability that helps them increase or maintain their health, independence and quality of life. These may include expenses related to education, housing, transportation, employment training and support, assistive technology, personal support services, healthcare expenses, financial management and administrative services, and other expenses.

Do all states have ABLE programs?

The ABLE Act allows, but does not require, states to develop ABLE programs. To offer an ABLE program, each state must pass its own laws. More than 45 states have passed ABLE-related laws. As of April 2017, 18 states have started running ABLE programs. To see the status of ABLE programs in your state, visit the State Review of ABLE Programs. When you review the programs, look for a link to the state website along with enrollment information and other details.

Don’t worry if your state decides not to have an ABLE program! Many – in fact, most – states allow qualified people from other states to open accounts. If your state does open its own ABLE program or you find out another state’s program is better for you, you may be able to transfer the money into that state’s program. The ABLE National Resource Center has a useful tool to compare different state programs. This may help you decide which program might work best for you.

Why is an ABLE account better than a savings account?

Many people with disabilities receive public benefits, including:

• Supplemental Security Income (SSI)
• Medicaid
• Supplemental Nutrition Assistance Program (also known as SNAP or food stamps)
• Housing assistance

If you receive any of these benefits, they may be endangered if your savings are above certain limits. The advantage of an ABLE account is that the money saved is not counted when deciding if you qualify for new or continued federal public benefits like those discussed here. You can contribute up to $14,000 each year to your ABLE account without the savings affecting your benefits. Family members, friends and others can also contribute to the account to help you save money to pay for disability-related expenses.

Still have questions about ABLE programs or the Ticket to Work program?

To learn more about the ABLE Act and how ABLE accounts may help you save money, check out the ABLE National Resource Center.

Our free, monthly WISE webinars cover a variety of Ticket to Work (Ticket) program and Work Incentive topics. Register and attend the webinars regularly for Ticket program updates and to find out how Social Security and the Ticket program can help you along your career path.

Join us for our next WISE webinar on Wednesday, April 26, 3 to 4:30 p.m. ET. Ticket to Work: Working with a Federal Contractor will explain what recent regulation changes mean to Social Security beneficiaries, offer tips for self-identification of a disability during the application and hiring process, and tell you how your employment team can help. Register now to attend this free event!

If you missed last month’s webinar or would like to catch up on past events, check out the WISE archives for webinar materials and transcripts.