December 19, 2024, marked the tenth anniversary of the Stephen Beck, Jr. Achieving a Better Life Experience (ABLE) Act. It allows eligible disabled people to establish savings and investment accounts. ABLE investment growth is neither taxable or countable income if the funds are used to pay for qualified disability expenses (QDEs).
A qualified disability expense can include costs related to housing, healthcare, food, and education, among other things. Since the inception of the ABLE program in 2016, account holders have saved more than $2 billion in assets. As of 2024, over 187,000 disabled people had opened an ABLE account. Each account contains an average of more than $11,600 in savings and investments.
I’ve used funds in my ABLE account to pay for vehicle repairs, college tuition, and rent. Having the ability to save money without losing my benefits is a relief. In July, I used some of my ABLE account funds to fix the air conditioner in my wheelchair van.
ABLE users can choose from a variety of alternatives with varying saving/investment limitations to help them save for their own needs. Despite this, just about 3% of ABLE-eligible people have created an account. According to research, the most significant barrier to participation is a lack of information about ABLE.
Contributions to ABLE accounts are subject to yearly and cumulative limits, and they are considered gifts for federal gift tax purposes. Contributions to an ABLE account do not replace benefits provided by private insurance, Medicaid, SSI, Social Security Disability Insurance (SSDI), the beneficiary’s job, or other sources. Instead, the funds supplement these benefits, which is advantageous for ABLE account participants. ABLE accounts may provide savings, checking, and investing alternatives.
In 2022, Senator Bob Casey passed the ABLE Age Adjustment Act, which expanded ABLE account eligibility to anyone who is disabled before the age of 46. Casey and Sen. Eric Schmitt, a Republican from Missouri, have presented the Ensuring Nationwide Access to a Better Life Experience Act, or ENABLE Act, which would expand the benefits of ABLE accounts for disabled people and their caregivers. The bill was forwarded to the Senate’s finance committee in June.
Currently, a person’s disabilities must have began before the age of 26, though an ABLE account can be opened at any age. On January 1, 2026, the ABLE Age Adjustment Act will broaden eligibility to include those with disabilities that begin before the age of 46. This expansion will make an additional six million people eligible for ABLE accounts.
Some people might need support in opening and managing their accounts, as well as achieving their financial goals. The IRS provides a prioritized list of people who can open an account on an eligible individual’s behalf, beginning with the individual themselves and including legal representatives, family members, and representative payees.
Accounts opened by SSA-appointed representative payees must adhere to all Social Security account rules and regulations. ABLE accounts encourage independence and financial stability by allowing disabled people to save and plan for their basic needs while still receiving and maintaining crucial benefits.
Sources:
Diament, Michelle. “On Capitol Hill, Key Disability Champions Set to Depart.” Disability Scoop, Disability Scoop, 2 Dec. 2024, http://www.disabilityscoop.com/2024/12/02/on-capitol-hill-key-disability-champions-set-to-depart/31186/.
Ellis, Jody, et al. “Able Act – 10 Years of Progress for People with Disabilities.” The Social Security Administration , The Social Security Administration , 19 Dec. 2024, blog.ssa.gov/able-act-10-years-of-progress-for-people-with-disabilities/.
“How Can Funds Be Used?” ABLE National Resource Center, ABLE National Resource Center, 10 Feb. 2021, https://www.ablenrc.org/get-started/what-can-funds-be-used-for/.
Luterman, Sara. “A Disability Policy Champion’s Time in Congress Has Come to an End.” The 19th, The 19th, 22 Nov. 2024, 19thnews.org/2024/11/bob-casey-disability-policy-concedes-pennsylvania-senate-seat/.