ABLE accounts have been providing something that’s been a rarity in the lives of disabled people, a way to save without risking the benefits they need. Established through the Achieving a Better Life Experience Act in 2014, ABLE stands for “Achieving a Better Life Experience,” and the accounts provide a place for qualified beneficiaries to put up to $100,000 without losing their Supplemental Security Income benefits.
Any amount of ABLE savings up to the limit which varies depending on the state, will not affect eligibility for SSDI, HUD housing assistance, SNAP, FAFSA, Medicare (Parts A, B, C, and D), Medicare Savings Programs, Extra Help, or any Medicaid benefit, including Medicaid waiver services.
The money in the ABLE accounts can be used for a variety of qualified disability expenses, from educational needs and healthcare and transportation, and housing. The interest earned on the accounts is tax-free.
A new policy affecting who will get access to the accounts will go into effect in 2026. Starting next month, eligibility will cover all who were diagnosed with their disability before the age of 46, which is an improvement from the initial cap of the age of 26. As estimated by The National Disability Institute estimates that the number of people eligible for ABLE accounts is estimated to jump from 8 million to 14 million.
Even with this change, ABLE accounts have rules and regulations that account holders must adhere to. Contributions are limited both on an annual and a cumulative basis, and the money deposited is considered a gift for federal tax purposes. States also administer their own ABLE programs, meaning fees can vary depending on where someone lives. In Michigan, MiABLE accounts, for example, carry a $45 annual maintenance fee.
It is also important for account holders to be aware of what may happen if they use their ABLE funds on unqualified expenses. While it is legal to use ABLE funds on items that do not qualify as a qualified disability expense under IRS standards, it is also accompanied by certain tax penalties. The amount withdrawn on unqualified expenditures will be treated as income, and on top of that, a 10% federal tax penalty will be imposed on it in some situations, including those related to benefits of the month in which the unqualified withdrawal occurred.
Disability advocates pushed for a broader range of eligibility for many years, knowing that the original age limit excluded millions whose disabilities started late in their lives. Veterans, people with chronic illness, and others with injuries and diagnoses as adults-many couldn’t access ABLE accounts The new threshold acknowledges a reality long backed by advocates: disability can happen to anyone at any time in his or her life.
The expansion represents a new era of ABLE accounts. It represents the ability to save without the fear of losing vital benefits. It’s an example of the impact of advocacy as a catalyst that can create change in society.
In January, the options are expanded. More individuals will be able to start saving, invest in their future, and experience life with a little more security and a little less anxiety over money. The availability of ABLE accounts is more than a change in legislation; it is a powerful move towards becoming a financially inclusive community for millions of people with disabilities.
ABLE accounts should be seen as a stepping stone. Disabled people should be able to save and spend their money as nondisabled people do. Being disabled shouldn’t mean being forced into poverty or following antiquated rules. Until then, ABLE accounts remain both a tool and a reminder of the work still ahead in the fight for economic justice and disability rights.
Sources:
Diament, Michelle. “New Year Brings Big Changes for Able Accounts.” Disability Scoop, Disability Scoop, 18 Dec. 2025, http://www.disabilityscoop.com/2025/12/18/new-year-brings-big-changes-for-able-accounts/31784/.
“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/.
Kelly, Annemarie, and Lewis Hershey. ‘A 50-State Review of ABLE Act 529A Accounts’. Journal of Financial Service Professionals, vol. 72, no. 2, 2018.