ABLE accounts are savings accounts for disabled individuals. They are a product of the Achieving a Better Life Experience Act of 2014 (ABLE Act). The income from ABLE accounts is not taxed.
How Do ABLE Accounts Work?
Most of the public benefits that people with disabilities and their families depend on for food, health care and housing, like Social Security Income (SSI), Social Security Disability Insurance (SSDI) and Medicaid, are not eligible to individuals with more than $2,000 in savings. These programs require that the disabled remain below the poverty line to remain eligible for benefits. However, this can negatively impact the lives of people with disabilities, because of the high cost of living that the disabled and their families face.
The ABLE Act recognizes that public benefits often fail to cover necessities, such as employing a caregiver or making your home and vehicles accessible. Therefore, ABLE accounts were created to cover the costs of living that public benefits do not. The way ABLE accounts help is providing the disabled with a savings account that will not affect their eligibility for public benefits. ABLE accounts provide tax-free income to supplement benefits that people with disabilities receive from private insurance, SSI, SSDI and Medicaid.
We will go into further detail about how ABLE accounts work, including eligibility and deposit limits, next month. To learn more about disability benefits, such as ABLE accounts, continue to follow our Tulsa disability attorneys’ blog, and visit our Twitter and Facebook pages.