In December 2014, the ABLE Act was passed which allows certain people with disabilities the ability to create a tax-free savings and investment account while receiving SSI benefits or Medicaid. Both SSI and Medicaid have income and resource limits, which you can check out in my prior blog, that would preclude people from having savings over $2,000.00 for a single person or $3,000.00 for a married couple. This makes saving money while on SSI very difficult. The ABLE Act was designed to address this situation.
Since the inception of the ABLE Act in 2016, ABLE account holders have been able to save over $550 million, with over $100 million of that going towards disability related expenses. Despite this, less than one percent of all ABLE eligible individuals have opened an ABLE account.
If you are considering opening an ABLE account, the IRS allows for certain people to open an account on your behalf. Those people include a person selected by you, an agent under a power of attorney, a legal guardian or conservator, a spouse, parent, or sibling, and a representative payee.
ABLE accounts allow those on SSI and/or Medicaid to save for their futures without becoming ineligible for benefits due to being over the resource limit.
To learn more about ABLE accounts, please visit www.ablenrc.org (ABLE National Resource Center).