Public Law 113–295, also known as The Stephen Beck, Jr. Achieving a Better Life Experience Act (ABLE Act), was enacted December 19, 2014. The ABLE Act provides individuals with special needs and disabilities to save money for disability related expenses in tax-free savings accounts while preserving their needs-based government benefits.

Modeled on 529 college savings plans, ABLE accounts are intended to assist individuals with disabilities and their families to save private funds to supplement benefits provided through private insurance, Medicaid, supplemental security income (SSI), employment, and other sources. Establishing an ABLE account allows beneficiaries to save money for disability related expenses while maintaining eligibility for means-tested Federal benefit programs. Money saved in an ABLE account will not affect an individual’s eligiblity for SSI (up to $100,000) and will allow the beneficiary to maintain eligibility for Medicaid and other public benefits.

In January 2016, New Jersey enacted legislation authorizing the establishment of ABLE accounts for certain individuals with disabilities. Until now, however, New Jersey residents were forced to open such accounts in other states because New Jersey had not yet implemented an ABLE account program. On June 18, 2018, the New Jersey Human Services Commissioner announced the launch of the NJ ABLE program.

A new website, NJ ABLE, has also been established.

To qualify, an individual must have become disabled prior to age 26. Total annual contributions cannot exceed the federal gift tax limit ($15,000 in 2018). Income earned by ABLE accounts is not taxed. Funds remaining in an ABLE account at the beneficiary’s death must be used to repay New Jersey for Medicaid expenses paid by the State on the account owner’s behalf.

Funds in an ABLE account can be used for ‘‘disability-related expenses.” Expenses are considered to be “disability-related” if they are related to the disability are used for the benefit of the disabled individual. ‘‘Disability-related expenses” include education; housing; transportation; employment support; health and wellness costs; assistive technology and personal support services; and other expenses.

On June 19, 2018, the Star-Ledger newspaper published the following article on the implementation of the new ABLE account program in New Jersey:

Download (PDF, 162KB)

The Star-Ledger article referred readers to the National ABLE Alliance website for additional information: savewithable.com.

The Law Office of Donald D. Vanarelli is ready to provide information to those interested in learning how the new law works, and how the new ABLE accounts, as well as traditional special needs trusts, can provide for the special needs of persons with disabilities. Please feel free to contact our office.
For additional information concerning special needs trusts and disability planning, visit:

NJ Special Needs Trusts and Disability Planning