The Stephen Beck, Jr., Achieving a Better Life Experience Act (ABLE Act) is a tax-advantaged savings account used by an individual eligible for Medicaid or other public benefits to pay for “qualified disability-related expenses” and established by an individual whose blindness or disability resulted from a condition that began before the individual’s 26th birthday.

The ABLE Act permits 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. 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 and state benefit programs. Money saved in an ABLE account will not affect an individual’s eligibility for needs-based benefits as long as the account balance is less than $100,000. Upon the death of the blind or disabled beneficiary, funds remaining in the ABLE account, after payment of all outstanding expenses, must be used to reimburse the State(s) for Medicaid benefits received by the beneficiary,

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 and 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 March 13, 2020, the Social Security Administration (SSA) clarified that food is considered a “qualified disability expense” from an ABLE account.

9. Housing expenses. Housing expenses for purposes of an ABLE account are similar to household costs for in-kind support and maintenance purposes. However, for ABLE purposes, food is considered a qualified disability expense (basic living expense), but not a housing expense.

The new rules issued by SSA are attached here – SSA POMS_ SI 01130.740 – Achieving a Better Life Experience (ABLE) Accounts – 03_13_2020

For additional information about the ABLE act and ABLE accounts, see prior articles on my blog.

For additional information concerning special needs trusts and disability planning, visit:

NJ Special Needs Trusts and Disability Planning

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