Benefits of ABLE Accounts for People with a Developmental Disability

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For most people, federal stimulus payments have provided a welcomed and much-needed injection of funds during the challenging COVID-19 pandemic. However, for people with intellectual and developmental disabilities (IDD), and those who love them, the stimulus payments may cause concern that the additional income will threaten eligibility for critical programs. 

Living with a disability can be very expensive. Medical costs, equipment, additional services and programs all add up. The Achieving a Better Life Experience (ABLE) Act recognizes the financial strains of living with a disability by allowing certain individuals the opportunity to save and fund qualified expenses without threatening their eligibility to critical benefits, such as Medicaid and Supplemental Security Income (SSI).

Here is some essential information about ABLE accounts that may help you determine if an ABLE account is right for you and your loved one:

  • Eligible individuals are U.S. citizens or legal residents who developed the onset of their qualifying disability before the age of 26.
  • Both physical and mental disabilities may qualify someone for the program. Here is a List of Compassionate Allowances Conditions from the Social Security Administration that qualify.
  • An individual is allowed only one ABLE account.
  • All earnings from the account remain untaxed if the money from the account is used for qualified disability expenses.
  • Qualified disability expenses include such things as: health and wellness, education and training, housing, basic living expenses, assistive technology and legal expenses.
  • Family and friends can contribute to someone’s account up to the federal gift tax limit, which is $15,000 through 2020.
  • If your loved one works and does not contribute to an employer-based savings plan such as a 401(k) or 403(b) program, he may be allowed to contribute an additional amount each year to his ABLE account.
  • Up to $100,000 in an ABLE account is exempt from the Supplemental Security Income (SSI) asset limit and even if that level is reached, the beneficiary will continue to be eligible for Medicaid.
  • An ABLE account can be used instead of, or together with, a supplemental needs trust to maintain a beneficiary’s eligibility for SSI.
  • Various types of ABLE accounts are offered by different states, and people can choose the account that works best for them, not limited to their own state’s version.

An ABLE account can be a great way to save for unexpected expenses and empower individuals to save for their dreams. As is typical with financial programs, there are many details associated with an ABLE plan. Check out for more information and support options.

Want further reading on this topic? See our article on ABLE account contribution limits or learn more about how AbleLight can help you or your loved one through our Financial Services.