The ABLE Act and Saving Money for People with Intellectual Disabilities?

Written by Dr. Betty Patten

The ABLE (Achieving a Better Life Experience) Act is a federal law that was passed in 2014. It allows people with disabilities to establish tax-free savings accounts (ABLE accounts) to pay for qualified expenses related to their disability. These expenses can include things such as education, housing, transportation, and personal support services. The money in the account can be used to supplement, but not replace, benefits provided through private insurance, Medicaid, or other government programs.

The ABLE Act allows individuals with disabilities to save money without losing their eligibility for benefits such as Supplemental Security Income (SSI) and Medicaid. Prior to the ABLE act, people with disabilities were limited in their ability to save money without risking their eligibility for these benefits.

To be eligible to open an ABLE account, an individual must have become disabled before the age of 26. Once an account is established, anyone can contribute to it, including the account beneficiary, family members, and friends. The funds in the account can be invested, and the account balance can grow tax-free. The funds in the account can be withdrawn tax-free as long as they are used for qualified expenses related to the beneficiary's disability.

The ABLE act has been widely recognized as a significant step forward in providing financial security and independence for people with disabilities. It allows them to save money to pay for expenses they incur because of their disability while also preserving their eligibility for government benefits.

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