"Able" Account Plans for the Disabled: A Government Step in the Right Direction

Millions of individuals with disabilities and their families depend on a wide variety of public benefits for income, health care and food and housing assistance. Eligibility for these public benefits (SSI, SNAP, Medicaid) require meeting a means or resource test that limits eligibility to individuals reporting less than $2,000 in cash savings, retirement funds and other items of significant value. To remain eligible for these public benefits, an individual must remain poor. For the first time in public policy, the federal and state versions of the ABLE Act recognizes the extra and significant costs of living with a disability. These include costs related to raising a child with significant disabilities or a working age adult with disabilities, for accessible housing and transportation, personal assistance services, necessary assistive technology and health care costs not covered by Medicaid or Medicare.

In December 2014, a federal law went into effect with the goal of allowing certain people with disabilities and their families to save money without losing eligibility for SSI and Medicaid. Under the law, each state can establish “ABLE” account programs outlining the process for how the law will be implemented at the local level. It’s nice to be able to say Florida is currently one of four states that have established this program for its residents.

ABLE stands for “Achieving a Better Life Experience.” Under this law, those with disabilities beginning before age 26 are allowed to save money in a “529A” savings account much like the 529 college savings account. Advocates for the disabled say the accounts are long overdue and a welcome change. Without them, it’s hard for the disabled and their families receiving means based federal and state benefits to save without running afoul of limits on the assets they can accumulate, and still qualify. For instance, to remain eligible for Medicaid health coverage or Supplemental Security Income (SSI), which assists low-income people who are disabled, a disabled person generally can’t have more than $2,000 in savings or other assets.

The money put into a Able account, however, doesn’t count toward the total assets used to calculate eligibility for SSI, Medicaid or other public benefits. So, a disabled person can begin saving for the future, or use the money for a range of disability related or educational needs, without risking the loss of government help.

Florida passed its version of the ABLE Act in February, 2015. This law allows disabled Floridians with an onset of disability before age 26 to save in a designated tax free account up to $100,000 for their (and their family’s) future needs without losing benefits like SSI and Medicaid. And, contributions to an ABLE account can be made by anyone, from the account owner to family, friends and loved ones – helping more people play a part in creating a better quality of life through financial security.

For more information about how Florida ABLE accounts work, who qualifies, and what expenses can be paid from the ABLE account, see the State of Florida’s website.