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Changes to the ABLE Act

The federal government passed the Achieving a Better Life Experience (ABLE) Act in December 2014. The ABLE Act allows the family of a disabled person to create a federal income-tax-free account to be used for the medical expenses of the disabled individual. This law was created under the same provisions of the tax code as 529 plans for college savings. According to Autism Speaks, the National Disability Institute estimates that there are 58 million individuals in the United States who have a qualified disability.

The ABLE Act account beneficiary must be deemed to be disabled before the age of 26. A person with a disability can save up to $100,000 without affecting their Social Security or other government benefits they may receive. Additionally, an individual’s Medicaid eligibility will not be affected by the funds in the account.

According to Disability Scoop, dozens of disability advocacy groups are in opposition to legislation to expand the ABLE Act. These groups believe that the changes to the act would not go far enough. In September 2016, the United States Senate Committee on Finance approved two bills, which provide additional flexibility to those with a qualifying ABLE account.

The ABLE to Work Act allows a disabled person who is employed to save more money in their account each year, and the ABLE Financial Planning Act allows money saved in a 529 college savings plan to be rolled over into an ABLE account for a person with a disability. In the original legislation, a limitation due to the age of onset did not exist. According to Chris Rodriguez at the National Disability Institute, the addition of the age restriction left out a lot of people who advocated for the ABLE Act for many years.

Many advocacy groups were under the assumption that the age concern would be addressed before already eligible individuals received additional benefits. According to Autism Speaks, organizations such as the Autism Society, United Cerebral Palsy, and National Down Syndrome Congress, among others, are pledging to oppose some ABLE bills.

Currently, there are four states offering programs where ABLE accounts are available. According to Autism Speaks, “accounts created through programs in Nebraska, Ohio and Tennessee are available to individuals nationwide and Florida’s program offers accounts to residents of the state.” By the end of this year, 15 more states are expected to offer ABLE accounts.

The experienced attorneys at Hobson-Williams, P.C. are available to assist you with your concerns relating to the professional care of disabled or elderly loved ones. For more information, contact our knowledgeable New York Elder Law attorneys at (718) 210-4744 to schedule an appointment.