ABLE Act: What You Need to Know
Reading Time: 2 MinutesLast Updated: December 17, 2020
On December 19, 2020, we celebrate the sixth anniversary of the Stephen Beck, Jr. Achieving a Better Life Experience (ABLE) Act, which allows eligible people with disabilities to create tax-free savings and investment accounts. On November 19, 2020, the Internal Revenue Service released final ABLE regulations.
The ABLE Act enables people with disabilities to have savings accounts while receiving benefits. Prior to the availability of ABLE accounts, saving money proved challenging for many people living with a disability because programs often have income and resource limits. People with disabilities, have on average, 28% more costs associated with disability-related expenses than those who do not have a disability. ABLE plans allow people to save for those extra costs associated with having a disability, while maintaining public benefits, such as SSI and Medicaid.
Since the first ABLE program opened in 2016, ABLE account holders have saved over $550 million—with more than $100 million spent on disability-related expenses. As of the third quarter of 2020, over 75,000 people with disabilities had opened an ABLE account, with an average of over $6,000 saved and invested in each account. Those numbers demonstrate the ability of ABLE account owners to save for their future needs.However, less than one percent of ABLE-eligible individuals have opened an account.
ABLE accounts can provide funding for qualified disability expenses that supplement, but do not replace, benefits otherwise available through private sources, employment, public programs, or other sources.The Internal Revenue Service (IRS) does not restrict the usage of the ABLE funds, leaving it open to items or services that relate to the unique needs of each individual, including those related to COVID-19.
Individuals eligible for ABLE accounts may need assistance opening their account and understanding how to get the maximum benefit from it. The IRS authorizes a priority of order, regarding who may open an account on behalf on an eligible individual:
- A person selected by the eligible individual.
- An agent under a power of attorney, conservator, or legal guardian.
- A spouse, parent, sibling, or grandparent.
- A representative payee (individual or organization).
An account opened by a representative payee that we appoint must meet all of the Social Security account rules and requirements.
ABLE accounts promote independence for people with disabilities. Please review the ABLE National Resource Center summary to read more highlights from the final regulations.
There are 45 ABLE plans available and their savings/investment limits range from $235,000 to $529,000. To learn about ABLE accounts and the ABLE plans available to choose from, please visit the ABLE National Resource Center at www.ablenrc.org, managed by the National Disability Institute.
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Tags: Disability, General Information, representative payee
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Can anyone on disability open an ABLE Account. Or you have to be totally disabled under a caregiver?
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Thomas C.
I appreciate every writer creating clarity of this and other U.S. Government publication. Beat the lip-flapping and belly-aching of elected or appointed term-limited officials remarks to mostly profit driven media outlets. As Supreme Justice Gorsuch stated on Firing Line 12/19/20 – he and all other government departments are there to benefit everyone according to our Constitution and review inclusiveness of any law covering our citizens; not to legislate. Civility and knowledge of American History and Civic is a shared responsibility of everyone living in the USA to maintain our Republic to continued as a free and respected Nation.
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Aboobakar D.
I hope this will help millions who were keeping cash instead of saving accounts.
How can a disable be assured of Funeral expenses be paid from this kind of saving account? Send reply to abubakardurvesh@gmail.com plz
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I am glad to hear about this happening.please keep me informed
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