The Achieving a Better Life Experience Act allows individuals with disabilities to save money in a tax-advantaged account for qualified disability expenses.
Connecticut implemented the ABLE Act in 2016, providing residents with disabilities and their families the opportunity to save for the future without jeopardizing their eligibility for certain government benefits.
Benefits
One of the key benefits of the ABLE Act is that it allows individuals to save up to $100,000 in an ABLE account without affecting their eligibility for Supplemental Security Income benefits. Additionally, any funds in the account do not count as a resource for Medicaid eligibility purposes. This provides individuals with the opportunity to save for future expenses while maintaining access to important government benefits.
One note to make for anyone using this type of account is that funds remaining in the account upon the owner’s death may be subject to Medicaid reimbursement.
Qualification
To qualify for an ABLE account, individuals must have a disability diagnosis before the age of 26. After creating an account, the account owner, family members, or friends can make contributions up to the annual gift tax exclusion amount.
Usage
The funds are available for a wide range of qualified expenses. These might include employment training and support, assistive technology and personal support services. It also includes health care and other expenses that improve the quality of life for the individual.
By allowing individuals to save for qualified disability expenses in a tax-advantaged account, the ABLE Act ensures that they have the financial resources they need to lead independent and fulfilling lives.