Threshold Program: Information on the ABLE Act

The Achieving a Better Life Experience Act (ABLE Act) was signed into law in 2014, creating tax advantaged savings accounts for individuals with disabilities. It can be used to supplement other benefits and pay for expenses such as education, housing, transportation, employment training, supportive assistive technologies, personal support services, or health and basic living expenses.

Savings accounts through The ABLE Act function like College or Health Savings Accounts—the earnings grow tax-deferred and are federal income tax-free when used for qualified disability expenses. In Massachusetts, this program is titled the Attainable Savings Plan and is administered by Fidelity Investments.

Who is eligible?

In order to be eligible, an individual must be entitled to benefits based on blindness or disability under Title II (SSDI) or Title XVI (SSI) OR certify that they are blind, disabled, or have a condition listed on the “List of Compassionate Allowances” maintained by the SSA. The applicable blindness or disability must have occurred before the individual turned 26-years old.

What are the details?

• Accounts created through the ABLE Act have an annual contribution limit of $14,000 and an account limit of $400,000. The accounts are subject to a $30 annual account maintenance fee.
• Balances below $100,000 do not impact SSI benefits, balances over $100,000 will be counted as a resource of beneficiary and could result in suspension of SSI. Money in these accounts does not impact Medicaid.
• Money in the account may be invested in eight portfolio options, varying in risk and fee.
• Qualified disability expenses are any expenses for the benefit of the account owner in maintaining or improving his or her health, independence, or quality of life. If the funds in the account are not spent on qualified disability expense, taxes and a potential 10% federal penalty tax may be owed on earnings associated with the withdrawal.

How do you sign up?

Check with your local lender and ask if they provide Attainable Savings Plan Accounts today. The initial minimum contribution is $50.