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ABLE Accounts are Open for Business!

This could be life-changing for your disabled loved one

For the first time, many people with disabilities (and their parents) can open special savings accounts in which they can save money (and have the use of more cash) without jeopardizing their government benefits.  Ohio, Florida, Nebraska and Tennessee have all launched ABLE accounts, based on the 2014 ABLE (Achieving a Better Life Experience) Act.

Although Massachusetts is not ready yet, Massachusetts residents can easily use the websites of Ohio, Nebraska or Tennessee to open accounts via the internet. (Florida is not accepting non-residents at this time.)  Please view the relevant websites, and a comparison chart of the four states’ programs.  Massachusetts plans to launch in 2017, at which time funds in out-of-state ABLE accounts can be transferred to Massachusetts.

Each individual may only have one ABLE account, and only $14,000 per year can be deposited into an ABLE account per beneficiary, regardless of the number of donors.  The account value, up to $100,000, will be disregarded in determining eligibility for Supplemental Security Income (“SSI”) and MassHealth.  In other words, a person can have up to $100,000 in an ABLE Account and still be considered to have less than $2000 in assets, thereby qualifying for SSI and MassHealth. Funds can be used to pay for education, health care, transportation, housing and other expenses. Interest earned on savings in the accounts is tax-free.

ABLE accounts allow parents and grandparents of children with special needs to save money for them, tax free, similar to a 529 Account for college savings for typical children. This is wonderful benefit for parents of young children, who can now save for their special needs child the same way they can save for their typical children.  Even more importantly, disabled adults can have access to cash from the accounts without interfering with their SSI benefits.  Ordinarily, any cash above $20 that an SSI beneficiary receives in a month reduces his or her monthly SSI payment, dollar for dollar.  Cash distributed from an ABLE account is not counted by SSI unless it is used for housing, and even then it is not counted if it is spent right away.  For people who has been forced to live without cash (other than their monthly SSI check) for their daily needs such as haircuts and bus fare, this benefit cannot be underestimated.

Another exciting use of an ABLE account is that trustees of special needs trusts can used them as a pass-through, to get disposable income (i.e. cash) to their beneficiaries.  Trustees can periodically distribute trust money to an ABLE account, and the beneficiary can take money out of the account with the account’s debit card.  Cash obtained from the ABLE account is not counted by SSI.  In addition, ABLE accounts can be used to hold child support money, so that the child support paid for a disabled child is not counted as the child’s money by SSI.

ABLE accounts are currently limited to individuals with disabilities that originated before the age of 26.  One caveat to the accounts is that remaining in the accounts after an account holder dies will be used to reimburse MassHealth for the money MassHealth has spent on them.

For more information on ABLE accounts and all the potentially life-changing benefits they can provide, contact Karen B. Mariscal, Esq. at

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