The President has signed the Achieving a Better Life Experience (ABLE) Act of 2014 into law following its approval by bipartisan majorities in both the House and Senate.
The ABLE Act provides a means of achieving financial security for some SSI and SSDI recipients and other disabled individuals. In the same way that Section 529 Qualified Tuition plans allow creation of tax exempt accounts for educational expenses, the ABLE Act allows for creation of tax exempt accounts for the accumulation of funds for individuals with disabilities and their families to meet needs connected with their disabilities.
Perhaps the most important aspect of the ABLE Act is that assets in ABLE accounts are excluded from SSI recipients’ resources in determining their eligibility to receive SSI benefits. As discussed more fully here, the law requires that SSI recipients possess less than $2,000 in resources ($3,000 for a couple) in order to receive benefits. Under the ABLE Act, SSI may accumulate their earnings in an ABLE account without jeopardizing their SSI eligibility.
More will be known about how ABLE Act accounts will work after the Treasury Department publishes regulations on their operation and the accounts are authorized by the individual states.