Congress Expands Access to ABLE Accounts by Increasing Age Limit

In 2014 Congress passed the Achieving a Better Life Experience (ABLE) Act which allows states to create tax-advantaged savings programs for people with disabilities who became disabled before they reached the age of 26. The goal of ABLE accounts is to allow people with disabilities to maintain their benefits (such as Supplemental Security Income, Medicaid, or Supplemental Nutrition Assistance) while also being able to save for larger disability related expenses, like accessible housing, assistive technology, or transportation. 

Anyone could contribute money to a person’s ABLE account, including the account owner, their family, and their friends as long as the total annual contribution does not exceed a certain limit, which is tied to the gift tax exemption. In 2023, the annual limit is $17,000. A person can have up to $100,000 in their ABLE account and any funds above $100,000 would be counted against the individual when considering eligibility for public benefits. 

The reality of this meant that a 32 year old who was born with a disability and uses attendant services could maintain their eligibility for Medicaid while also saving for a larger disability related purchase, like a wheelchair accessible van. Another example would include a person who acquired their disability during an accident as a teenager could maintain their SSI while also using their ABLE account to save up for an accessible home. Across the U.S., there were approximately 134,000 ABLE accounts with more than $1.18 billion in assets in 2022.