Bill Reintroduced to Greatly Expand Eligibility for ABLE Accounts

More than six million people whose disabilities arose later in life will be able to open ABLE savings accounts if a bill just reintroduced in Congress, the ABLE Age Adjustment Act, becomes law.

In 2014, Congress passed the Achieving a Better Life Experience (ABLE) Act, which created a new form of tax-free savings account for people with disabilities and their families to set money aside for disability-related expenses. Simpler to set up than traditional trusts, ABLE accounts allow people with disabilities to save up to $100,000 in an account without jeopardizing their eligibility for Supplemental Security Income, Medicaid, and other government benefits.  More than 82,000 ABLE accounts have been established since the Act’s passage.

However, ABLE accounts are currently limited to people whose disabilities arise before the recipient turns age 26, effectively excluding millions of people with chronic conditions or traumatic life events that occurred in their middle years. Veterans are particularly affected by this limitation.

Raising the onset age above 26 has been a top priority for disability rights advocates for years. The ABLE Age Adjustment Act, which would allow ABLE accounts to be opened by people whose disabilities arose prior to age 46, was first introduced in Congress in 2016.  Versions of the bill have been introduced each year since then.  The measure was again reintroduced in both the House and Senate in February, 2021 (S. 331 and H.R. 1219).  Supporters are hopeful that this will be the year that the bill finally becomes law.

If it passes and is enacted into law, the National Disability Institute estimates that an additional 6.1 million people would be eligible to open ABLE accounts, according to a March 2 letter signed by dozens of disability advocacy groups under the umbrella of the Consortium for Citizens with Disabilities (CCD).

“Passing the ABLE Age Adjustment Act would nearly double the currently eligible population and improve the sustainability of ABLE programs nationwide,” the CCD wrote. “Most importantly, this bill would enable otherwise-eligible people with a variety of later-onset disabilities (many of whom spent years advocating for the original ABLE Act) to realize the benefits of the ABLE accounts to increase their financial security without jeopardizing their much-needed public benefits.”

“There are many people who become disabled after age 26 who deserve the opportunity to achieve greater financial independence and self-reliance,” Kandi Pickard, president and CEO of the National Down Syndrome Society, said in a news release. “In addition, the legislation will reduce costs and fees associated with administering state ABLE programs and make them more affordable for all beneficiaries.”

Click here to read the full Senate bill.

For a directory of state ABLE programs, click here.