La ABLE Account
The Louisiana Achieving a Better Life Experience (La ABLE) is a savings program enacted in 2014. This program is designed to help individuals with disabilities put aside money to pay for qualified disability expenses. These accounts provide an opportunity to save and invest with tax-free earnings to help participants maintain independence and quality of life. The money deposited into this account was disregarded when determining eligibility for federal benefit programs, such as Medicaid and Social Security.
The ABLE Act grew out of an idea from several parents from the Down Syndrome Association of Northern Virginia around a kitchen table, who identified the injustice that existed in the system as it relates to the ability for individuals with disabilities and their families to save for the future. These parents/advocates were instrumental in bringing the idea of ABLE into an actual piece of legislation.
After eight long years, the Achieving a Better Life Experience (ABLE) Act, now known as the Stephen Beck Jr. ABLE Act passed! Stephen E. Beck Jr., vice chairman of both the National Down Syndrome Society and the Down Syndrome Association of Northern Virginia Board of Directors was one of those parents at that kitchen table in Virginia. It was his idea to find a way to help his daughter who had down syndrome save for her future without losing her services.
The primary purpose of the ABLE Act is to encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life.
La. ABLE is administered by the Louisiana Trust Authority (LATTA) through the Board of Regents, and the Office of Student Financial Assistance (LOSFA). LOSFA is responsible for receiving, investing, and disbursing public funds, and managing all investments. These funds will be managed similarly to the other program managed by LOSFA, the college savings (529) plan.
Individuals can participate in the savings program and still receive public assistance & benefits. The cost of raising a child with a disability is not always covered by private insurance, Medicaid or Medicare. These accounts will supplement benefits provided through public assistance and state benefits and further the individual’s independence.
Tax-Free Earnings
The earnings you make on your La ABLE Account are not subject to federal income taxes, as long as you spend the earnings on Qualified Disability Expenses.
State Tax Deduction
At this time Louisiana has not agreed to participate in this tax deduction. Please check with your state taxation agency or financial planner for more information or updates on Louisiana’s state tax benefits.
Keep Your Public Benefits
For the first time in public policy, the ABLE Act recognizes the extra and significant costs of living with a disability. One of the primary reasons that the federal ABLE Act was passed was to protect individuals with disabilities from losing public assistance and other benefits such as SSI or Medicaid.
As stated in federal legislation, an ABLE account will, “secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, Medicaid, SSI, the beneficiary’s employment and other sources.”
This means that your La ABLE Account funds do not count against you for purposes of determining your eligibility for means-tested federal benefits programs, such as SSI and Medicaid. However, there are limits with the SSI program.
Limited Impact on SSI Benefits
There are some limits on how much you are able to save in the account before it affects your eligibility for SSI. If you acquire more than $100,000 in your account, your SSI benefits may be suspended. SSI will treat anything over $100,000 as a countable resource when determining your eligibility for SSI benefits.
This does not mean that you become ineligible for SSI, just that your benefits will be suspended until the balance decreases below $100,000.
At this time, money that is withdrawn for housing expenses and not used immediately can affect your SSI benefits. It is important that you not withdraw for housing expenses too far in advance of your using the funds. For example, if you have rent that is due by the 10th of the month, make sure you withdraw the funds in that calendar month and not before. As long as the withdrawal and the expense for housing happen in the same calendar month you should not have a problem.
An “Eligible Individual” is someone who developed their disability before the age of 26. The individual must have been living with their disability for at least one year, or they must expect their disability to last for at least a year.
In addition, the individual must meet at least one of the following criteria:
- Be entitled to Supplemental Security Income (SSI) because of their disability;
- Be entitled to Social Security Disability Insurance (SSDI) because of their disability;
- Have a condition listed on the Social Security Administration’s List of Compassionate Allowances Conditions; or
- Be able to “self-certify” their disability and diagnosis (see details below) when opening a La ABLE account.
“Self-certification” simply requires an individual to agree to the following statements during enrollment:
- The individual has a written, signed diagnosis from a licensed physician (note: individuals do not have to provide us with a copy of the diagnosis during enrollment, but a copy of the diagnosis must be available upon request); and
- The individual is either:
- (1) blind, within the meaning of the Social Security Act, or
- (2) has a medically determinable physical or mental impairment that results in “marked and severe functional limitations”
Proving Eligibility
Our process is entirely online. You will be asked a series of questions when you open your account. If you are self-certifying your disability, you will need to provide your doctor’s name and address, and the date of your diagnosis. You will need to produce a copy of your diagnosis in order to open an account, you must have a record of the diagnosis readily available.
For more information, visit La ABLE or The Arc of Louisiana FAQ on the ABLE Account.
