NY ABLE allows families of those with disabilities to plan for future

The NY ABLE 529 Plan was created to help families find a better way to afford expenses related to disabilities. It is similar to the successful 529 College Savings Account program, and allows people to open a tax-advantaged savings account that individuals with disabilities and their families can use to pay for qualified expenses. 

In order to open an ABLE account, you must be an eligible individual, a parent or guardian of a qualified individual, or an individual with the power of attorney representing the eligible individual. Eligible participants must have a disability that was present before age 26 and live in New York state. If individuals don’t have Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) benefits, they must instead have a disability listed on the Social Security Administration’s list of “Compassionate Allowance Conditions,” have a written diagnosis from a physician stating that they have a disability, or be classified as blind.

Under the program, the funds saved in the account can be spent on expenses related to the eligible individuals’ disability and should help improve their quality of life, maintain their health, or develop their independence. This includes expenses related to education, housing, transportation, employment training and support, assistive technology and personal support services, health, financial management, legal fees, funeral and burial expenses, and other expenses approved by the U.S. Treasury.

Once enrolled, individuals or families can put up to $15,000 a year in the account. One of the most important benefits of the ABLE accounts is that the first $100,000 saved in the account is not treated as a personal asset and is therefore exempt from Medicaid and supplemental income-eligibility requirements. This is a massive advantage to families who rely on Medicaid for health care and other government benefits such as SSI. Generally, there are monetary limits on personal assets to qualify for these programs. Having a savings account through this program won’t affect aid through assistance programs like Medicaid and SSI. The account also grows tax deferred, which means that any money earned in the account is not taxable income.

One of the biggest concerns that parents of children with disabilities have is providing for their children into adulthood. In many cases, parents are the primary caretakers and many worry about their child’s future without them. This type of account can help with long-term planning, which can serve to give families some peace of mind for the future. 

The creation of the savings account program passed unanimously in both the New York State Assembly and Senate and was signed into law by Gov. Andrew Cuomo on Dec. 22, 2015. The enacting legislation required the state comptroller to establish the new savings-account plan in consultation with the Office for People with Developmental Disabilities, Office of Mental Health, Department of Health, and Office of Temporary and Disability Assistance. To learn more, visit the state comptroller’s site at https://www.osc.state.ny.us/savings/able.htm.        

William (Will) A. Barclay is the Republican representative of the 120th New York Assembly District, which encompasses most of Oswego County, including the cities of Oswego and Fulton, as well as the town of Lysander in Onondaga County and town of Ellisburg in Jefferson County. Contact him at barclaw@assembly.state.ny.us or (315) 598-5185.