Creating Savings Accounts for Disabled Family Members

Individuals with disabled family members understand the many obstacles life can put in front of them and their family, especially when it comes to finances. For many, having a permanent disability can mean being unable to provide for oneself and that can mean relying on benefits from social welfare programs to get by. However, many of these programs have strict income thresholds that can exclude potential beneficiaries if they earn too much money or have too much capital.


Fortunately, New York is one of several states that allow disabled persons and their families to create special savings accounts to help maintain the person’s health, independence, and quality of life. The New York Achieving a Better Life Experience (NY ABLE) helps supplement but not supplant benefits provided through Medicaid, SSI, SSDI, private insurance and other sources and is exempt from om tax on its earnings and distributions, provided the funds are used to pay for qualified disability expenses.


The laws creating the ABLE statute was signed into law by Gov. Andrew Cuomo in December 2015 and is federally authorized by the federal Stephen Beck, Jr. Achieving a Better Life Experience (ABLE) Act enacted on December 19, 2014, as Section 529A of the Internal Revenue Code. The NY ABLE program is administered by Office of the State Comptroller in consultation with specific State agencies and individuals appointed by legislative leaders, as specified in the NY ABLE statute.


Individuals eligible for NY ABLE are New York state residents with a permanent disability present before the age of 26, are entitled to benefits under SSI or SSDI, classified as blind under the Social Security Act, have a disability that’s included on the Social Security Administration’s List of Compassionate Allowances Conditions, or have have a written diagnosis from a physician indicating a medically determinable physical or mental impairment which results in marked and severe functional limitations that can be expected to last for at least a year.


Eligible individuals, their parent or legal guardian, or other person with a power of attorney may open an ABLE account and anyone can contribute to the account. Furthermore, the annual contribution limit is only $14,000. The funds from the ABLE account must be spent on qualified disability expenses and the account balance cannot exceed $100,000.


Types of qualified disability expenses under ABLE include education, housing, transportation, employment training, health, and legal fees. For more information on the NY ABLE program and who may qualify, visit the NY ABLE website.

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