ABLE Accounts Arrive in MA: Helping Individuals with Disabilities Plan for their Future

For many people with disabilities in the Commonwealth, saving for the future while preserving needed government benefits such as SSI and MassHealth has been a challenge. Not anymore! On May 10, 2017, Massachusetts legislators implemented this state’s version of the Achieving a Better Life Experience Act (ABLE Act), based upon the federal ABLE Act law enacted in 2014.

Previously, a MassHealth or SSI recipient could own no more than $2,000.00 in assets in order to remain eligible for benefits, rendering saving for the future an impossibility. With the implementation of this new law, benefit recipients can now open an ABLE account at Fidelity Investments allowing them to contribute up to $14,000 per year. A maximum amount of $100,000 can be saved without jeopardizing eligibility for SSI benefits and the entire amount of the account is ignored when assessing MassHealth eligibility.  However, once the account balance reaches $400,000 no additional deposits may be made. Income earned in the account is tax-deferred and withdrawals are not taxed federally as long as the funds are used for certain expenses related to the disabled individual’s health and quality of life, such as education, housing, job training, assistive technologies, medical expenses, etc.

To qualify for an ABLE account, the disability must be diagnosed before the age of 26 and fall within federal guidelines. The disabled individual is the account owner and only a parent, legal guardian or agent under a Power of Attorney may be authorized to manage the account if the owner is unable to do so. Only one ABLE account per individual is allowed and all ABLE accounts are subject to MassHealth payback provisions.

If you are planning for the financial future of a child or grandchild with disabilities, contact the attorneys at Levine-Piro Law and we can guide you through the process. Call (978) 637-2048 or email us at office@levinepirolaw.com today.

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