Individuals with special needs and their families often face significant financial challenges. In the past, there were unavoidABLErestrictions placed on the income and assets a special needs family member could have in order to qualify for essential government benefits. But as of 2014, The Stephen Beck, Jr., Achieving a Better Life Experience Act (ABLEAct) now allows eligible special needs individuals to save money for expenses without putting their SSI and Medicaid benefits in jeopardy.
Special needs families can get more information about ABLEAct accounts by contacting the New Jersey estate attorneys at the Matus Law Group at (732) 281-0060.
What Are the Advantages of ABLEAccounts?
ABLEaccounts are savings accounts designed to assist special families to save private funds to maintain the health, independence, and quality of life for their loved ones while still maintaining eligibility for their critical government assistance. For those who have been diagnosed with a disability before the age of 26, funds saved in an ABLEaccount, up to a certain threshold and spent properly, will not affect their eligibility for public benefits for the special needs individual.
Funds in an ABLEaccount will not be regarded when determining eligibility for many government benefits, including SSI, Medicaid, Section 8 housing, food stamps, DDD, or other benefits. Deposits into the account and payments from the account allow the special needs individual independence while maintaining their benefits. In addition, any income earned on funds in the account is tax-deferred.
Who is Eligible for an ABLEAccount?
There are two specific requirements for an individual to be considered eligible to open and maintain an ABLEaccount in New Jersey. First, the person qualifying for the account must have been diagnosed with a disability by a competent health care provider before their 26th birthday. Secondly, the disability must be one that has functional limitations that are expected to last for a year or more or meet disability requirements under SSI or SSDI.
What Expenses Can Be Paid Out of an ABLEAccount?
Any distributions from an ABLEaccount must be considered qualified disability expenses, defined by the Social Security Administration as those used to maintain or improve the individual’s health, independence, and quality of life. These can include
- Employment training
- Personal support services
- Assistive technology
- Financial management
and other various costs. It’s important to understand that any distributions not considered qualified disability expenses may be subject to a 10 percent penalty at tax time and also may affect overall eligibility for critical benefits.
Limitations to an ABLEAccount
Anyone can make contributions to the ABLEaccount on the owner’s behalf. Family members and even friends can donate funds to an individual’s ABLEaccount. But there are limitations to the annual amount that can be deposited into the account on the beneficiary’s behalf as well as limitations on the total value of the account without affecting SSI and Medicaid eligibility.
Furthermore, if the special needs individual dies and leaves funds in the account, these must be used to reimburse that state of New Jersey for Medicaid payments made on the beneficiary’s behalf unless it is specifically left to an immediate family member with a disability.
Getting Skilled Legal Assistance
For families considering an ABLEaccount for a special needs family member, it is important to speak with an experienced New Jersey estate attorney specializing in special needs.
Christine Matus and her team of New Jersey special needs lawyers understand the financial needs of special needs families and help them navigate this often confusing terrain. Call them at (732) 281-0060 or through their online contact form to schedule an appointment to discuss ABLEaccounts or any special needs financial concerns.