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ABLE Act allows the disabled to save while staying on SSI

In order to qualify for government assistance programs such as Supplemental Security Income, disabled individuals must meet a means test which holds, in part, that recipients cannot possess more than $2,000 in cash savings, retirement funds and other items of noteworthy value.

Because disabilities can be so financially burdensome, the means test puts disabled individuals and their families in a very difficult position. In order to keep the government benefits they depend on, they cannot save money for future expenses or retirement, essentially requiring them to stay poor.

Special needs or pooled trusts can be created to allow money to be saved for a disabled beneficiary while the beneficiary remains eligible for government benefits, but these options can be confusing and expensive to create.

Congress decided that there had to be another solution to help meet the extra expenses associated with living with a disability, and last month the Achieving a Better Life Experience, or ABLE, Act was signed into law by President Obama.

Starting in 2015, individuals with disabilities will have the option to open special savings accounts where they can store away up to $100,000 without potentially losing eligibility for SSI and other government programs.

The ABLE Act also allows these individuals to still qualify for their Medicaid coverage, which is also dependent on qualifying for the means test.

In order to qualify for an ABLE account, an individual must have a disabling condition that occurred before the age of 26. The funds in the account must be used for a "qualified disability expense," which refers to an expense that occurs as a result of living a life with disabilities.

It is expected that up to 5.8 million individuals and families could qualify for an ABLE account. Though before the accounts can be created, each state must first put its own ABLE regulations in place.

To read more about the specifics of ABLE accounts, see the National Down Syndrome Society's ABLE Act Overview.

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