Senior woman in wheelchair with younger woman crouching next to her and smiling.

Achieving a Better Life Experience Act (ABLE)

by Jadranko Tomic-Bobas, Managing Hotline Attorney

Individuals with disabilities face significant challenges and obstacles in life. Employment and living independently are among the major challenges. Further, individuals with disabilities can only have a limited amount in assets at any given time in order to maintain eligibility for certain safety-net programs. Therefore, a disincentive to work and more importantly to save exists in the system.  

The Achieving a Better Life Experience Act (ABLE) was signed by President Obama on December 19, 2014, with enormous bipartisan support. Michigan subsequently enacted its ABLE act, which was signed into law by Lt. Governor Brian Calley in October 2015.

The ABLE program allows families and individuals to fund a special savings account for certain people with disabilities for disability related expenses without losing eligibility under SSI, Medicaid, SNAP, and other public benefits. The ABLE account can be used for “qualified disability expenses,” which can include expenses for: education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention, and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses; and other expenses as approved by the Treasury Secretary.

However, ABLE accounts are not without drawbacks. Some of the drawback are annual contribution limits, and the beneficiary may have control over the account and there is a risk that the account will be used for something other than a qualified expense. Therefore, other instruments such as a special needs trust or a pooled trust, such as Elder Law of Michigan’s Pooled Account Trust, should be evaluated.

Currently, the Michigan ABLE program is not open for enrollment. Once ready, the program will be administered by the Michigan Department of Treasury. Most likely, Michigan will not have the program ready for at least a year. Individuals looking to open an ABLE account are limited, as the only states that offer ABLE accounts to Michigan residents are Ohio, Tennessee, and Nebraska.

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