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New Federal Law Aid Persons with Disabilities ABLE ACT Becomes Law

By: Anthony J. Lamberti, Esq., Chairman, Elder Law Committee


Achieving a Better Life Experience Act (ABLE ACT)

On December 19,2014 President Obama signed into law the Achieving a Better Life Experience Act (ABLE ACT) with significant bipartisan support. The intent of this Act is to solve the problems individuals face in finding and holding employment and living independently because their access to certain safety net programs can be lost once they establish a minimum level of savings and income creating a disincentive to work.

The ABLE ACT encourages individuals to save private funds to support individuals with disabilities to maintain health, independence and quality of life.

In order for a person to be beneficiary of an account under the ABLE ACT, they must have evidence of disability (i.e., SSD, SSI or some other determination) and the disability must have commenced before the beneficiary attained the age of 26 years. These ABLE accounts are modeled after current Section 529 college savings accounts.


  1. Contributions into an ABLE account could be made by any person;
  2. Contributions are not tax deductable;
  3. Income earned by accounts would not be taxed;
  4. Account withdrawals, including portions attributable to investment generated by the account, fir qualified expenses are not taxable;
  5. Individuals would be limited to one ABLE account and total annual contributions by all individuals to any one account could be made up to the annual gifting exception ($14,000 in 2014);
  6. Aggregate contributions to an ABLE account are subject to an overall limit matching the State limit for Section 529 college accounts;
  7. Individuals with an ABLE account could maintain eligibility for means tested benefits, ABLE account balances and withdrawals are completely excluded for the purpose of Medicaid and other benefits programs. In SSI situations, the first $100.000 is excluded from counting as a resource, as are most account withdrawals.
  8. Upon the death of the ABLE account beneficiary, any amount remaining in the account is subject to Medicaid payback. If any funds remain after Medicaid payback, the remainder thereof is paid to a designated beneficiary or the beneficiary’s estate and subject to income tax on investment earnings.


The ABLE Act is an additional tool to aid in planning for a person with a disability while keeping eligibility for means tested governmental benefits.


On December 19, 2014, President Obama signed into law the National Defense Authorization Act. Included in this Act was an amendment titled the Disabled Child Military Protection Act was an amendment titled the Disabled Child Military Protection Act (DCMPA). The purpose of the amendment is to enable veterans who invest in the Survivor Benefit Plan to transfer benefits, upon death, to a Supplemental Needs Trust (SNT) for their disabled or special needs child.

The need for the DCMPA is to correct the problem of returning military members who participate in the Survivor Benefit Plan (SBP). The SBP is a benefit military members can choose at the time of retirement allocating a portion of their monthly retirement benefit to provide (after their death) a monthly survivor benefit to their spouse or child. The prior law only permitted these payments to go directly to the recipient (child) and could be counted as income or resources for Medicaid or SSI thereby rendering the child ineligible for governmental benefits.

This amendment allows the SPB payment to be placed in a SNT for the disabled child of a deceased military veteran thereby maintaining eligibility for means tested governmental entitlements.

A mandatory requirement of the bill is the use of a first party SNT which requires a Medicaid payback provision when the beneficiary of the SNT dies.

The enactment of these bills has created additional options for families to provide for their disabled or special need child or children.

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