Individuals granted SSDI/SSI benefits on the basis of a detailed medical records review automatically qualify for an ABLE account.

2. The Federal government’s Social Security Disability Insurance benefits a number of
Americans. Applicants are granted this insurance payment on the basis of a stringent
medical records review to establish disability. The SSDI (Social Security Disability
Insurance) program does not put a ceiling on the applicant’s or his/her spouse’s unearned
income or the amount of assets though the SSI (Supplemental Security Income) has set a
limit as regards income and resources. However, the social security administration puts a
limit on the amount of money a beneficiary can earn through work when receiving SSDI.
This leads us to the thought whether Americans should think more seriously about
investing in disability insurance.
Americans Underestimate the Risk of Disability
When you think of disability, the things that come to mind immediately are accidents and
workplace injuries. However, it is estimated that around 90% of disabilities are caused by
a health condition or illness such as arthritis, cancer or back pain. An Anthem survey
points out that when it comes to protecting themselves and their families, 90% of
Americans think it more important to lock their doors and windows while only around
40% have disability insurance that could ensure them monetary protection in case they
become disabled and are unable to work. Every year, May is observed as the disability
insurance awareness month in America with a view to encouraging people to consider
that though disability may seem unlikely it is more common than people think. The sad
truth is that most people underestimate their risk for disability. The Centers for Disease
Control and Prevention (CDC) highlights the fact that in the United States, one out of
every five adults has a disability. Their statistics shows that more than one in four of
today’s twenty-year-old people will become disabled before they retire. Any kind of
disability can prove detrimental to a person’s physical, emotional and financial health.
The “ABLE” Solution
Achieving a Better Life Experience – that is what ABLE stands for. It is a new type of tax-
advantaged savings account established by the Congress that is designed to support
disabled individuals and their families. With this account, people can save money to help
pay for their expenses without foregoing their eligibility to receive federal assistance.
ABLE accounts can be created following the ABLE Act of 2014 and passage of state
legislation.
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3.  The money in an ABLE account can be used to cover education, medical and dental
care, transportation and housing expenses among other expenditure.
 The beneficiary is the account owner, but contributions to the account can be
made by anyone with post-tax dollars. Contributions to this account are not tax
deductible; they are exempted from the federal gift tax.
 The income earned by these accounts will not be taxed and money withdrawn from
them is tax free provided they are used for qualifying expenses.
 People with significant disabilities can open ABLE accounts as long as those
disabilities existed before the age of 26.
 Applicants meeting the age criteria and who are already receiving SSI or SSDI
benefits, automatically qualify. Those who do not receive SSI or SSDI will also be
eligible provided that they meet certain criteria and also produce a physician’s
letter certifying those criteria.
 Only one ABLE account is allowed for each eligible individual.
 There is a ceiling on the total contribution to this account -- $14,000 a year though
the total amount that can be contributed over the life of the account is determined
by each U.S. state, which is $300,000 in many states.
 Applicants can enroll in a program in their own state or any other program that
accepts residents from other states.
Similar to the tax-free 529 accounts that are used to save money for college
education, ABLE accounts are a great option for people living with a disability. It helps
to cover the costs related to bringing up a child with significant disability or the costs
related to a working age adult who has disabilities. An ABLE account is unique in that it
allows the beneficiary and family more control and choice over the account. The cost
of establishing this account will be much less than a Pooled Income Trust or a Special
Needs Trust (SNT). Along with a Trust program, an ABLE account will be a very useful
option for many families.
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