The NY ABLE 529 Plan was created to help families find a better way to afford expenses related to disabilities. It is similar to the successful 529 College Savings Account program, and allows people to open a tax-advantaged savings account that individuals with disabilities and their families can use to pay for qualified expenses.

In order to open an ABLE account, you must be an eligible individual, a parent or guardian of an eligible individual, or an individual with the Power of Attorney representing the eligible individual. Eligible participants must have a disability that was present before age 26 and live in New York state. If the individual doesn’t have SSI or SSDI benefits, they must instead have a disability listed on the Social Security Administration’s list of Compassionate Allowance Conditions, have a written diagnosis from a physician stating that they have a disability, or be classified as blind.

Under the program, the funds saved in the account can be spent on expenses related to the eligible individual’s disability and should help improve their quality of life, maintain their health or develop their independence. This includes expenses related to education, housing, transportation, employment training and support, assistive technology and personal support services, health, financial management, legal fees, funeral and burial expenses and other expenses approved by U.S. Treasury.

Once enrolled, individuals or families can put up to $15,000 a year in the account. One of the most important benefits of the ABLE accounts is that the first $100,000 saved in the account is not treated as a personal asset and is therefore exempt from Medicaid and supplemental income eligibility requirements. This is a massive advantage to families who rely on Medicaid for health care and other government benefits such as SSI. Generally there are monetary limits on personal assets to qualify for these programs. Having a savings account through this program won’t affect aid through assistance programs like Medicaid and Supplemental Security Income (SSI). The account also grows tax deferred, which means that any money earned in the account is not taxable income.

One of the biggest concerns parents of disabled children have is providing for their children into adulthood. In many cases, parents are the primary caretakers and many worry about their child’s future without them. This type of account can help with long-term planning which can serve to give families some peace of mind for the future.

In New York state, the creation of the savings account program passed unanimously in both the Assembly and in the Senate and was signed into law by the governor on December 22, 2015. The enacting legislation required the State Comptroller to establish the new savings account plan in consultation with the Office for People with Developmental Disabilities, Office of Mental Health, Department of Health and Office of Temporary and Disability Assistance. To learn more, visit the state comptroller’s site at https://www.osc.state.ny.us/savings/able.htm.

If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 200 North Second Street, Fulton, New York 13069, by e-mail at barclaw@nyassembly.gov or by calling (315) 598-5185.