ABLE assists disbabled: New state program helps residents without risking federal benefits

Amanda Hansen knows that her 18-year-old son Trevin loves to snowboard, go on road trips and do other activities that get him out in the world despite autism.

The Hansens in Spokane are featured in a new TV commercial showing them enjoying time with Trevin. In the segment, she describes a state program launched in 2018 for people with disabities to use savings accounts toward living expenses that also won’t risk federal benefits requiring asset limits.

“Trevin is heavily impacted by autism,” said Amanda Hansen, who lives with husband Jon Hansen and Trevin. “He’s functionally nonverbal. He has lots of words, but very few of them are meaningful communication, so he can’t tell you when he’s hurt, sick, doesn’t like something or has an idea.”

Achieving a Better Life Experience, known as ABLE, offers a way for eligible people with disabilities and their families to save and withdraw money for the disabled person’s everyday expenses such as groceries, housing, technology, transportation, a trip or vehicle purchase.

The state program means eligible participants can use an ABLE account without fear of losing federal Supplemental Security Income or Medicaid eligibility.

“It was very easy to open the (ABLE) account,” Hansen said. “Then we connected it to his regular checking account, so we can transfer money electronically between the two.

“It improves his quality of life. It allows him to save for activities. All of those things cost money, so this allows for us to save for that. We won’t be around forever, and he will still have the means to enjoy being out in the world.”

In 2014, the federal Achieving a Better Life Experience Act passed allowing states to offer the tax-advantaged 529A savings accounts for people living with disabilities.

The state estimates more than 130,000 people are eligible for Washington’s ABLE Savings Plan and about 50,000 have the financial assets to make use of the accounts. But so far the program has about 1,100 enrollees. A TV campaign is seeking to raise awareness.

Each savings plan requires an annual fee of $35 used toward running the program.

A beneficiary must be a U.S. citizen or legal resident living in Washington state with a disability or blindness that developed before the age of 26. Confirmation requires one of the following:

Eligible for Supplemental Security Income or Social Security Disability Insurance because of a disability;

Experience blindness as determined by the Social Security Act;

Can produce a signed diagnosis form by a licensed physician if requested.

Recognized disability conditions include Down syndrome, hearing loss, epilepsy and autism, among others. Disabled state residents who don’t receive federal benefits might still be eligible if they have a physician’s signed diagnosis form.

A $25 minimum deposit is required to start an ABLE account, and then there is a $10 minimum for any contribution or withdrawal. Eligible participants can save money with a cash option account or through cash and investments with a stocks and bonds option.

Low fees apply on the underlying mutual funds, part of each of the investment options and a state administrative fee. These add up to between 0.30% and 0.38% of the account’s balance per year, the program website said.

Additional fees are added if someone opts out of electronic statements or requests a withdrawal check instead of doing everything online.

Families can deposit up to $15,000 per calendar year tied to the IRS annual gift tax allowance, or the amount can be greater if the beneficiary is earning wages from employment. Withdrawals aren’t counted as income.

Authorized legal representatives can open the account with proof of power of attorney, legal guardian or conservator role for the beneficiary. If the beneficiary is younger than 18, the authorized legal representative also can be a parent.

Hansen said she opened the ABLE account for Trevin about three months ago. The family rolled over funds from a state 529 Guaranteed Education Tuition account opened when Trevin was born.

She said ABLE will benefit her son more because college won’t be an option, and GET funds are limited to college expenses. Her son was diagnosed at age 3.

“Otherwise, he’d not be able to access those education funds. We’d have to pay a penalty or transfer it to another family member,” Hansen said. “We stopped contributing to it when it became clear that higher education was not his likely path, but the money continued to grow.

“(Now) it will pay for his needs like his electronics. He enjoys them very enthusiastically, but he is very hard on them. He’s gone through maybe seven or eight iPads and about the same in laptop computers. Even when you buy them used, that gets expensive.”

She said some families with a disabled member worry that if that person receives more than $2,000 a month in assets, even with gifted amounts, the individual might lose SSI or Medicaid. Legislation enacting ABLE accounts takes that concern away, Hansen said.

“The ABLE account is shielded from that,” she said. “You can put in money, and it doesn’t count toward the $2,000 asset limit.

“ABLE has some limits, but you don’t have to constantly worry. It’s not perfect, but it’s far better than anything else that has been created. For the family, it takes some paperwork pressure off to manage that $2,000 in asset limit and offers a peace of mind to save for his future.”