About the California Achieving a Better Life Experience Program
For many people with disabilities, the fear of losing critical public benefits, coupled with the high cost of support expenses, has limited them from building financial security. This changed in 2014 with the signing of the Stephen Beck Jr. Achieving a Better Life Experience Act. The ABLE Act as it is known allows individuals with disabilities to open an ABLE Account without losing eligibility to public benefit programs.
In 2015, Governor Brown signed the California ABLE Act which allows qualified individuals with disabilities to open tax-advantaged ABLE accounts in California. California residents with disabilities are allowed to open an ABLE account in any state offering a national plan.
The CalABLE program officially launched and began accepting enrollees on December 18, 2018.
An ABLE Account is a tax-advantaged savings account that allows individuals with disabilities to save and invest money for disability-related expenses (called Qualified Disability Expenses, or QDEs) without losing eligibility for certain means-tested public benefits programs, such as Medicaid, Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI).
Contributions to an ABLE account, currently limited to $15,000 per year, can be made by family, friends, or the beneficiary themselves. The account’s earnings are allowed to accumulate tax-free, and the withdrawals, provided they are applied to qualifying disability expenses, are tax-free.
For individuals receiving SSI benefits and/or State or local means-tested benefits, their ABLE accounts must not exceed $100,000.
Criteria of Eligible Individuals
An “Eligible Individual” is someone who developed their disability before the age of 26. The individual must have been living with their disability for at least one year, or they must expect their disability to last for at least a year.
In addition, the individual must meet at least one of the following criteria:
- Be entitled to Supplemental Security Income (SSI) because of their disability;
- Be entitled to Social Security Disability Insurance (SSDI) because of their disability;
- Have a condition listed on the Social Security Administration’s List of Compassionate Allowances Conditions; or
- Be able to provide "self-certification" of their disability and diagnosis (see details below) when opening an ABLE Account.
The purpose of an ABLE Account is to help individuals with disabilities maintain or improve their health, independence, and quality of life.ABLE Account earnings are not subject to federal income tax when used for “Qualified Disability Expenses” (QDEs).
Qualified Disability Expenses
These expenses are not limited to just medical expenses, but may also include basic living costs, such as the following:
- Employment training and support
- Assistive technology and personal support services
- Financial management and administrative services
- Legal services
- Funeral and burial expense, and other expenses.