ABLE Accounts in New York

by David Goldfarb

If you are a disabled individual in New York and you exceed certain asset restrictions, you will lose eligibility for important government benefits such as Medicaid or Supplemental Security Income (SSI). However, while such individuals must save money for qualified expenses, many people do not know how to go about saving without losing their benefits eligibility. One important tool in this situation is the New York Achieving a Better Life Experience (NY ABLE) program.

If you want to discuss participation in this program and how opening an NY ABLE account can help you or your family member, please contact a knowledgeable New York special needs planning attorney today.

What Is the ABLE Program?

This program, initiated by a new law in 2015, provides a way to supplement benefits such as SSI, SSDI, Medicaid, and private insurance. The program allows—and encourages—families and individuals to save their own funds in a specified ABLE account that they can use to maintain a certain quality of life, health, and independence as people with disabilities in New York.

The Office of the State Comptroller administers the program. The following people may seek to open an ABLE account:

  • The eligible disabled individual
  • A parent or another legal guardian of the eligible disabled individual
  • An individual who was granted Power of Attorney of the eligible disabled individual

Once opened, the eligible disabled individual will be the beneficiary of the account and anyone is able to contribute funds to the account. A person who meets the following criteria may be considered an eligible disabled individual:

  • A disability entitles them to either SSI or SSDI
  • Individuals must have a disabling condition that occurred before age 26
  • If they do not receive disability benefits, one of the following must apply:
    • They have been classified as blind
    • Their disability is listed as one of the conditions on the Social Security Administration’s List of Compassionate Allowances Conditions
    • They have a written diagnosis of a certain type of mental or physical impairment that will last for at least a year or is life-threatening and that causes severe functional limitations.

Funding an ABLE Account

ABLE accounts have a maximum annual cap of $15,000 in contributions as of January 2018. The account can hold a maximum of $100,000. While contributions are not tax deductible, any distributions or earnings of account funds are tax exempt as long as beneficiaries spend them on qualified disability expenses. Such expenses include housing, healthcare, education, legal fees, assistive equipment and care, and more. These funds will not affect eligibility for Medicaid, SSI, SSDI, or other benefits.

Contact a New York Special Needs Planning Lawyer

Having a funded ABLE account can greatly improve the quality of a disabled person’s life in New York while not disqualifying that person from government benefits. If you would like more information about eligibility or opening an ABLE account, consult with Goldfarb Abrandt Salzman & Kutzin LLP today. Call our office at (212) 387-8400 or contact us online to set up a consultation.