Achieving Financial Freedom & Economic Viability for Persons with Disability
As of March 2018, Arizonians with disabilities can now use the Achieving Better Life Experiences Act (ABLE) legislation to open tax-free investment accounts as a new pathway towards their independence and self-sufficiency. To tell us all about it, Brittany Chipley, Executive Director for the Department of Economic Security AZ- ABLE Plan, spoke to a group of parents at the August LDI Speaker Series about this promising program.
AZ ABLE accounts are modeled after 529 College Savings Accounts and allow investment assets to accumulate without affecting eligibility for federal or Arizona means-tested programs, such as Medicaid and SSI.
Some of the benefits of AZ ABLE are obvious, such as providing 4 Vanguard Mutual Funds, which generate both federal and state tax-free earnings, no separate tax returns to file, and putting the power of investment choice/asset allocation for expenses in the hands of the person who has the disability.
This freedom of choice empowers that individual to make their own decisions for what is best for them, as opposed to working with an agency or parent. It is owned by the person with the disability and increases the savings capacity from $2,000 to $15,000 (tied to the Gift Tax maximums), without incurring the risk of losing health care or other benefits.
Individuals with disabilities that are employed, have an additional $12,060 they can save each year for a total annual cap of $27,060 and lifetime cap of roughly $500,000 invested. Dividend and interest income from these investments are not part of the lifetime cap or are taxed.
Ms. Chipley demonstrated the ease in setting up an account (takes less than 20 minutes) and walked the audience through the eligibility process. You must be an Arizona resident, onset of the condition occurred before the age of 26 and meet one of three criteria: eligible to receive SSI or SSDI due to disability, have one of the conditions listed on SSA