More People with Multiple Sclerosis to Qualify for ABLE Savings Accounts

In December 2022, the omnibus spending bill passed by Congress and signed by President Joe Biden bill included the ABLE Age Adjustment Act. The new law raises the age threshold of eligibility to open an ABLE savings account from 26 years to 46 years of age at the onset of a qualifying disability. Before the age adjustment, only individuals with an onset of disability before the age of 26 qualified to open an ABLE account. Given that the age of onset for multiple sclerosis (MS) typically falls between 20 and 40 years, many people living with MS have been left out of participating in ABLE savings accounts.

ABLE is short Achieving a Better Life Experience Act, which was enacted in 2014. The ABLE act created savings accounts that allow Americans with disabilities to save money without affecting their need-based programs, such as Medicaid, Supplemental Security Income and the Supplemental Nutrition Assistance Program (formerly known as food stampp). With these programs, people are typically limited to $2,000 in savings and other liquid assets in order to qualify. However, any money saved in an ABLE account does not count toward that number.

ABLE accounts, also known as 529A accounts, are modeled after 529 college savings plans. Currently, they are available in 46 states and Washington, D.C., and offer tax-free distributions if used for qualifying expenses. These include healthcare expenses, housing, food, transportation and other personal services.

Anyone can contribute to a beneficiary’s account, but there are annual contribution limits. In 2023, the maximum contribution is $17,000. However, if an individual with an ABLE account works, they can contribute an additional $13,590 per year from their earnings.

The new eligibility age threshold will not go into effect until January 2026, but according to The New York Times, an additional 6 million people will qualify for ABLE accounts when the rule goes into effect. This would include people diagnosed with MS and other neurological conditions well after their mid-twenties.