Pennsylvania ABLE Savings Program To Launch on April 3
On April 3, 2017, Pennsylvania’s state treasury will launch the PA ABLE ( Achieving a Better Life Experience) Savings Program. Until now, Pennsylvanians who wanted to open an ABLE account had to do so in another state.
Under Pennsylvania’s new ABLE program, an individual with a disability which occurred before age 26, or the individual’s family members and friends, can deposit up to $14,000 per year into an ABLE account. The individual with a disability and other authorized individuals can then withdraw funds to spend on a variety of living expenses. Funds held in an ABLE account will not count as a resource for purposes of determining the disabled individual’s eligibility for Medical Assistance benefits. The first $100,000 in an ABLE account will not count as a resource for purposes of determining the disabled individual’s eligibility for Supplemental Security Income (SSI) benefits.
If funds withdrawn from an ABLE account are used to pay qualified disability expenses, the individual with a disability will owe no taxes either on the withdrawn funds or any of the interest earned by the account. The list of qualified expenses is extensive and includes educational, housing, transportation, health, employment training and support, assistive technology, legal fees, and funeral and burial expenses. Significantly, funds withdrawn from an ABLE account which are used to pay housing expenses will not impact a disabled individual’s SSI benefits so long as such funds are used within the same calendar month they are withdrawn.