ABLE accounts open new options for people with disabilities

People with disabilities often face strict financial limits when qualifying for programs such as Supplemental Security Income (SSI), Medicaid, and subsidized housing. ABLE accounts were created to address that problem, allowing eligible individuals to save money without jeopardizing access to important public benefits.

In this interview, elder law attorney Harry Margolis, author of "Get Your Ducks in a Row," discusses how ABLE accounts work, who qualifies, recent eligibility changes, contribution limits, and how these accounts can be used alongside special needs trusts.

Below is a transcript of the interview with Margolis, edited for brevity and clarity.

What an ABLE account is and why it matters

Robert Powell: For those who might be unfamiliar with ABLE accounts, do you want to start there?

Harry Margolis: An ABLE account is a special safe harbor that people with disabilities can use to set up an account they can own and manage themselves. The funds in that account generally are not counted when determining eligibility for public benefits such as Supplemental Security Income, Medicaid, and subsidized housing.

It's a valuable exception to some very strict rules. SSI, for instance, has an asset limit of $2,000, and that amount hasn't changed since 1989. The cost of living has nearly tripled since then.

That makes it difficult for people to stay under the limit. They might earn some income from work, or receive an inheritance, a small personal injury settlement, or a gift. Instead of helping, that money can make them ineligible for benefits they depend on.

Congress created ABLE accounts to address that problem. ABLE stands for Achieving a Better Life Experience. The accounts share some characteristics with 529 college savings plans, but they have their own unique rules.

The ABLE account age eligibility rule changed

Harry Margolis: Up until this year, an individual had to become disabled before age 26 to qualify. The account could be established later, but the disability had to have occurred before age 26.

As of this year, that age limit has increased to 46.

I don't know why there's any age limit at all, except that the concept originally grew out of the 529 plan framework.

Contribution limits and account rules

Harry Margolis: If someone became disabled before age 46, they can establish an ABLE account. A parent can establish it as well.

Each state has a designated program administrator. In Massachusetts, for example, Fidelity Investments administers the program.

Currently, a total of $20,000 can be contributed annually by all contributors combined, including the account owner, parents, grandparents and others. That amount is adjusted periodically and generally tracks the annual gift tax exclusion amount.

The account balance can grow to $100,000 before it affects SSI eligibility.

How ABLE accounts help preserve benefits

Harry Margolis: ABLE accounts are useful because family members often want to help someone receiving public benefits but are limited by the eligibility rules.

For example, if someone receives SSI and has a special needs trust that pays rent directly, the beneficiary may lose about one-third of their SSI benefit because the payment is treated as in-kind support.

Instead, the trust could deposit the rent amount into the beneficiary's ABLE account. The beneficiary could then pay the rent directly from the ABLE account without triggering that reduction in SSI benefits.

The accounts also give individuals greater flexibility to manage money and pay for personal needs without constantly worrying about benefit eligibility.

In some situations, an ABLE account may reduce the need for a special needs trust. In others, it works alongside the trust.

For people looking for more information, the ABLE National Resource Center offers educational resources and guidance.

Who qualifies for an ABLE account

Robert Powell: How does someone know whether they're eligible?

Harry Margolis: If you're receiving SSI, you're eligible. If you're receiving Social Security Disability Insurance benefits, you're eligible. In those situations, you've already established that you have a qualifying disability.

What counts as a qualified disability expense

Robert Powell: Do people need to worry about qualified disability expenses?

Harry Margolis: Not too much.

The law says distributions should be used for qualified disability expenses, but that's interpreted broadly. Generally speaking, if the expenditure benefits the account owner, it qualifies.

You can't spend the money on someone else's expenses, but most purchases that benefit the account holder are permitted.

What happens if you move to another state

Robert Powell: These are largely state-run programs. If someone lives in Massachusetts and later moves to Connecticut or New Hampshire, can they open another ABLE account?

Harry Margolis: Individuals are only permitted to have one ABLE account.

Whether the account would be transferred or simply maintained after a move is something the ABLE National Resource Center may be able to clarify.

A final consideration: Medicaid estate recovery

Robert Powell: Anything we missed?

Harry Margolis: One point worth mentioning is that ABLE accounts may be subject to state recovery rules after the account owner's death.

If money remains in the account, the state may have a claim against those funds. In practice, however, many account holders do not accumulate large balances, so it often isn't a major issue.

Related: Your health insurance may not protect your finances

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This story was originally published June 1, 2026 at 8:33 PM.