NJ Achieving a Better Life Experience (NJ ABLE)
Enacted December 19, 2014, Public Law 113–295, also known as The Stephen Beck, Jr., Achieving a Better Life Experience Act, added Section 529A to the federal tax code. More commonly referred to as the ABLE act, this law enables eligible individuals with disabilities (and their families) to save money for disability related expenses in a tax-exempt account known as an ABLE account.
What are Able Accounts?
ABLE accounts are tax-advantaged savings accounts intended to encourage and assist individuals with disabilities and their families to save private funds to supplement benefits provided to them through Medicaid, Supplemental Security Income (SSI), employment, and other sources.
Most individuals with disabilities depend on Medicaid to access disability related services needed to maintain health, independence, and quality of life. Establishing an ABLE account enables beneficiaries to save money for disability related expenses while still maintaining eligibility for means tested Federal benefit programs. Money saved in an ABLE account will not affect an individual's eligibility for SSI (up to $100,000) and will allow the beneficiary to maintain eligibility for Medicaid and other public benefits.
More information on ABLE accounts:
NJ ABLE, New Jersey's ABLE plan, is administered through DDS in partnership with a contracted program manager, Ascensus College Savings Recordkeeping Services. DDS provides information and technical assistance, and presents on NJ ABLE throughout the state.
With NJ ABLE, individuals can save up to $17,000 annually  and up to a $305,000 lifetime max.
As the definition of "disability related expenses" is very broadly defined, the funds in an NJ ABLE account can be used to purchase just about anything that would enhance a person's life. Allowable expenses are not limited to medical necessity and can include things like: education, housing, transportation, personal support services, and more! The funds are intended to supplement not supplant, government benefits.
The individual with the disability is the account owner, but anyone can contribute to the account.
Interest income earned by the account is not taxed. Balances of $100,000 or less are excluded from the SSI resource limit. If the account holders’ balance exceeds $100,000, the SSI cash benefit will be suspended, but they will continue to be eligible for Medicaid, allowing them to continue receiving the important services needed to remain living independently. Once the balance falls below $100,000, the SSI cash benefit is automatically reinstated.
To schedule an NJ ABLE presentation or to request brochures, please contact us at 1-888-285-3036.
(ABLE account owners who earn income may contribute additional funds beyond the annual $17,000 annual contribution limit, through legislation of the “ABLE to Work” provision)
To be eligible to open an NJ ABLE account, individuals must meet the following two requirements:
- Their disability was present before age 26; and
(effective 12/2022 via the ABLE AGE ADJUSTMENT legislation, this will increase to age 46 beginning in 2026)
- One of the following is true:
- they are eligible for SSI or SSDI because of a disability OR
- they experience blindness as determined by the Social Security Act OR
- they have a similarly severe disability with a written diagnosis from a licensed physician.
Visit savewithable.com to open an account and begin saving!
Frequently Asked Questions
Who can open an ABLE account?
Eligible individuals can open the account for themselves, or an authorized individual can open an account on their behalf.
Who qualifies as an ‘authorized representative’?
This can be a person appointed as a Power of Attorney or someone appointed by the court to have financial authority to transact on behalf of the individual.
Do I have to prove that withdrawals are for qualified disability expenses?
Not at the time of the withdrawal. Annually, NJ ABLE will report the total amount of your withdrawals to the IRS and the date and amount of each of your withdrawals to the Social Security Administration. In the event that either entity wants to verify the expenses, it’s recommended that you keep detailed records.
Can I have more than one NJ ABLE account?
No. You’re limited to one ABLE account, except in the case of a rollover from another qualified ABLE program. This extends beyond NJ ABLE to include accounts in other ABLE programs.
In the case of a rollover to an ABLE account for the same account owner, the account from which the funds are withdrawn must be closed within 60 days of the withdrawal.
Can friends and family make contributions into my account?
Absolutely! Anyone can contribute directly to your NJ ABLE account. No matter who contributes, you, the account owner /authorized individual, retain control over the account.
How often can I change my investments?
Twice per calendar year. You can change your investment options for any NEW contributions at any time.
Will my ABLE savings affect my HUD housing subsidy?
No. The U.S. Department of Housing and Urban Development (HUD) will disregard amounts in the designated beneficiary’s/individual’s ABLE account.
What’s the difference between an ABLE account and a Special Needs Trust or a Pooled Income Trust?
Individual control vs. trustee control
Ease of accessing funds
ABLE funds are easy to access with checking and debit card options
SNT funds are more complicated and have more rules in order to preserve eligibility for benefits.
Set up costs
ABLE account is less expensive to establish
SNT often requires an attorney or high minimum contributions
What happens upon the death of the designated beneficiary of an ABLE account and who must be notified?
Upon the death of the designated beneficiary of an ABLE account, the State of New Jersey, Division of Medical Assistance and Health Services (DMAHS) is a creditor entitled to recover amounts remaining in the ABLE account up to an amount equal to the total medical assistance paid for the designated beneficiary after the establishment of the account, net of any premiums paid from the account or paid by or on behalf of the beneficiary to a Medicaid Buy-In program under any state Medicaid plan established under title XIX of the Social Security Act.
Notification of the death of the designated beneficiary of an ABLE account should be directed to the DMAHS Beneficiary Administration Action Unit (BAAU) at the address/phone number highlighted in boldface below:
DMAHS Beneficiary Administrative Action Unit
Mail Code 5
PO Box 712,
Trenton, NJ 08625-0712
609-588-3075 or 3089
For additional information see also the Division of Medical Assistance and Health Services website
Notification of any changes to the account and or about the death of the designated beneficiary of an ABLE account must also be sent to NJ ABLE at:
P.O. Box 219289
Kansas City, MO 64121
Visit savewithable.com to open an account and begin saving!