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A Basic Guide to NJ ABLE Accounts

Laurie Schaller NJ Able Presentation

Many individuals with disabilities and their families rely on federal benefits like Medicaid and Social Security Income (SSI) for their financial wellbeing. However, having more than $2,000 in savings or other assets can jeopardize their eligibility for these benefits.

Fortunately, New Jersey recently launched a program to help individuals with disabilities establish savings accounts that won’t affect their eligibility for these public benefits. It’s called the NJ ABLE program and it stands for Achieving a Better Life Experience. To better understand how this program works, we spoke with Laurie Schaller from the ABLE National Resource Center.  

What are ABLE Accounts?

These accounts allow people with disabilities to save money in a tax-exempt account that may be used for qualified disability expenses while still keeping their eligibility for federal public benefits.

Here Are the Basics:

The NJ ABLE Account allows for individuals with disabilities, along with their family and friends, to contribute up to $15,000 a year (with some exceptions) for qualified disability expenses. Contributions to this account must be made using post-tax dollars and will not be tax-deductible.

Individuals can enroll in the NJ ABLE program online. A parent, guardian, or person with power of attorney can manage the account.

There is an annual fee to maintain the account. It’s $45 for individuals that choose to receive electronic statements and $60 for individuals that choose paper statements. There is also a required minimum contribution to the account of $25.

For those who qualify for SSI, the balance of an ABLE account cannot exceed $100,000. For those who do not qualify for SSI, the balance limit is $305,000.

Eligibility Requirements:

In order to be eligible for an NJ Able Account, the individual must have a disabling “condition that began prior to reaching age 26”. The individual must also:

  • Have been determined to meet the disability requirements for Supplemental Security Income (SSI) or Social Security disability benefits and are receiving those benefits.
  • Submit a “disability certification” assuring the individual holds documentation of physician’s diagnosis and signature.

What Are Qualified Disability Expenses?

Qualified disability expenses are expenses related to the sole benefit of the individual in maintaining or improving his or her health, independence, or quality of life. This can include basic living expenses such as housing, food, taxes, and healthcare. Other expenses include education, transportation, assistive technology, personal support devices, financial management, and administrative services, and more. However, paying these expenses must provide no benefits to others.

For example, if an individual wants to take a trip to Italy, he or she cannot use the money from the ABLE Account for a friend to come. However, if the individual wants to take a trip to Italy and needs assistance from a nurse because of their needs, the money in the ABLE Account can be used for the nurse to come along.

To learn more about NJ Able Accounts, please go to the ABLE National Resource Center.

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