Individuals with disabilities are often relegated to a life of poverty as a result of not being allowed to build even the most modest levels of resources. Individuals receiving support through Social Security, Medicaid and other publicly-funded programs are often disqualified from eligibility if they have more than $2,000 worth of resources or assets. With the launch of ABLE programs nationwide, individuals with disabilities and their families are able to allow the individual with a disability to grow their savings and not be subject to limiting the amount of funds in a bank account.

ABLE Accounts were established by the Achieving a Better Life Expectancy Act of 2014, under Internal Revenue Code Section 529A.  The New York ABLE Program, better known as NY ABLE, is administered by the Office of the New York State Comptroller, managed by Ascensus Broker Dealer Services, Inc. and backed by Vanguard, Sallie Mae and Fifth Third Bank.

NY ABLE allows eligible individuals with disabilities to save up to $15,000 a year in an ABLE account without jeopardizing their eligibility for federally-funded means based benefits, such as Supplemental Security Income (SSI) and Medicaid. ABLE accounts shield up to a maximum of $100,000 from SSI and Medicaid resource calculations. Every dollar over $100,000 will be counted against the individual as a resource.  The funds in the account can be used for disability-related expenses that assist the beneficiary in increasing and/or maintaining his or her health, independence or quality of life.

There are certain requirements to open an NY ABLE account.  First, the individual benefiting from the ABLE account must be an “eligible individual” who is a resident of New York State.  There are two ways an individual can certify they are an “eligible individual”:

  • The individual has a disability that was present before age 26 AND the individual is entitled to SSI or Social Security Disability Insurance (SSDI) because of the disability


  • The individual has a disability that was present before age 26 AND at least one of the following is met:
    • The individual has a written diagnosis from a licensed physician documenting a medically determinable physical or mental impairment which results in marked and severe functional limitations, that can be expected to last for at least a year or can cause death, OR
    • The individual is classified as blind (as defined in the Social Security Act), OR

Interestingly, proof of eligibility is not required to open an account, but it is strongly recommended that the proof of eligibility should be maintained by the account holder in the event they need to prove eligibility at a later date.  The second on the list of requirements to open the NY ABLE account is determining who has the authority to open the NY ABLE account.  The individual may open the account, or the individual’s parent, guardian, or agent appointed under a power of attorney. 

ABLE Accounts nationwide benefit from growing tax-free in the account with no tax due on the earnings, if the earnings are used for qualified disability expenses.  Examples of qualified disability expenses include: education, health and wellness, housing, transportation, legal fees, financial management, employment training, assistive technology, personal support services, and monitoring services.  It is strongly recommended that records of expenses be kept in the event that the qualified disability expenses are questioned at a later date.  If the ABLE account savings are used for non-qualified expenses, the earnings portion of the withdrawal used to pay for the non-qualified expense will be treated as income, subject to federal and state taxes as well as a 10% federal tax penalty.  At the end of each year, a 1099QA is issued to each accountholder to indicate what portion of the distributions made for the year were earnings versus savings.

NY ABLE offers five account options for individuals that open an ABLE account.  There are four investment plans based on the level of risk one is willing to take, much like a typical retirement plan.  These levels are Conservative, Intermediate, Moderate, and Aggressive.  NY ABLE also offers a checking account option, allowing the account to have a debit card and checkbook associated with it.  The checking account could be very appealing to those families where the individual with a disability could benefit from the experience of handling a checkbook and having independence.  There is also the benefit of not having any risk, as these are FDIC insured checking accounts through Fifth Third Bank.

Like the other ABLE programs across the country, the NY ABLE program focuses its efforts to ensure minimal costs associated with establishing and maintaining an ABLE account (which can be done online). There is a $45 annual fee payable quarterly at $11.25. If paper statements are selected, the fee increases to $13.75 per quarter ($55 annually). Checking accounts have a monthly maintenance fee of $2, which can be waived if the average daily balance is over $250 or by electing electronic statements at Fifth Third Bank. The annual investment fee is 0.40%.

For more information on the NY ABLE program and how to enroll, families can visit or speak with a qualified attorney knowledgeable in the area of special needs planning.