Federal Achieving a Better Life Experience Act. Congress passed the Achieving a Better Life Experience Act (ABLE) in December 2014, which exempted qualified ABLE savings programs established by states from taxation. Eligible individuals can contribute to these tax-advantaged savings accounts. Eligible individuals include any person with a significant physical, behavioral, developmental, or military disability with an onset before age 26.
Individuals are able to invest up to $14,000 per year in ABLE accounts. Withdrawals from these accounts will not be taxed so long as the money is spent on qualified expenses such as housing, education, transportation, health care, and rehabilitation. An individual generally cannot have more than $2,000 in savings or other assets to be eligible for means-tested federal programs such as Medicaid or Supplemental Security Income (SSI). However, investments up to $100,000 in ABLE accounts will be disregarded as assets for Medicaid or SSI eligibility.
Congress recently enacted the ABLE Age Adjustment Act in the omnibus spending bill. Beginning January 1, 2026, the age threshold for the onset of a qualifying disability is increased to 46.
Washington Achieving a Better Life Experience Program. The Legislature authorized the creation of the Washington Achieving a Better Life Experience Program (Program) in 2016, which is administered by a seven member governing board and operated by the Department of Commerce in consultation with the state treasurer and State Investment Board (SIB). The Program administers the ABLE Account which consists of payments received from contributors to individual ABLE program accounts. The assets of the account may be spent without appropriation for making payments to individual account holders, and for administrative and operating expenses of the Program. The ABLE Account must be self-sustaining. The assets of the ABLE Account may be invested by a contracted investment manager or the SIB, as determined by the governing board.
Encouraging Achieving a Better Life Experience Account. The Encouraging Achieving a Better Life Experience Account (ENABLE) is created in the custody of the state treasurer. Money from legislative appropriations and transfers, federal funds, public or private donations, gifts, grants, and any other lawful source may be deposited in the ENABLE account.
Expenditures from the ENABLE account may only be used for the following purposes in the following priority:
Only the director of the state ABLE governing board, or the board's designee, may authorize expenditures from the ENABLE account. The account is subject to allotment procedures, but an appropriation is not required for expenditures. If any deposit from the ENABLE account into an individual state ABLE account would result in the individual exceeding the contribution limit allowed under federal IRS regulations, the individual may defer the ENABLE deposit for up to two years to prevent exceeding the limit.
Governing Board Contracts. The governing board must contract with an organization to promote and encourage eligible individuals to open individual state ABLE accounts and make contributions to existing or rolled over individual accounts. If the recordkeeper or outside investment firm already contracted by the governing board can perform this function, the governing board may revise any existing contract for this purpose without engaging in the required competitive process.
PRO: As we look at our ABLE accounts, we haven’t had the take up that other states have seen. We need to promote to those that are eligible to increase participation and the financial incentives provided in the bill will help. If a person wants an ABLE account and has a guardian, the guardian has to pay a bond. This needs to be addressed to make it easier to open ABLE accounts.