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ABLE bank accounts for disabled people become law in New Jersey

Last July, this blog reported the advancement of a bill out of committee in the New Jersey Legislature. This bill was the state's response to the passage and signing by President Obama in December 2014 of the "Achieving a Better Life Experience Act," also known as ABLE. The New Jersey bill was the state's way of implementing the requirements of the federal law. As of last week, that bill is now law in New Jersey.

What does this mean for New Jersey residents who may be disabled and have the inability to work? Well, the new law requires that the state departments of treasury and human services establish a program under which they may contract with third parties to create accounts, process applications and market the program to communities that have a likelihood of need for the program.

The ABLE program will allow disabled individuals, including those who may be receiving Social Security Disability Insurance, to open bank accounts in which they can deposit savings of up to $100,000. The money in these accounts will be tax-exempt, and will not be considered an asset or income when determining eligibility for certain government benefits such as Medicaid. The idea is to allow those who are disabled a way to mimic others who have health savings accounts, Individual Retirement Accounts, or college savings accounts. These new accounts will be important because, as pointed out by a state representative, those with disabilities often have a hard time achieving financial independence and have a poverty rate that is two times higher than average.

While the fact that this bill is now law is good news for New Jersey residents with disabilities, it may take some time to know exactly what all the ramifications of it are on those receiving SSDI or other government benefits. Those with questions on the requirements of these accounts, or how this might affect their applications or on-going benefits may wish to contact and experienced disability attorney.

Source:, "Bill to Create Tax-Free Savings Accounts for Individuals with Disabilities Becomes Law," Paul Nichols, Jan. 11, 2016

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