A Helpful Account for Parents of a Special Needs Child

A money tip from Lynnette Khalfani-Cox, The Money Coach®

Raising a special needs child comes with a host of additional healthcare costs, but one way you can help cover them is by establishing an ABLE account.

Congress passed the ABLE Act in 2014, and ABLE stands for: Achieving a Better Life Experience. The ABLE law lets families save money in a tax-free account to use for healthcare costs, along with a broad range of other expenses incurred by those living with disabilities. Qualified ABLE expenses include everything from tuition and housing costs for college, to transportation and personal support services that improve quality of life and independence.

Best of all, you don’t have to worry that the funds you save or deposit into an ABLE will disqualify your child from receiving government benefits, like Social Security Income or Medicaid. That’s because as long as the ABLE account balance doesn’t exceed $100,000, the money won’t be included in the formulas used to determine eligibility for public benefits.

There are a few rules to know before you open an ABLE account. For starters, a diagnosis of your child’s disability and their needs must occur before their 26th birthday. Their condition must be expected to continue for at least 12 consecutive months, and they must be already receiving benefits under SSI or Social Security Disability Insurance, or else they’re required to secure a disability certificate from a doctor.

While ABLE accounts are state administered plans, you don’t have to use a plan from your state. Do your homework and compare features, fees and investment options to find the account that’s right for you.  The ABLE National Resource Center provides more information about ABLE accounts.


Please consult a qualified tax professional for tax advice on your specific situation.

SFFCU does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

When you click on external links, you are linking to alternate websites not operated by SchoolsFirst FCU, and SchoolsFirst FCU is not responsible for the content of the alternate websites. The fact that there is a link from SchoolsFirst FCU’s email to an alternate website does not constitute endorsement of any product, service, or organization. SchoolsFirst FCU does not represent either you or the website operator if you enter into a transaction. Privacy and security policies may differ from those practiced by SchoolsFirst FCU, and you should review the alternate website’s policies.

Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or BALANCE counselor who can help tailor a solution for you.

If you post a comment, we will make every effort to respond or contact you directly. We reserve the right to delete comments that contain personal information, unauthorized content, or are generally inappropriate.



Leave a Reply

Your email address will not be published. Required fields are marked *