Providing People with Disabilities Greater Financial Security
California Achieving a Better Life Experience (CalABLE) is
a program that allows people with disabilities to establish
a tax-advantaged ABLE account that allows them to save up to
$100,000 without losing public benefits such as SSI, SSDI and
Medi-Cal. Earnings in these accounts are not subject to federal
income tax or California state income tax, as long as earnings
are spent on Qualified Disability Expenses. Prior to the federal
ABLE Act, an individual receiving benefits from a public program
was not able to save more than $2,000 without their benefits
In 2015, the California State Legislature created the California
Achieving a Better Life Experience Board (CalABLE) to implement
the ABLE program in California.
In 2014, President Obama signed the Stephen Beck, Jr. Achieving a
Better Life Experience Act (IRC Section 529A).
Legislation signed by Governor Brown in the Fall of 2018 added
two important new elements:
A California resident’s CalABLE account will not be subject
to recovery by MediCal
CalABLE will be a national program, available for
particiption by residents of other states.
To be eligible to establish an ABLE or CalABLE account, an
individual must be diagnosed with a disability prior to age 26.
In addition, the individual must meet at least one of the
Be entitled to Supplemental Security Income (SSI) or Social
Security Disability Insurance (SSDI) because of their disability;
Be able to provide “self-certification” of their disability
and diagnosis. This means the individual has a written, signed
diagnosis from a licensed physician which is available upon
Contributions to an ABLE account are currently limited to $14,000
per year, and can be made by family, friends, or the beneficiary
themselves. The account’s earnings are allowed to accumulate
tax-free, and the withdrawals, provided they are applied to
qualifying disability expenses, are also tax-free.
Qualified Disability Expenses
An expense is considered “qualified” when it relates to the
person’s disability and helps them maintain or improve their
health, independence, or quality of life. Qualified Disability
Expenses are not restricted to medical expenses. They may include
basic living expenditures such as expenses for education,
housing, transportation, employment support, health, prevention
and wellness, assistive technology, financial services, home
improvement and funeral services.
The CalABLE Board is working to determine California account
features and benefits, such as:
Ability to contribute automatically through routine
deductions from a bank account;
Ability to invite friends and family to contribute directly
to your account;
Deposit online or by check; and
Diverse investment options.
ABLE Accounts In Other States
A few states are already operational (including Alaska, Florida,
Illinois, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska,
Nevada, North Carolina, Ohio, Oregon, Tennessee and Virginia) and
out-of-state residents may open an ABLE account in certain
states. Online enrollment is free in some states, however each
program has different fees and costs associated with
it. California residents should shop each state’s
program to determine which best fits their needs; a tool
comparing programs can be found at this site: http://ablenrc.org/state_compare/.