LA’s Budget Crisis Delays Implementation of ABLE Accounts
In 2015, Louisiana passed the ABLE Act, which authorizes individuals with special needs and their families to save money for special needs based expenses in a tax-free account. In short, it creates a low cost alternative to a special needs trust to protect the finances and improve the quality of life for individuals with special needs.
Under the ABLE act, individuals may contribute up to $14,000 per year up to $300,000 total. The individual’s SSI benefits will not be affected until the value of the account reaches $100,000. If an individual’s ABLE account reaches $100,000, the person’s SSI benefits will be suspended but not terminated.
The individual may use the funds from the account to pay for disability related expenses including: education, housing, transportation, health care, and financial services. As long as the expenses do not conflict with SSI, the payment of these expenses will not affect the individual’s SSI.
To implement the program, Louisiana needs to draft and publish regulations relating to the program. In essence, the legislature authorized the program, and now the regulator needs to create the rules on how it will work. It appears that the current budget crisis is delaying the creation and implementation of the rules, and thus, individuals with special needs and their families cannot yet take advantage of this new tool in planning for their financial futures.
