In Spring 2018, the State of Delaware is introducing a new, low cost, savings plan- DEPENDABLE – that allows individuals with disabilities and their families to have greater control over their finances and enhanced security for their future.
DEPENDABLE allows individuals with disabilities to save for a broad range of expenses on tax-advantaged basis without jeopardizing government benefits.
State Treasurer Ken Simpler announced on December 19, 2017, that Delaware will join the National ABLE Alliance, a coalition of states committed to assisting people with disabilities by offering a special tax-advantaged investment account for those with qualified disabilities.
The Delaware Achieving a Better Life Experience (ABLE) Act allows individuals with disabilities to save and invest in a 529a account for qualified expenses. On December 19, 2014, the ABLE Act was signed into federal law by President Barack Obama. In June of 2015, Delaware’s ABLE Act or “Kayla’s Bill” was signed into Delaware law. The legislation allows people with disabilities to keep as much as $100,000 in 529-style tax-free savings accounts without losing their medical benefits.
Who is eligible to be an ABLE account beneficiary?
Eligible individuals can open an account for themselves, or an authorized individual can open an account on their behalf. There are a few requirements that individuals with disabilities must meet to be able to have an account.
To be eligible, individuals can provide a “disability certification”, including a physician’s diagnosis, that the individual meets criteria to be further established in regulations (essentially equal to Social Security level of disability), OR meet the following two requirements:
What may funds from an ABLE account be used for?
Distributions from an ABLE account may be made for qualified disability expenses, related to the individual’s disability or blindness and made for his/her benefit, including:
Expenditures for non-qualified expenditures will be penalized (tax and potential SSI penalties).
To request updates on the Spring 2018 launch of DEPENDABLE, please contact the Office of State Treasurer ABLE@state.de.us or 302-672-6700.