Achieving a Better Life Experience (ABLE) and California ABLE (CalABLE) Accounts in the CalFresh Program

CALFRESH

Achieving a Better Life Experience (ABLE) and California ABLE (CalABLE) Accounts in the CalFresh Program

Release Date

02/13/2019

Section Heading

Purpose

To release a new policy.

This release informs Eligibility Staff of a new policy regarding Achieving a Better Life Experience (ABLE) or California ABLE (CalABLE) accounts.

Note: California Able Program is also referred to as CalABLE. Non-disabled Non-Assistance CalFresh (NACF) individuals are not qualified to open ABLE/CalABLE accounts.

California Work Opportunity and Responsibility to Kids (CalWORKs) Program will release policy separately regarding the impact of ABLE/CalABLE accounts on CalWORKs.

Policy

Effective January 1, 2016, ABLE/CalABLE account funds and any withdrawals/distributions used toward Qualified Disability Expenses (QDEs) are excluded as a resource/income for eligible NACF individuals with disabilities for CalFresh eligibility. The QDEs must be for the benefits of the ABLE/CalABLE account owner/designated beneficiary.

Note: Disabilities must have occurred before the age of 26.

An ABLE/CalABLE account is a tax-advantaged savings account that allows eligible NACF individuals with disabilities to save and invest money without losing eligibility for certain federal, state, or local means-tested programs, including CalFresh.

Note: Eligibility Staff are not to determine whether any NACF individuals with disabilities are eligible for ABLE/CalABLE. Implementation of the ABLE/CalABLE account policy does not change the existing policies and procedures on CalFresh eligibility. Eligibility Staff must continue validating information and verification submitted by the households (HHs) and take appropriate actions.

Background

On December 19, 2014, President Obama signed into federal law the Stephen Beck Jr ABLE Act (PL 113-295) which allows individuals with disabilities to open an ABLE account without losing eligibility to public benefit programs. These accounts were codified by the Tax Increase Prevention Act of 2014 and are included under Section 529A of the Internal Revenue Code of 1986, as amended.

On October 11, 2015, Governor Brown signed the California ABLE Act into law through Senate Bill (SB) 324 (Chapter 796, Statutes of 2015) and Assembly Bill (AB) 449 (Chapter 774, Statutes of 2015), which became effective January 1, 2016. The California ABLE Act allows qualified individuals with disabilities to open tax-advantaged ABLE accounts in California.

Definitions

Terms and Descriptions

Designated Beneficiary

The designated beneficiary is the ABLE/CalALBE account owner.

Account Funds

The account funds, which includes contributions, money in the account, dividends, and interests.

Requirements

The ABLE/CalABLE accounts help eligible NACF individuals with disabilities to maintain or improve their health, independence, and quality of life.

Eligible Individuals

Eligible individuals can only have one ABLE/CalABLE account. Individuals are eligible for an ABLE/CalABLE account if:

They are eligible for, or currently receiving, Social Security Income (SSI) or Social Security Disability Insurance (SSDI) benefits as a result of a disability; or Note: The eligible individuals must have a disability that is expected to last for at least one year.
They or their parent/guardian provide a “disability certification” of the individuals’ disability, along with a copy of a physician’s signed diagnosis.

QDEs

Funds from ABLE/CalABLE accounts can be withdrawn to pay for QDEs and for the benefits of the designated beneficiary. The QDEs include, but are not limited to the following:

Medical.
Education:
1. Tuition for preschool through post-secondary education;
2. Books; and
3. Supplies and educational materials.
Housing:
1. Home improvement, modifications, maintenance, and repairs;
2. Expenses for a primary residence;
3. Rent;
4. Purchase of a primary residence;
5. Mortgage payments;
6. Real property taxes; and
7. Utility charges.
Transportation:
1. Use of mass transit;
2. Purchase or modification of vehicles; and
3. Moving expenses.
Employment training and support:
1. Expenses related to obtaining and maintaining employment; and
2. Job-related training.
Assistive technology and personal support services:
1. Expenses for technology devices and personal support that help people with disabilities carry out daily activities (i.e., a smart phone for a child with autism).
Health, prevention and wellness:
1. Premiums for health insurance;
2. Mental health, medical, vision, and dental expenses;
3. Habilitation and rehabilitation services;
4. Medical equipment;
5. Therapy;
6. Respite care;
7. Long-term services and devices;
8. Nutritional management;
9. Communication services and devices;
10. Adaptive equipment; and
11. Personal assistance.
Financial management and administrative services.
Legal services.
Funeral and burial expenses.
Expenses for oversight and monitorings.
Other expenses.

Money in the ABLE/CalABLE accounts

The money in the ABLE/CalABLE accounts is exempt as a resource/income for CalFresh eligibility.

Contributions to the ABLE/CalABLE accounts

The contributions are exempt as a resource/income for CalFresh eligibility.

A contribution is the payment of funds into an ABLE/CalABLE account. Contributions can be made in the form of cash, check, money order, credit card, electronic transfer, or a similar method.

Any person can contribute to an ABLE/CalABLE account.

Note: Funds contributed to the ABLE/CalABLE account can be made by family, friends, or the ABLE/CalABLE designated beneficiaries themselves. “Person,” as defined by the Internal Revenue Codes, include an individual, trust, estate, partnership, association, company, or corporation.

Dividends paid from/accrued interest in the ABLE/CalABLE accounts

The interest is exempt as a resource/income for CalFresh eligibility.

Withdrawals/ distributions from the ABLE/CalABLE accounts

The qualified withdrawals/distributions, to pay for QDEs and for the benefits of the designated beneficiary, are exempt as a resource/income for CalFresh eligibility.

Annual ABLE/CalABLE contribution limit

Contributions to the ABLE/CalABLE accounts are limited to $15,000.

Maximum amount an eligible individual can have in a CalABLE account

Eligible California residents with disabilities can open an ABLE account in any state offering a national plan or a CalABLE account in California, and to save up to $475,000 in tax-exempt assets. ABLE/CalABLE participants receiving SSI or SSDI have a $100,000 limit.

Most NACF HHs in California are not required to meet the resource limit. HHs that are still subject to the resource limits are:

Elderly and/or Disabled HHs

Any NACF HHs in which there is at least one elderly or disabled member and their gross income is above 200% Federal Poverty Level (FPL) income limit. The gross income test is not applied to these HHs and only the net income test is applied.

Non-Categorical Eligibility HHs

HHs are not eligible for Modified Categorical Eligibility (MCE) and are; therefore, subject to all CalFresh eligibility requirements, including the resource limit and the gross income limit based on 130% of the FPL include the following:

A HH with a disqualified member such as an Intentional Program Violator (IPV), or a Fleeing Felon or Probation/Parole Violator; or
A HH, in which the head of HH does not comply with work requirements.

Note: A HH may be conferred MCE status once it is determined that the sanction period has expired and the HH meets all other conditions of MCE eligibility. AR 5823 Modified Categorical Eligibility provides the policies and procedures on MCE.

Verification Docs

Documentation and verification of ABLE/CalABLE accounts/account funds

ABLE/CalABLE accounts must be verified via third-party documentation and any discrepancies cleared and/or verified with the eligible NACF individuals with disabilities.

Note: The ABCDM 228, Applicant’s Authorization of Release of Information, must be signed and submitted with the request for a third-party documentation regarding the ABLE/CalABLE account verification.

Documentation and verification of contributions, dividends and interests to ABLE/CalABLE accounts

The eligible NACF HHs are encouraged to have individuals keep good records on the contributions, dividends, and interests related to their ABLE/CalABLE accounts.

Account statements, receipts, or letters are some examples of acceptable verification.

Documentation and verification of ABLE/CalABLE withdrawals/ distributions for QDEs

It is the responsibility of the eligible NACF individuals with disabilities with the ABLE/CalABLE accounts to ensure that account withdrawals/distributions meet the criteria for QDEs. It is encouraged that the individuals keep good records on any activities related to their ABLE/CalABLE accounts.

Purchase receipts, order confirmations, statements, or invoices are some examples of acceptable verification.

Attachments

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