The New Jersey Achieving a Better Life Experience (ABLE) Act became law on January 11, 2016, it becomes effective on October of 2016. While due to its limitations it does not replace the special needs trust, it will be a cost effective way to assist individuals with disabilities.
Under the new Act the New Jersey’s Department of the Treasury and the New Jersey’s Department of Human Services must establish the ABLE Program pursuant to federal law. Under the program, individuals who became disabled before they attained the age 26 and who are also able to meet the disability requirements for Social Security disability benefits are permitted to establish an ABLE account, and they themselves can be the beneficiary of that account. The purpose of an ABLE account is to enable people with disabilities and their families to save and pay for disability-related expenses.
An ABLE account is not subject to state income tax, and it will not be considered to determine the beneficiary’s eligibility for need-based public benefit programs or to determine the level of any benefit provided under such a program. However, a disabled individual can only have one ABLE account established for their benefit.