Reform expands savings program for Michiganders with disabilities

A new federal rule doubles the number of Michiganders with disabilities who are eligible for special savings accounts
The accounts allow individuals to save for certain expenses — home and transportation, for example — without threatening access to Medicaid and other help
Previously, only people with recognized disabilities before their 26th birthday could use these accounts

A new federal rule expands the number of Michiganders with disabilities who can now save money without jeopardizing access to Medicaid and other benefits.

The expansion doubles the number of Michiganders who are eligible to about 1 million, according to MiABLE, a program administered by the Michigan Department of Treasury.

ABLE, or Achieving a Better Life Experience, accounts were created in 2014. They’re designed to enable people with disabilities to save for and pay for disability-related expenses, defined broadly as education, food, housing, transportation, employment training and support, assistive technology, personal support services, medical, prevention and wellness expenses, financial management, administrative services and legal fees.

Users can claim a state tax deduction for contributions to these accounts and withdrawals are free of federal and state taxes as long as the money is used for eligible expenses.

Without those accounts, individuals with disabilities who try to save money risk triggering asset limits and endangering benefits such as Medicaid, Supplemental Security Income (SSI), or housing and food benefits.

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Until this year, only those with a qualifying disability before their 26th birthday were eligible.

A new rule extends the age eligibility to 46 and is expected to make roughly six million more Americans eligible nationwide, including an estimated 1 million veterans across the US.

The change in age limits “reflects the simple truth that disability does not follow a timeline,” said R. Scott de Varona, executive director of MiABLE, the Michigan version of the program.

“It can happen because of an accident, an illness, a diagnosis or even a service-related injury that often happens later in adulthood,” de Varona said, speaking during a news conference Monday in which he urged eligible Michiganders with disabilities to tap into the program.

The ABLE Age Adjustment Act was approved by Congress in late 2022, to be effective this year. Last year, the One Big, Beautiful Bill, pushed by the Trump administration, made permanent several smaller provisions of the program. For example, 529 Education Savings Accounts can now be rolled over into ABLE accounts.

The Michigan Department of Treasury manages nearly 6,600 MiABLE accounts worth $87.9 million in assets, according to the program.

Still, just a small percentage of eligible residents is currently enrolled, largely because of a lack of awareness or confusion around the accounts, de Varona said.

Loved ones can contribute to the accounts, and many people with disabilities continue to work, de Varona said, referring to the accounts as “a tool for independence.”

Aaron Martinuzzi, a MiABLE account owner in Livonia, was in medical school in 2010 when he was paralyzed in a diving accident. He eventually began working again, but until he opened a MiABLE account, he had to keep his assets below $3,000 to protect his Supplemental Security Income.

“As a working person, I didn’t like the idea of spending to stay safe,” he said.

His MiABLE account has been a “major stress reliever,” he said, during the Monday announcement: “I could put money in the MiABLE account away from Social Security’s prying eyes.”

That, in turn, enabled Martinuzzi, a senior tax analyst, to save money to, for example, replace his old wheelchair-accessible van.

“The untaxed capital gains generated in my ABLE account were a big help paying off that vehicle,” he said. “My 401K and (conventional) savings account absolutely can’t compete with that.”

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