ABLE Act Helps Individuals with Disabilities Save
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The “Achieving a Better Life Experience Act” or the ABLE Act, which was first introduced in the Congress in 2009 as H.R. 1205, was reintroduced recently.
H.R. 3423 was introduced on November 15th by Andrew Crenshaw (R-FL) and Cathy McMorris Rodgers (R-WA) and in the Senate as S.1872 by Robert Casey (D-PA) and Richard Burr (R-NC). The bill, which has bipartisan support, would amend Section 529 of the tax code to provide tax-free savings accounts for individuals with disabilities.
The 2011 version of the ABLE Act, though similar to the original version, differs slightly. Unlike the original bill, which had a maximum allowable cap of $500,000 in savings, under the 2011 version the accounts would be governed by the same regulations as 529 college savings accounts, in which amount limits are determined on a state-by-state basis. Another change is that, if an individual has an ABLE account, he or she will continue to receive Medicaid benefits, however, if the individual's ABLE account balance exceeds $100,000, his or her Supplemental Security Income (SSI) benefits, if any, will be suspended until the balance goes below $100,000 at which point SSI benefits will be reactivated without a need to reapply.
Funds in ABLE accounts can be used for “qualified disability expenses.” These include transportation, employment support, health prevention and wellness, assistive technology and personal support, miscellaneous expenses as well as housing and education. Individuals eligible to open an ABLE account are those who are receiving SSI, disability benefits, or who have been determined to have a psychological or mental impairment which results in severe functional limitations, including blindness, for a continuous, 12-month period.
The Arc, a disability advocacy group, joined the sponsors of the bill along with other advocates at a press conference on Capitol Hill on November 15th as the bill was introduced. As Peter V. Berns, Arc’s CEO explained:
The ABLE Act is about giving people with intellectual and developmental disabilities the opportunity to achieve their dreams. Families are looking for ways to finance things like an apartment, or a ride to work, or additional educational opportunities after high school that don’t jeopardize other necessary services provided by federal programs. This bill creates a tool for families that could lead to a more independent and fulfilling life.
To learn more about the ABLE Act and to compare both versions of the bill, please refer to this chart.
