Potential Legislation Aims to Expand Savings Options for People with Disabilities
People with disabilities recently received a potential financial jolt when Congress pushed forward a number of bills this month that would update the Achieving a Better Life Experience Act, known as the ABLE Act.
In 2014 the ABLE Act became law, allowing people with disabilities to open special accounts where they can save up to $100,000 without affecting their status with Social Security or other government benefits, including Medicaid. Under the current legislation, these people are only allowed to deposit $14,000 per year into these accounts.
A new bill called the ABLE to Work Act would update this amount, doubling the amount one could in these accounts. The ABLE Financial Planning Act has also moved forward, and would allow families to transfer over money saved in a 529 college saving plan for a child with disability to an ABLE savings account.
Both of these measures were pushed forward by the U.S. Senate Committee on Finance this month. This is one of the first bills that would give people with disabilities the opportunity not to have to choose between full time employment and receiving much needed benefits.
“Especially for ABLE to Work, this is the most proactive improvement because we’re looking at ABLE as a way to incentivize employment,” says Sara Hart Weir, president of the National Down Syndrome Society.
Four states already have the program available, while over a dozen more are anticipated to offer the program this year. Anyone nationwide can use the program through the states it is already offered. Though not considered yet, there is another update of the ABLE Act being discussed.
This change would allow people that have disability by age 46 to set up an account, as the current cut off is 26. This would allow people who obtain a disability later in life to still qualify and set up an account under the ABLE Act.
Along with the updates to the ABLE Act, the U.S. House of Representatives also approved legislation regarding people with disabilities establishing trusts. The Special Needs Trust Fairness and Medicaid Improvement Act allows people with disabilities to set up their own special needs trust. The current law requires a person’s family member to set up the trust unless a petition is passed through the court.
“This is a fundamental issue of equal protection under the law for those who are facing life-changing disease or disability,” said U.S. Rep. Glenn Thompson, R-Pa.