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Pass the ABLE Age Adjustment Act in This Congress!
October 3, 2018
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White House Marks Passage Of ABLE Act
2/10/15. More than a month after enacting a law allowing people with disabilities a new way to save money, the White House is celebrating what’s being hailed as landmark legislation. Vice President Joe Biden will host members of Congress and disability advocates Tuesday afternoon at the Eisenhower Executive Office Building for an event marking the passage of the Achieving a Better Life Experience, or ABLE, Act. The law, signed by President Barack Obama in late December, paves the way for people with disabilities to open special accounts where they can save up to $100,000 without jeopardizing eligibility for Social Security and other government benefits. Tuesday’s event is expected to bring together advocates who lobbied for the ABLE Act and more than a half-dozen lawmakers instrumental in passing the legislation including U.S. Sen. Bob Casey, D-Pa., Sen. Richard Burr, R-N.C., Rep. Cathy McMorris Rodgers, R-Wash., and Rep. Ander Crenshaw, R-Fla. Sara Wolff, who has Down syndrome and testified before Congress about the significance of the ABLE Act, is expected to speak at the White House ceremony. Passage of the ABLE Act altered federal law to allow for the new accounts. However, each state must now put regulations in place in order for financial institutions to make the accounts available. So far, about 10 states have taken steps to allow for ABLE accounts and advocates recently met with officials at the U.S. Department of the Treasury to discuss federal regulations, according to Sara Weir, president of the National Down Syndrome Society which led efforts to lobby for the law.
Obama Budget Calls For Boost To Disability Programs
2/6/15: On Monday, President Obama sent his fiscal year 2016 budget to congress for $290 million to stop the sequestration and increase funding for special Education and other programs for people with disabilities. The president is proposing for $4 trillion as part of his budget plan. The U.S. Department of Housing and Urban Development would have an additional $35 million under Obama’s proposal to provide assistance for 700 new households for persons with disabilities. Meanwhile, following the passage of legislation last year requiring most young people with disabilities to seek out competitive, integrated employment, the president wants $56.7 million added to vocational rehabilitation programs. The president is also using his budget plan to call for expanded access to home and community-based services. The president is proposing a pilot program in five states designed to bring an end to what’s known as Medicaid’s institutional bias. States participating in the program would be “authorized to provide long-term care services across the continuum of care under one authority, creating equal access to home and community-based care and nursing facility care,” the administration said. The president’s budget blueprint is widely expected to face opposition from Republicans, who lead both houses of Congress.
NAMPWD Position: We commend the administration on trying to forge ahead on meeting the needs of people with disabilities, especially in the area of vocational rehabilitation, in addition to Individual with Disability Education Act (IDEA) and special education services. From the various unending loopholes to access key early intervention programs that have proven to eradicate so many pitfalls of this debilitating services. The truth behind it is always in whether the states and the federals can work together to make sure increased funding truly ends up helping more individuals. We commend the administration also highlighting needs for increased funding in the face of certain opposition. Of course there will be opposition. But if we put the ego of politics away and face the reality, this is a necessity. We believe the President has done his job trying to make the life of people with disability more meaningful. Now, let’s see the Republican majority come through for the American people.
ABLE Accounts: 10 Things You Must Know
- What is an ABLE account?
ABLE Accounts, which are tax-advantaged savings accounts for individuals with disabilities and their families, will be created as a result of the passage of the ABLE Act of 2014. Income earned by the accounts would not be taxed. Contributions to the account made by any person (the account beneficiary, family and friends) would not be tax deductible.
- Why the need for ABLE accounts?
Millions of individuals with disabilities and their families depend on a wide variety of public benefits for income, health care and food and housing assistance. Eligibility for these public benefits (SSI, SNAP, Medicaid) require meeting a means or resource test that limits eligibility to individuals to report more than $2,000 in cash savings, retirement funds and other items of significant value. To remain eligible for these public benefits, an individual must remain poor. For the first time in public policy, the ABLE Act recognizes the extra and significant costs of living with a disability. These include costs, related to raising a child with significant disabilities or a working age adult with disabilities, for accessible housing and transportation, personal assistance services, assistive technology and health care not covered by insurance, Medicaid or Medicare.
For the first time, eligible individuals and families will be allowed to establish ABLE savings accounts that will not affect their eligibility for SSI, Medicaid and other public benefits. The legislation explains further that an ABLE account will, with private savings, “secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, Medicaid, SSI, the beneficiary’s employment and other sources.”
- Am I eligible for an ABLE account?
Passage of legislation is a result of a series of compromises. The final version of the ABLE Act limits eligibility to individuals with significant disabilities with an age of onset of disability before turning 26 years of age. If you meet this criteria and are also receiving benefits already under SSI and/or SSDI, you are automatically eligible to establish an ABLE account. If you are not a recipient of SSI and/or SSDI, but still meet the age of onset disability requirement, you would still be eligible to open an ABLE account if you meet SSI criteria regarding significant functional limitations. The regulations to be written in 2015 by the Treasury Department will have to explain further the standard of proof and required medical documentation. You need not be under the age of 26 to be eligible for an ABLE account. You could be over the age of 26, but must have the documentation of disability that indicates age of onset before the age of 26.
- Are there limits to how much money can be put in an ABLE account?
The total annual contributions by all participating individuals, including family and friends, is $14,000. The amount will be adjusted annually for inflation. Under current tax law, $14,000 is the maximum amount that individuals can make as a gift to someone else and not pay taxes (gift tax exclusion). The total limit over time that could be made to an ABLE account will be subject to the individual state and their limit for education-related 529 savings accounts. Many states have set this limit at more than $300,000 per plan. However, for individuals with disabilities who are recipients of SSI and Medicaid, the ABLE Act sets some further limitations. The first $100,000 in ABLE accounts would be exempted from the SSI $2,000 individual resource limit. If and when an ABLE account exceeds $100,000, the beneficiary would be suspended from eligibility for SSI benefits and no longer receive that monthly income. However, the beneficiary would continue to be eligible for Medicaid. States would be able to recoup some expenses through Medicaid upon the death of the beneficiary.
- Which expenses are allowed by ABLE accounts?
A “qualified disability expense” means any expense related to the designated beneficiary as a result of living a life with disabilities. These include education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services and other expenses which will be further described in regulations to be developed in 2015 by the Treasury Department.
- Where do I go to open an ABLE account?
Each state is responsible for establishing and operating an ABLE program. If a state should choose not to establish its own program, the state may choose to contract with another state to still offer its eligible individuals with significant disabilities the opportunity to open an ABLE account.
After President Obama signs the ABLE Act, the Secretary of the Department of Treasury will begin to develop regulations that will guide the states in terms of a) the information required to be presented to open an ABLE account; b) the documentation needed to meet the requirements of ABLE account eligibility for a person with a disability; and c) the definition details of “qualified disability expenses” and the documentation that will be needed for tax reporting.
No accounts can be established until the regulations are finalized following a public comment period on proposed rules for program implementation. States will begin to accept applications to establish ABLE accounts before the end of 2015.
- Can I have more than one ABLE account?
No. The ABLE Act limits the opportunity to one ABLE account per eligible individual.
- Will states offer options to invest the savings contributed to an ABLE account?
Like state 529 college savings plans, states are likely to offer qualified individuals and families multiple options to establish ABLE accounts with varied investment strategies. Each individual and family will need to project possible future needs and costs over time, and to assess their risk tolerance for possible future investment strategies to grow their savings. Account contributors or designated beneficiaries are limited, by the ABLE Act, to change the way their money is invested in the account up to two times per year.
- How many eligible individuals and families might benefit from establishing an ABLE account?
There are 58 million individuals with disabilities in the United States. To meet the definition of significant disability required by the legislation to be eligible to establish an ABLE account, the conservative number would be approximately 10 percent of the larger group, or 5.8 million individuals and families. Further analysis is needed to understand more fully the size of this market and more about their needs for new savings and investment products.
10. How is an ABLE account different than a special needs or pooled trust?
An ABLE Account will provide more choice and control for the beneficiary and family. Cost of establishing an account will be considerably less than either a Special Needs Trust (SNT) or Pooled Income Trust. With an ABLE account, account owners will have the ability to control their funds and, if circumstances change, still have other options available to them. Determining which option is the most appropriate will depend upon individual circumstances. For many families, the ABLE account will be a significant and viable option in addition to, rather than instead of, a Trust program.
12/15/14 : CONGRESS PASSES ABLE ACT
Today marks a new day in our country’s understanding and support of people with disabilities and their families. The U.S. Senate voted overwhelmingly to send legislation to the president establishing a new way for people with disabilities to save money without risking their government benefits. Lawmakers voted 76 to 16 to approve the bill as part of a package of tax measures Tuesday evening. The legislation will now go to President Barack Obama to sign. The bill has been under consideration since 2006 and was recently renamed the Stephen Beck, Jr. Achieving a Better Life Experience Act of 2014. A longtime proponent of the bill, Beck died unexpectedly earlier this month. The ABLE Act would allow people with disabilities to establish special accounts where they could save money to pay for education, health care, transportation, housing and other expenses. Individuals could deposit up to $14,000 annually under current gift-tax limitations and accrue as much as $100,000 without risking eligibility for Social Security and other government programs. Meanwhile, the bill ensures that people with disabilities can retain Medicaid coverage no matter how much money is saved in their ABLE account. This puts a stake in the ground that people with disabilities, for the first time ever, can work and save money for the future and the accounts are modeled after 529 college savings plans and interest earned on savings would be tax-free. The bill does include some limitations, however. Each person may only have one ABLE account and to qualify a person must have a condition that occurred before the age of 26. This indeed is a Victory for people with disabilities.
For further Information, please click on the link above.
The ABLE Act
Formerly entitled the “Achieve a Better Life Experience” Act, the ABLE Act was reintroduced to the House of Representatives in 2011 with bi-partisan support. Despite being overshadowed by the Affordable Care Act and miscellaneous economic reforms, this act has the potential to directly and positively impact the lives of persons with disabilities.
The goal of the bill is to achieve a better economic future for people with disabilities. The concept behind the ABLE Act is that individuals with disabilities and their families will be able to set aside “distinguished funds” in a tax-advantaged savings account. These funds, protected the ABLE account, maintain the capacity to financially assist with health care, housing, employment support, transportation, as well as additional miscellaneous supports.
The ABLE Act would provide the disability community with access to a protected savings account that offers the same benefits as a 529, or tuition account. In the same way that parents allocate money into a 529 account for the future of their children, the ABLE Act would permit persons with disabilities to save responsibly for the long term support they or their family may need.
Also important to note, is that rather than state-run programs such as SSI, Medicaid and Social Security, the funds protected under the ABLE Act do not have a specific allocation. The ABLE Act truly grants individuals with disabilities and their families the right to discern the support in which they receive – reflecting a larger, person-centered approach to care.
Additionally, the ABLE Act and the funds contributed by individuals and their families to their ABLE account do not affect the individual’s eligibility for SSI, SS or Medicaid benefits. Individuals are still eligible for their state benefits so long as there is less than $100,000 in the ABLE account. Furthermore, all individuals who receive Medicaid benefits would continue to receive their benefits regardless of the savings in their ABLE account.
The ABLE act has received large bipartisan support in the past due to the fact that the overall goal of the act has been to promote independency in support services received, as well as to reduce the dependency on public benefits in the long term. This approach is a unique compromise for the legislative branch- especially in the recent divisive history – in which a program that supports the individual’s needs of those with disabilities simultaneously promotes fiscal independence. That being said, the ABLE act was reintroduced in November of 2011 to the House of Representatives. Despite support from both sides of the political spectrum, it was not passed onto the Senate due to lack of time.
The New American Movement for People with Disabilities has continued hope that the ABLE Act will return to legislation with the capacity to capture support from Republican and Democratic representatives. The ABLE Act is not a question of greater spending on behalf of the government; rather it will provide individuals with financial flexibility. The initiative proposed in the ABLE Act is essential to the disability community attaining the autonomy and preferential support granted to all American citizens.
Sources:
http://www.govtrack.us/congress/bills/112/hr3423/text
http://blog.thearc.org/tag/able-act/ – “Greater Financial Flexibility”