House Approves Tax-Free Disability Savings Accountsby MICHELLE DIAMENT
U.S. House members voted overwhelmingly to pass the ABLE Act on Wednesday. The legislation, which would allow people with disabilities to save money without jeopardizing eligibility for government benefits, now heads to the Senate. (Thinkstock)
The U.S. House of Representatives has voted to approve a bill that would establish a new way for people with disabilities to save money without risking their government benefits.
The Achieving a Better Life Experience, or ABLE, Act passed by a vote of 404 to 17 on Wednesday. The measure will now move to the Senate.
Under current rules, many individuals with disabilities can have no more than $2,000 in assets in order to qualify for needed government benefits. The ABLE Act would dramatically alter that scenario, allowing people with disabilities to establish special accounts at any financial institution where they could save up to $14,000 annually under current gift-tax limitations.
The accounts could accrue $100,000 without jeopardizing eligibility for Social Security and other government programs. Meanwhile, the legislation ensures that those with disabilities can retain Medicaid coverage no matter their ABLE account balance.
Funds deposited in the proposed accounts could be used to pay for education, health care, transportation, housing and other expenses. Much like 529 college savings plans, interest earned on savings in the accounts would be tax-free.
Speaking on the House floor ahead of the vote, the bill’s lead sponsor, Rep. Ander Crenshaw, R-Fla., said it’s only fair that people with disabilities get an opportunity to save tax-free much like most Americans can already do in order to pay for college, health care and retirement.
“What this does is simply give individuals with disabilities a chance at the American dream,” Crenshaw said. “They have hopes and dreams just like we all do and this will give them the tool to open the door to a brighter future, the way to realize their full potential.”
With significant bipartisan support, the bill is being called the broadest legislation centering on people with disabilities to move forward since passage of the landmark Americans with Disabilities Act a quarter-century ago.
Though widely supported in the disability community, a provision limiting eligibility for ABLE accounts to individuals with conditions occurring before the age of 26 has led to misgivings from some groups including the National Council on Independent Living, the National Disability Rights Network and United Cerebral Palsy.
Meanwhile, some members of the House objected to the bill over concerns that it will be paid for in part through tweaks to Medicare.
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Jack Darakjian
Modern Support Services
jackdarakjian@modernsupportservices.org
Modern Support Services
jackdarakjian@modernsupportservices.org
818-244-2677 Ext. 101
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Lawmakers Poised To Vote On ABLE Act by MICHELLE DIAMENT
The ABLE Act would allow people with disabilities to create special accounts where they could save money to pay for education, housing and other needs. (Gary O’Brien/Chalotte Observer/TNS)
Congress is set to act this week on legislation that would allow people with disabilities to save money without jeopardizing their government benefits.
Supporters say they expect the U.S. House of Representatives to vote on the Achieving a Better Life Experience, or ABLE, Act on Wednesday and they’re hopeful that the Senate will follow suit on Thursday.
“This is historic for the disability community,” said Sara Weir, interim president of the National Down Syndrome Society, which has pushed for the ABLE Act since 2006. “I can’t think of another piece of legislation that puts a stake in the ground that says that people with disabilities can work and save money.”
under current gift-tax limitations. As much as $100,000 could be saved in the proposed accounts without risking eligibility for Social Security and other government benefits. Moreover, individuals could retain Medicaid coverage no matter how much money is deposited.
Modeled after the popular 529 college savings plans, interest earned on savings within the accounts would be tax-free. Money saved could be used to pay for education, health care, transportation, housing and other expenses.
With 85 percent of Congress co-sponsoring the bill, it is widely thought to have the votes needed for approval. However, the legislation is not without its critics.
Both the National Council on Independent Living and the National Disability Rights Network have taken issue with a requirement that an individual’s disability must have occurred prior to age 26 in order to qualify for an ABLE account.
“It’s completely arbitrary,” said Kelly Buckland, executive director of the National Council on Independent Living. “Why 26? Why not 27, or 28 or 30?”
Meanwhile, the conservative group The Heritage Foundation has attacked the bill as a “decisive step in expanding the welfare state.”
Weir from the National Down Syndrome Society said that assessment could not be further from the truth.
“This is a bill that allows families and people with disabilities to save their own money. This is not a handout,” she said.
Jack Darakjian
Modern Support Services
jackdarakjian@modernsupportservices.org
jackdarakjian@modernsupportservices.org
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