Members of Congress Re-Introduce ABLE Improvement Bills
On April 4th, a bi-partisan group of Members of Congress, including Senators Richard Burr (R-NC), Bob Casey (D-PA), Jerry Moran (R-KA), and Chris Van Hollen (D-MD) and Representatives Pete Sessions (R-Texas), Cathy McMorris Rodgers (R-Wash.), Tony Cardenas (D–Calif.) and Mike Doyle (D-Pa.), introduced a package of bills (however filed independently of each other) aimed at enhancing the benefits provided through the Stephen Beck Jr., Achieving a Better Life Experience (ABLE) Act. This package of bills consists of the following three pieces of proposed legislation:
The ABLE Age Adjustment Act (S. 817/HR 1874) would raise the age limit for ABLE accounts to age 46. Currently, individuals with a severe disability that occurred prior to the age of 26 are eligible to open an ABLE account. Many debilitating diseases and conditions can occur later in life, including
multiple sclerosis, Lou Gehrig’s disease, or paralysis due to an accident. Increasing the age limit for ABLE accounts will allow more individuals to save money to help cover the costs of short-, medium and long-term disability related expenses.
The ABLE Financial Planning Act (S. 816/HR 1897) would allow families to rollover savings in a 529 college savings plan into an ABLE account. Many families save for a child’s college education by opening a 529 account, sometimes before their child is even born, only to learn later that their child
has a severe disability. In such instances, these families have funds trapped in a 529 that they could use to help cover their child’s lifelong disability-related expenses. But if they withdraw the funds for anything other than college expenses, they face taxes and penalties on their withdrawals. The ABLE Financial Planning Act would help these families by allowing them to transfer funds from their 529 account without penalty into an ABLE account for their child with a qualified disability. It is important to note that the rollover from a 529 to a 529 ABLE account would still be subject to the annual contribution limit (currently $14,000).
The ABLE to Work Act (S. 818/HR 1896) would allow individuals and their families to save more money in an ABLE account if the beneficiary works and earns income. Specifically, in addition to the $14,000 annual contribution cap, an ABLE beneficiary who earns income from a job could contribute from his/her compensation up to the Federal Poverty Level, which is currently at $11,770 (potentially increasing allowable annual contributions to $25,770). These additional funds into the ABLE account would only be allowed if the beneficiary was not participating in his/her employer’s retirement plan (ex: 401k). The bill will also allow ABLE beneficiaries to qualify for the existing Saver’s Credit when they contribute savings to their ABLE account. It is important to note that beneficiaries would still be subject to the caps related to earned income and substantial gainful employment (SGA). This bill would not allow individuals with disabilities the ability to disregard earned income (even if it is contributed to their ABLE account) for purposes of eligibility for SSI and Medicaid.
ABLE Accounts (Achieving a Better Life Experience)
ABLE accounts help individuals save, while preserving their SSI and Medicaid. Eligible applicants can save for qualified disability expenses without losing eligibility for certain assistance programs, like SSI and Medicaid.
Under the law, a person with a disability and that person’s family may put money into a special tax-advantaged account. The first $100,000 in an ABLE account will not count against the $2000 Supplemental Security Income (SSI) resource limit, nor will it count against asset limits other programs, such as Medical Assistance, may have.
The earnings on your investments are federally tax-deferred and tax-free, if used for qualified disability expenses.
Eligible individuals can open the account for themselves, or an authorized individual can open an account on their behalf. There are a few requirements that individuals with disabilities must meet to be able to have an account.
You’re eligible if:
- Your disability was present before the age of 26; and
- One of the following is true:
- You are eligible for SSI or SSDI because of a disability.
- You experience blindness as determined by the Social Security Act; OR
- You have a similarly severe disability with a written diagnosis from a licensed physician that can be produced if requested.
What are Qualified Disability Expenses?
These are ANY expenses that are incurred as a result of living with a disability and are intended to improve your quality of life.
Qualified expenses include, but are not limited to:
- Health and wellness
- Legal fees
- Financial management
- Employment training and support
- Assistive technology
- Personal support services
- Oversight and monitoring
- Funeral and burial expenses
For more information visit ABLE Nevada
If you are uncertain of how your Account will impact your State benefits, ask your care coordinator at the state agency you are affiliated with. For general information about ABLE Nevada accounts, dial 2-1-1; text 898-211; or visit www.nevada211.org.