The ABLE Act: A Summary
Thursday, June 5th 2014
Hello everyone! Thanks for joining us today.
We have been having an incredibly busy week here at M&L; as many of you may know from our social media feeds, the Center for Independent Futures (CIF) is currently in Washington D.C. to partner with M&L and deliver their New Futures Initiatives training. The training took place yesterday, and continues today (June 5th and 6th). For more information on how our session went, please stay tuned – next week we will be publishing a blog on all that we have learned so far. As well, we are delivering a housing workshop on July 23rd that will discuss this training, and provide updates on upcoming training sessions, and the next steps towards developing special needs housing in Maryland, Washington, D.C. and Virginia – if you are interested in registering for this workshop, or in learning more, please contact us!
Despite the fact that we are smack dab in the middle of that training, we are still committed to ensuring that we publish our weekly blog right on time. Last week, we focused on the Social Security Administration (SSA) and the changes that have been made to the way that the SSA reviews Special Needs Trusts when evaluating SSI applications. Today, we will be sticking to the same sort of theme; we will be examining a piece of legislation that, if approved, will be incredibly beneficial to individuals with disabilities. This legislation is called the ABLE act, and, as one special needs advocate put it, “puts a stake in the ground so people [with disabilities] can live independently, work, go to college.” Please read on for a brief description of the ABLE act, why it is important to individuals with disabilities and their families, and how you can help to ensure that this important piece of legislation gets passed.
The ABLE Act: What is it?
In order to fully understand the benefits of the ABLE act, one has to be familiar with Section 529 of the Internal Revenue Service Code. This section allows individuals in the United States to create tax free savings accounts with the purpose of creating an educational savings fund for a designated beneficiary, such as a child or grandchild. Earnings from this account are not subject to federal tax and generally not subject to state tax when used for qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board[i]. (Note: for more information on Section 529, please click here.)
The ABLE act, if passed, would amend Section 529 to allow for the creation of tax free savings accounts for persons with disabilities. This account – which would closely resemble the above 529 college savings accounts – would help “ease the financial strains for individuals by making tax-free savings accounts available to cover qualified expenses such as education, housing, and transportation.”
It is important to know that this bill aims to supplement, not replace, federal benefits and benefits provided through Medicaid, private insurance, and employment.
How Can the ABLE Act Help My Family with Special Needs?
Due to its incredible potential to help individuals with disabilities and their families, there is a plethora of information on the ABLE act and its benefits published online by a number of special needs organizations and advocates. One of the more detailed examinations of this account was provided by the National Down Syndrome Society (NDSS). The NDSS is an avid advocate for this bill and they see many, many benefits to having it passed. According to that organization’s website: “An ABLE account could fund a variety of essential expenses for individuals, including medical and dental care, education, community based supports, employment training, assistive technology, housing, and transportation. The ABLE Act provides individuals with disabilities the same types of flexible savings tools that all other Americans have through college savings accounts, health savings accounts, and individual retirement accounts.”
Here at M&L, we wholeheartedly agree with the NDSS’ assessment of the benefits of the ABLE act. As financial and life planners, we are continuously looking for ways to maximize the savings and financial assets of individuals with special needs and their families, all the while retaining that individuals eligibility for government benefits. The only legal solution which currently exists that would serve both of these purposes is the Special Needs Trust – the ABLE act would provide a viable alternative. And, while both are certainly suitable for long term planning (i.e. designed to supplement benefits after the individual with disabilities caregivers/parents are gone,) the ABLE act has certain advantages that the Special Needs Trust does not.
To begin, the Special Needs Trust is certainly more expensive and complicated to establish than the ABLE account would be; and, there are still inherent risks. I.e. if the special needs trust isn’t designed correctly, by professionals who are experienced with writing these types of legal documents, it may still jeopardize the individual’s eligibility. Considering the SSA’s new, tighter reviewing regulations on the Special Needs Trust (see last week’s blog for more information) this can be a concern for caregivers of individuals with special needs. Secondly, the ABLE act would allow for increased self-determination and autonomy for individuals with special needs, as the beneficiary can exercise control over the account without jeopardizing eligibility.
How Can I Help to Get This Act Passed?
The ABLE act was first introduced in house on February 13th, 2013 – more than a year later, it has yet to be passed. If you would like to do your part towards ensuring that this valuable piece of legislation gets signed into law, there are a number of different options available to you.
To begin, you could visit this change.org website, and sign the petition. It was written and posted by Sara Wolff, a NDSS Board Member and Self Advocate. The petition currently has over 200,000 signatures. You could also check to see if your senators and representative cosponsored the Act (either the 2011 or the 2013 versions) by following co-sponsor links posted on the NDSS website – they have also posted social media templates to help you reach out to your senators and representative. Last (but not least) you could always send a letter with your own petition to your federal representatives.
If you have already taken the above steps to support this bill, you could always continue to help by spreading the word to family and friends! Feel free to copy and paste this blog into any correspondence you may send to help educate others on the importance of the ABLE Act to the special needs community. The bill’s progress through the house can be tracked by visiting this link.
Where Can I Access More Information?
As mentioned, there are a number of informative websites that have posted detailed descriptions of the ABLE act, its benefits, and what it would mean to individuals with disabilities should the act get passed. Please see the below list of resources for links to just a few of these websites:
As well, if you would like more information on the ABLE act, and how it can affect your family with special needs please give us a call! Or send an email, or write a comment on this blog – we figure out how to best help our clients be receiving feedback, and talking through their concerns with them. We would love to hear from you regarding your plans to save for the future of your loved one with a disability – for more information regarding the specific services that we provide, please visit our services webpage, or check out our workshop series.
Thanks again for dropping by! Don’t forget to stop by again next week to check out our discussion of the CIF and the New Futures Initiatives training – as well as an update on our special needs housing development projects. Have a great weekend
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