Congress has passed the Achieving a Better Life Experience (ABLE) Act this week, which promises to help individuals with disabilities and their families save for disability-related expenses and proactively plan for their futures. The ABLE Act would allow a single tax-free savings account to be established for individuals who were disabled before the age of 26.
These individuals could save $14,000 per year to pay for future health-care costs, housing, lifelong education, transportation, and other necessary expenses. Such accounts would resemble 529 college savings plans and anyone would have the opportunity to contribute to them, as long as total contributions do not exceed $14,000 annually. Additionally, individuals would not forfeit their eligibility for Medicaid, Social Security Income (SSI), or other governmental benefit programs as would be the case under existing law. ABLE accounts are meant to supplement and not replace these benefits, though it should be noted that if the account surpasses the maximum amount of $100,000, then SSI payments would be suspended. Funds remaining in the account at the death of the beneficiary must be paid to the state up to the amount of Medicaid benefits provided after the account was established. The bill will now be sent to President Obama, who is expected to sign it.
- Posted by Hickman & Lowder Staff