Proposed Amendments to Increase the Benefits of the ABLE Act

The U.S. Senate Committee on Finance recently proposed enhancements to the Achieving a Better Life Experience (ABLE) Act which would increase the amount of money that can be contributed to ABLE accounts. However, advocate groups say the enhancements don’t go far enough.

The ABLE Act allows people with disabilities to establish tax-free savings accounts where they can save up to $100,000 without compromising their Social Security and Medicaid benefits and many states have enacted legislation increasing that amount to maintain Medicaid. Under the current federal law, individuals who have a disability that occurred before age 26 can deposit up to $14,000 in an account each year.

Although the Senate committee approved language that would allow those covered by ABLE to save more money in their ABLE accounts, it failed to expand coverage by raising the age of disability onset above 26. Because raising this age would remedy a concession made when the Act was passed in 2014, disability advocates are calling on lawmakers to honor the original intent and support individuals with disabilities by making that change.

The two separate measures that the committee approved are the ABLE to Work Act (S.2702/HR 4795) and the ABLE Financial Planning Act (S.2703/HR4794). The first nearly doubles the amount people with disabilities who work could save each year, adding up to $11,770 in earnings to the $14,000 already allowed. The second permits families to roll over the money they had saved for a person with a disability in a 529 college savings plan into an ABLE account.

The committee’s failure to approve a third measure, the ABLE Age Adjustment Act (S.2704/HR 4813), is what has many disability advocates upset. That measure would raise the age-of-onset from 26 to 46, allowing people whose disability occurred before age 46 to take advantage of an ABLE account and greatly increase the number of individuals who would benefit from ABLE accounts.

In letters to the U.S. House and Senate leadership, The Consortium for Citizens with Disabilities made clear that it wants all or nothing, writing: “The Task Force cannot support, and will oppose, regardless of merit, movement of any legislation that aims to increase the benefits of currently eligible individuals, while ignoring the needs of individuals with disabilities solely based on the age when that individual first experienced their disability.”

Not all disability advocacy groups agree, however. Autism Speaks and the National Down Syndrome Society, both staunch advocates of the original legislation, back moving ahead with the two approved bills. Sara Hart Weir, president of the National Down Syndrome Society, believes that the benefits provided by the first two acts, whose costs are deemed negligible, are too good to pass up while a solution to the extremely high costs of the Age Adjustment Act is worked out.

Regardless of failure to pass the third measure, the full Senate needs to vote on the proposed enhancements to expand contributions. In the interim, it is very important to consider ABLE accounts are part of your future care plan and equally important to remain informed of the legislative changes with ABLE accounts.

At Pierro, Connor & Associates, LLC, we work with individuals with disabilities and special needs and are available to meet with you to develop a plan for you or a loved one. Please contact us at 518-459-2100 or CLICK HERE to schedule your complimentary consultation today.