WASHINGTON, DC -- President Obama has enacted the Achieving a Better Life Experience Act (ABLE) which will allow tax-free savings accounts to help individuals and families cover lifetime disability expenses. ABLE was a part of HR.5771, a tax-extender bill signed into law without comment by the President.
The ABLE Act was sponsored in the Senate by Senators Bob Casey (D-PA) [left] and Richard Burr (R-NC) and attracted 76 cosponsors. It passed the Senate 76-16 just days after clearing the House on a 404-17 vote.
ABLE will allow individuals will disabilities to protect or qualify for Supplemental Security Income (SSI) and Medicaid by eliminating a $2,000 cap that now applies to conventional savings accounts. The federal government must first determine eligible expenses before the accounts become available, which is expected late in 2015.
"Millions of Americans are currently living with disabilities, and many of them have also had to endure significant uncertainty about their ability to cover basic expenses in the future," said Casey. "They have struggled to keep up with the rising cost of housing, transportation and medical assistance. A growing number of Americans with disabilities are outliving their parents, and are forced to rely on government assistance when family support disappears. This is partly because Americans with disabilities have not had the same incentives to save that other Americans enjoy.
"The ABLE Act changes this unfair situation by creating tax-advantaged plans for disability-related incentives, and by allowing Americans with disabilities to save without losing eligibility for government programs," he added.
Casey credited Autism Speaks, the National Down Syndrome Society (NDSS) and other advocacy groups for helping drive support for ABLE. The bill was renamed in honor of Steve Beck, a former Board member of NDSS and driving force behind the bill who died suddenly in early December.
"Some have called the ABLE Act the most significant piece of legislation affecting the disabled since passage of the American Disabilities Act nearly 25 years ago," said Burr. "Families of severely disabled children came to us expressing the critical need for an easy way to save for their child's future expenses, especially since many Americans with Down Syndrome and autism are now outliving their parents.
"Most middle-class families don't have the money to spend on lawyers and financial planners to set up sophisticated trusts to make sure that their disabled child will be OK long after they are gone. What's worse, current federal law actually discourages parents from putting any assets in the name of their disabled child in fear of disqualifying them from federal programs down the road," he added.
"It's utterly unacceptable that our current laws doom a child born with a disability to a lifetime of poverty and dependence. This is especially unfortunate when a parent or other family member has the resources and the desire to save and plan for that child's future expenses but are advised by lawyers and planners not to. The ABLE Act will take the first critical step in ending this injustice."
