Using an ABLE Account for Employment Support
The Achieving a Better Life Experience (ABLE) Act, which was signed into law on December 19, 2014, aims at improving the financial stability of persons with disabilities by authorizing tax-advantaged savings accounts for people with disabilities, known as ABLE accounts. Assets in ABLE accounts can be used to cover any “qualified disability expense,” which can include housing, transportation, support services, and any other expense reasonably related to disability. Additionally, funds in the ABLE account will not be taken into consideration when determining eligibility for federally-funded means-tested benefits, such as Supplemental Security income (SSI) and Medicaid.
ABLE accounts create several economic options for people with disabilities that were largely unavailable previously because of their impact on federal benefit programs and disability support programs.
Alex Ghenis first heard about ABLE and ABLE accounts through his job at the World Institute on Disability. He says the organization had provided a wide array of financial education, including asset-building and work incentives, and ABLE was right at the front of their efforts. The more he learned about it, the more he felt encouraged to sign up.
Alex, who has a spinal cord injury, says having a disability affected his employment and asset-building opportunities in many ways. Among other things, including constraints related to his ability to earn due to income limits associated with being on public benefits, he faced savings limits that made him have to balance income and expenses. These constraints prohibited him from being able to save for his future and limited job opportunities simply because of his disability. Alex also has higher medical expenses that can affect his financial stability and economic future.
Alex says having an ABLE account opens up a huge amount of possibilities for his economic future. “Being able to save isn't just about putting money away; it's about being able to hold a higher-paying job and build a career, to invest and even learn about investing and to have some financial peace of mind.”
He plans on using his ABLE account for a variety of expenses, whether for emergency expenses or everyday bills like rent, groceries and the occasional medical expense, such as a new wheelchair part not covered by insurance. Through his ABLE account, Alex also hopes to save enough to pay for large, life-changing expenses as they come along.
ABLE accounts can help people with disabilities by giving them the ability to save for emergencies or other sudden expenses, in addition to short and long-term expenses. Lack of savings for sudden expenses can make it harder to keep a job. For example, if a person lacks savings and uses a car to commute to work, that person might not be able to fix the car in the event of a sudden breakdown and might lose their job. In the event of a sudden health care emergency, a person without savings may lose wages due to lost work time or have out-of-pocket health care expenses that are unexpectedly high. This sudden financial crisis may interfere with the person’s ability to pay for transportation to work or other work-related expenses, leading to job loss. Since the ABLE Act enables people to accumulate savings beyond previous asset limits, it may help people with disabilities retain employment by allowing them to save for these expenses.
In May, the LEAD Center will release a brief titled, “The ABLE Act and Employment: Maximizing the Effectiveness of the Achieving a Better Life Experience (ABLE) Act as a Tool for Increasing the Financial Stability and Employment Outcomes of People with Disabilities.”