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Congress Considering Bills that Would Expand the Amount Working People with Disabilities Can Save in ABLE Accounts

April 29, 2016

Three bills were recently introduced in Congress that would expand the flexibility and the number of people who have access to the tax-advantaged savings accounts created by the Achieving a Better Life Experience Act (ABLE). The bills are the ABLE To Work Act (H.R. 4795, S 2702), the ABLE Financial Planning Act (H.R. 4794, S.2703), and the ABLE Age Adjustment Act (H.R. 4813, S.2704).  The ABLE Act currently allows beneficiaries to save up to anywhere from $250,000 to $500,000 total, up to $100,000 without impacting their Supplemental Security Income (SSI), and $14,000 annually without impacting their eligibility for federally-funded means-tested benefits, such as Social Security and Medicaid.  It is important to note, however, that once the account reaches $100,000, the beneficiary’s monthly SSI will be temporarily suspended until such time that the account balance falls back below the $100,000 cap.  This $100,000 cap only applies to SSI and will not affect any other federally-funded public benefits.  States are still working on developing their ABLE Act programs. Funds placed in ABLE accounts may be used for any expenses or expenditures that are sufficiently related to the beneficiary’s disability, termed “qualified disability expenses.” Qualified disability expenses can include, among other things: health care expenses, housing, long-term support services (LTSS) such as personal care and behavioral health services, and employment supports such as job coaches and transportation to and from work. 

The ABLE to Work Act would allow people with disabilities who are employed to annually allocate extra money, up to the federal poverty level of $11,770, providing an additional benefit to working people with disabilities that plan to use an ABLE account. The bill does not remove the Substantial Gainful Activity  (SGA) limits with regards to income that ABLE beneficiaries need to adhere to in order to remain eligible for SSI or SSDI. 

The ABLE Age Adjustment Act would expand eligibility for ABLE accounts to people with disabilities who became disabled before the age of 46, rather than the current onset age limit of 26. 

The ABLE Financial Planning Act would  allow beneficiaries of college savings accounts (commonly referred to as 529 accounts) to shift funds from these accounts to ABLE accounts. U.S. Representative Pete Sessions, a sponsor of the bills, states that the ABLE accounts were an excellent first step and that the package will both strengthen the law and ensure a greater number of opportunities for people with disabilities. 

For further information, read Representative Pete Sessions’ press release on the bills