By Justin King
“For many Americans living with disabilities, it has been a good week: now that the Senate passed the Achieving a Better Life Experience (ABLE) Act this week (following the House’s passage in early December) it is now on its way to the President to be signed into law. The ABLE Act creates tax-advantaged savings accounts for use by individuals with disabilities. Critically, savings in ABLE accounts won’t disqualify those individuals from receiving public assistance. While the bill is a win for many individuals with disabilities and their families, there are millions of others who are left out and need additional measures to pursue the same goals — financial security and upward economic mobility.
“What does the ABLE Act do for Disabled Americans?
“The ABLE Act (H.R. 647/S. 313) creates savings accounts for use by individuals with disabilities where deposits are able to grow tax-free. ABLE builds off of an existing part of the tax code that allows states to offer similar accounts, dedicated to post-secondary education, called 529 College Savings Accounts. When ABLE Accounts are created (starting in 2015) qualifying individuals and their families will be able to open an ABLE Account and deposit up to $14,000 annually. As in the 529 model, those funds can be invested with more or less risk and growth potential, according to the vendor, state, and choice of the account holder. ABLE Accounts are effectively limited to $100,000, as larger amounts would cause the account holder to lose eligibility for public assistance.”