(Source: The Arc)
President Obama signed the ABLE (Achieving a Better Life Experience) Act into law on Friday, Dec. 19. This was a part of a larger bill of end of year tax provisions approved by Congress in the closing days of the session. The Arc previously reported on Dec. 3 the House of Representatives passed the ABLE Act under Division B of H.R. 5771, commonly referred to as the “tax extenders” package. On Tuesday Dec. 16 the Senate passed the bill by a vote of 76 to 16 (with eight Senators not voting).
The ABLE Act will change the tax code to allow for tax advantaged savings accounts for qualified individuals with disabilities to save for certain expenses, such as education and transportation. Similar to existing “Section 529” education savings accounts, ABLE accounts will allow individuals and families to save for disability-related expenses to supplement, but not replace, benefits provided through Medicaid, Supplemental Security Income, the beneficiary’s employment, and other sources. If properly managed, funds in an ABLE account will not jeopardize eligibility for critical federal benefits. With a full understanding of account features, individuals and families can use ABLE accounts as another tool in planning for the lifetime needs of an individual with long term disabilities.
This bill includes age limitations and a cap on contributions, added in July by the House Committee on Ways and Means to reduce the costs of the bill. The Arc will issue a fact sheet reflecting the details of the bill as it has changed through the legislative process.
Following is The Arc’s official statement regarding the ABLE Act:
“We are pleased that the Achieving a Better Life Experience Act has been approved by both the U.S. House of Representatives and now the U.S. Senate. With the clock winding down on this session of Congress, now this important legislation can move to President Obama’s desk. We appreciate the untiring work of the chief sponsors of the bill and the support of a large and broad representation in both chambers of Congress.
“While the legislation was narrowed due to the constraints from the cost analysis, the approved bill will provide a vehicle for some families and people with intellectual and developmental disabilities to save for the future, depending on their own circumstances. Our efforts will not be finished if President Obama signs this bill – The Arc will continue to work with the leadership and chief sponsors in Congress to expand this program in the future to ensure that everyone in need can get the maximum benefit from this legislation. We remain disappointed that certain pay-fors remain in the bill,” said Peter V. Berns, CEO of The Arc.
The ABLE Act aims to change the tax code to allow for tax advantaged savings accounts for individuals with disabilities for certain expenses, like education, housing, and transportation. Similar to existing “Section 529” education savings accounts, ABLE accounts would let families save for disability-related expenses on behalf of qualified beneficiaries with disabilities that will supplement, but not replace, benefits provided through the Medicaid program, the Supplemental Security Income program, the beneficiary’s employment, and other sources. If properly managed, funds in the ABLE accounts would not jeopardize eligibility for critical federal benefits. With full understanding of its features, individuals and families could use the ABLE accounts as another tool in planning for the lifetime needs of an individual with long term disabilities. The version of the bill that passed the U.S. House of Representatives includes age limitations and a cap on contributions, added in July by the Committee on Ways and Means to reduce the costs of the bill. If the President signs the ABLE Act into law, The Arc will issue a fact sheet including the details on the bill as it has been revised through the legislative process. Further details would come through the regulatory process.