ABLE to Work Act
This legislation would allow an ABLE beneficiary who earns income for a job to save up to the Federal Poverty Level, which is currently at $11,770, in addition to their annual contribution limit of $14,000. This is targeted to assist only those disabled individuals who cannot contribute to an employer retirement saving plan.
ABLE Financial Planning Act
This legislation allows for rollovers from a 529 to a 529A account, but still maintains the annual contribution limit of $14,000. This would allow individuals who may have been saving for their child’s college tuition, which is now no longer needed, to rollover up to the maximum contribution each year until the 529 account has been depleted.
ABLE Age Adjustment Act
This legislation raises the age limit for eligibility to open an ABLE account from age 25 to 45. Increasing the age limit allows access to ABLE accounts for individuals who may face debilitating diseases, accidents or mental illnesses later in life, including multiple sclerosis, Lou Gehrig’s disease, and paralysis or other ailments due to an accident.
People with disabilities are living longer, healthier and productive lives, working and contributing to society. Yet these individuals are forced to live in poverty when they have the potential to achieve so much because they are subject to a $2,000 asset limitation and an extremely low monthly income limitation in order to preserve eligibility for benefits such as Medicaid and SSI. This asset limitation also means that the working disabled are not able to save in retirement and other tax-favored accounts without losing critical benefits.
In December 2014, Congress took the first step to address this problem with the landmark passage of the ABLE Act. The ABLE Act created Section 529A tax-exempt savings accounts for disability-related expenses that do not count towards this asset cap and, therefore, do not affect eligibility for means-tested programs. These new ABLE accounts were modeled after the popular state-based 529 college savings plans.
With 458 cosponsors in the House and Senate, the ABLE Act was the most bipartisan piece of legislation in the 113th Congress. Harnessing the momentum of the bipartisan effort to enact the ABLE Act in 2014, to date, almost all 50 states have enacted their own versions of ABLE and many are in the process of establishing their state ABLE programs.
While the ABLE Act is a significant step forward and has been heralded as one of the most important pieces of disability legislation since the Americans with Disabilities Act (ADA) more than a quarter century ago, there are still improvements that we can make to the law to ensure individuals with disabilities lead fulfilling, independent lives.