Sunday, December 21, 2014

ABLE Act: An Early Christmas Gift

This week Alex and many other Americans like him who have developmental disabilities received a wonderful early Christmas present. The passing of a new law known as the ABLE (Achieve a Better Life Experience) Act of 2014 will allow parents to save money for their children who have disabilities without fear of losing benefits. The purpose of this act is to help and encourage families to save funds for their loved ones with disabilities to help provide for their needs. These funds would supplement any government disability funding without fear of losing these important resources. Up until this time, parents have been discouraged from establishing savings accounts for their children with disabilities because these children cannot have their own assets totaling more than $1000 or $2000, depending upon government agency regulations, without fear of losing disability benefits, such as Medicaid or Social Security’s Supplemental Security Income (SSI).

First introduced in 2008, ABLE was promoted by parents of children with special needs as a program similar to those for parents wanting to save money for their children’s college funds. The bill in its current form was introduced last year on February 13, 2013, and was sponsored by Representative Ander Crenshaw, a Republican from Florida. The bill overwhelmingly passed in the U.S. House of Representatives on December 3, 2014, with a vote of 404-17. As a bipartisan effort, Senator Bob Casey, a Democrat from Pennsylvania, and Senator Richard Burr, a Republican from North Carolina, sponsored the bill in the U.S. Senate. This week, on December 16, 2014, Alex’s twenty-third birthday, the Senate also overwhelmingly passed the ABLE Act with a vote of 76-16. On Friday, December 19, 2014, President Obama signed the ABLE Act into law. Not since the enactment of the American with Disabilities Act (ADA) of 1990 has there been such significant legislation enacted to benefit people with disabilities until the signing of the ABLE Act this week.

Essentially, ABLE amends the Internal Revenue Tax Code to allow the use of tax-free deferred savings accounts for individuals with disabilities. Families may use these funds—up to $100,000—to cover expenses for education, housing, transportation, and medical expenses. Under the law, the disability must have been diagnosed before the age of 26, and the child must receive Supplemental Security Income through Social Security. Previously, parents were discouraged from putting aside financial resources for their children with disabilities, fearing that their children would lose important disability benefits. In addition, parents had to make sure their children had limited resources of their own. To ensure that their children would not lose benefits by inheriting assets, parents had to make certain that their estates would not go directly to the children with disabilities but to special needs trust accounts instead.

Because we only recently became aware of the problems of Alex having his own financial resources eventually, we have always set aside money in savings with the idea that he would need money in the future. Knowing that Alex can have limited finances in his own name, we have made certain that his savings account never has more than the maximum the state will allow him to have without losing his benefits that pay for his therapies and any supports he may need in the future. However, Ed and I have also saved money for Alex’s future needs that the ABLE Act will allow us to provide for him securely. As parents, we have a responsibility to take care of our children the best we can, and the ABLE Act permits us to provide for our children with disabilities without penalizing them or us for doing what is right, saving money that can be used to meet their needs. Along with our many blessings we have enjoyed this past year, we are thankful that the American politicians saw the needs of families raising children with disabilities and passed the ABLE Act into law, which will benefit so many families now and in the future.

“And this same God who takes care of me will supply all your needs from His glorious riches, which have been given to us in Christ Jesus.” Philippians 4:19

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