On June 30 and July 1, Nebraska and Florida, respectively, opened Qualified ABLE Programs. Nebraska’s program (Enable Savings Plan) is open to qualified individuals nation-wide, while Florida’s (ABLE United) is currently only open to state residents. Nebraska’s program charges a $45 annual account fee as well as asset-based fees ranging from 0.5 to 0.56%. Florida’s program charges a $2.50 monthly fee and asset-based ranging from 0.035 to 0.29%. More information about state implementation the ABLE Act can be found here.
On June 13, Tennessee became the second state to open a Qualified ABLE Program. Like Ohio’s STABLE program, this program is open to qualified individuals nation-wide. The account has 14 different investment options. Annual fees depend upon the investment option selected and range from 0% to 0.63% of the value in the account. More information about state implementation the ABLE Act can be found here.
On Wednesday, June 1, Ohio became the first state to open Qualified ABLE Program. The program, referred to as STABLE, is open to qualified individuals nation-wide. An account requires an initial $50 deposit and costs $2.50 per month for Ohio residents and non-residents are charged $5.00 per month. Additionally, beneficiaries will be charged small asset-based fees depending on their investment choices.
Last week, nine states (Alaska, Illinois, Iowa, Kansas, Minnesota, Missouri, Nevada, Pennsylvania, and Rhode Island) formed the country’s first Achieving a Better Life Act (ABLE) consortium. This partnership will allow participating states to garner a greater share of the market, thus allowing lower account fees and more effective investment options. Individual states will still have control over their own plans, but they will have common elements such as investment options. See the press release for more information.
Last week, Senators Chris Coons (D-DE), Angus King (I-ME), and Rob Portman (R-OH) introduced S. 2800, the Stop Taxing Death and Disability Act. The bill would end federal taxation of discharged federal student loans under the “Total and Permanent Disability” standard or in the event of the death of a borrower. Under current law, forgiven federal student loan debt is considered income for tax purposes. As a result, borrowers who have their federal student loan debt forgiven due to a qualifying disability, and families of borrowers who die, can be charged tens of thousands of dollars in taxes. The Arc supports S. 2800, which will end this unnecessary and harmful tax provision. To learn more, read remarks on the Senate floor by Senator King, as well as press statements by Senator Coons and Senator Portman. The bill was referred to the Committee on Finance. The full text of S. 2800 should be available on Congress.gov shortly.
On March 17, the six lead sponsors of the original ABLE Act introduced three bills in both the Senate and the House of Representatives to increase the age of onset for eligibility for the ABLE Act and to make other improvements to the ABLE program. They are: Senators Bob Casey (D-PA), Richard Burr (R-NC), Representatives Ander Crenshaw (R-FL), Chris Van Hollen (D-MD), Cathy McMorris Rodgers (R-WA), and Pete Sessions (R-TX). Each has sponsored or co-sponsored all three bills in their respective chambers.
The ABLE Age Adjustment Act (S. 2704, H.R. 4813) would raise the age limit for eligibility for ABLE accounts to individuals disabled before age 46. Currently, only individuals with a severe disability prior to the age of 26 are eligible to open an ABLE account. Many disabling conditions can occur later in life. Increasing the age limit for ABLE accounts will allow more individuals to save for disability related expenses in ABLE accounts. Sponsors: Senator Casey and Rep. Van Hollen.
The ABLE Financial Planning Act (S. 2703, H.R. 4794) would allow families to rollover savings from a Section 529 college savings plan to an ABLE account. Many families save for a child’s college education by opening a 529 account, sometimes before their child is born. They face taxes on their withdrawals for anything other than college expenses. The ABLE Financial Planning Act would allow them to rollover the funds from their 529 account into an ABLE account for their child. Sponsors: Senator Casey and Rep. Crenshaw.
The ABLE to Work Act (S. 2702, H.R. 4795) would allow individuals and their families to save more money in an ABLE account if the beneficiary works and earns income. Specifically, an ABLE beneficiary who earns income from a job could save up to the Federal Poverty Level, which is currently at $11,770. The bill would also allow ABLE beneficiaries to qualify for the existing Saver’s Credit when they put savings in the account. Sponsors: Senator Burr and Rep. Crenshaw.
The Arc will work with Members and their staffs to secure passage of ABLE improvement legislation, particularly with a goal toward a significant increase in the age of eligibility for ABLE accounts.
In 2015, the majority of states enacted their own versions of the federal Achieving a Better Life Experience (ABLE) Act. With this stage complete, many states are closer to actually implementing the new ABLE accounts program in their states, with some expecting to have accounts available to open in 2016. To provide updated information, the ABLE National Resource Center (ANRC) invites you to join a webinar on Friday, February 5, at 2:00 pm EST. Featuring a panel of ABLE experts, this webinar will explore the current status of ABLE, various components of the implementation process, and what can be expected in the coming months. Speakers will include:
- Chris Rodriguez, Senior Public Policy Advisor, National Disability Institute
- Heather Sachs, Vice President of Advocacy & Public Policy, National Down Syndrome Society
- Ken Brown, Social Security Administration
- Marty Ford, Senior Executive Officer, Public Policy, The Arc
- Stuart Spielman, Senior Policy Advisor and Counsel, Autism Speaks
- William Thompson, Deputy Executive Director, Florida Prepaid College Board
Should you wish to attend this online event, please register here.
The Social Security Administration (SSA) released internal instructions, effective on December 18, 2015, for implementation of the Achieving a Better Life Experience (ABLE) Act programs and accounts in relation to Supplemental Security Income and Social Security disability benefits. The instructions are included in SSA’s Program Operations Manual System (POMS). POMS instructions are written for SSA staff to guide them in making decisions about numerous aspects of eligibility and benefits payments. In these POMS instructions, SSA has joined the Internal Revenue Service (IRS) in taking an overall positive approach to implementation of the ABLE Act and to incorporating approaches intended to encourage beneficiary independence and self-direction.
In this POMS issuance, guidance is given on how to treat contributions to and distributions from ABLE accounts for purposes of the SSI program; qualified disability expenses for housing and how they will be treated; treatment of automatic contributions to an ABLE account from a beneficiary’s earnings; and the impact of exceeding the special SSI ABLE account and resource limits. For the most part, the POMS release is written in a straightforward manner and provides substantial information about how SSA will be treating funds in these accounts; however, the POMS are written for the use of SSA staff and contain numerous codes and undefined terms, as well as internal references to other POMS sections. SSA has indicated that it will produce a fact sheet for beneficiaries in the near future.
The Department of the Treasury and the Internal Revenue Service (IRS) issued Notice 2015-81, a guidance on how they intend to respond to public comments by revising three provisions of the proposed regulations under § 529A of the Internal Revenue Code when those regulations are finalized. Specifically, the guidance addresses concerns raised during the public comment period for the notice of proposed rulemaking for the Achieving a Better Life Experience (ABLE) Act. The Treasury Department and the IRS note that commenters maintained that the following three requirements for qualified programs in the proposed regulations would create significant barriers to the establishment of such programs: (1) the requirement to establish safeguards to categorize distributions from ABLE accounts, (2) the requirement to request the taxpayer identification number (TIN) of each contributor to an ABLE account, and (3) the requirements for disability certifications, and in particular the requirement to process disability certifications with signed physicians’ diagnoses. Notice 2015-81 indicates that the Treasury Department and the IRS intend to address these issues in the final regulations in the same manner as indicated as in the Notice and that, pending the issuance of final regulations, taxpayers may rely on the guidance contained in the Notice. Notice 2015-81 will appear in the Internal Revenue Bulletin (IRB) 2015-49, dated Dec. 7, 2015.
It appears that Notice 2015-81 positively addresses a number of issues raised by advocates in the disability community and by state ABLE administrators. These decisions are expected to make the program easier to administer and, therefore, less costly to individual ABLE account holders. Other issues in the proposed regulations still remain outstanding and advocates and state ABLE program administrators look forward to publication of final regulations.
The ABLE National Resource Center has developed a survey to better understand how many individuals might be eligible for ABLE accounts and how a potential beneficiary may use an ABLE account to save for disability related expenses. The results will be analyzed by the ABLE National Resource Center and distributed to its members and other relevant stakeholders. The Arc encourages advocates to distribute the survey widely through social media, email, and newsletters. It is hoped that all responses will be submitted by August 3rd, though distribution is still encouraged through the end of August. To participate in the survey, please click here. If you have any questions, please contact Chris Rodriguez at the National Disability Institute.