On December 3, the House of Representatives passed the Achieving a Better Life Experience (ABLE) Act (H.R. 647) as a free-standing bill by a vote of 404 to 17 (with 13 Members not voting). On the same day, the House also passed the ABLE Act as Division B of H.R. 5771, commonly referred to as the “tax extenders” package (Division A, the Tax Increase Prevention Act of 2014, provides for tax extenders). A vote in the Senate on H.R. 5771, inclusive of the ABLE Act, is expected this week.
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 individuals and families 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 the ABLE accounts would not jeopardize eligibility for critical federal benefits. With a 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 House 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 ABLE Act becomes law, The Arc will issue a fact sheet reflecting the details of the bill as it has changed through the legislative process. Further details must come through the regulatory process.