Senate Passes ABLE Act

As previously reported, on December 3rd the House of Representatives passed the Achieving a Better Life Experience (ABLE) Act under Division B of H.R. 5771, commonly referred to as the “tax extenders” package.  On Tuesday December 16th the Senate passed the bill by a vote of 76 to 16 (with 8 Senators not voting).  The bill is expected to be signed into law by the President within ten days.

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. Further details will come through the regulatory process as implementation occurs. Read The Arc’s statement on Senate passage of the ABLE Act.

2 thoughts on “Senate Passes ABLE Act

  1. OK, I am no lawyer. I read these things and try to use common English to try to interpret what the law says then pay obscene amounts to some lawyer who claims he can. From what I can see:

    1. Enacted by the states. So, if YOUR state does it slowly and people with special needs do not, they wind up off SSI as soon as they break the minimum, currently $2000.
    2. If your state even enacts it and doesn’t mismanage said funds like my state did with the 529 funds. Which they originally had as “no coupon” bonds, which are probably worthless because they mismanaged the cash given to them.
    3. Love that “if properly used” sentence…because the first time it’s determined you did not, it appears you’ll lose SSI, great for all those rich enough to put aside the eventual ceiling for their child (and written by someone financially set to do that) but a new headache for the rest of us to have to balance receiving government support for a kid who can’t survive in a work world and everything else.

    Why can’t someone come up with something like this that will help everyone from the ditch digger to the millionaire the first time and get out of the way?

  2. Very happy this bill was passed. That said, I have a feeling that the “rules and regulations” of setting up and managing these special savings accounts are going to be complicated, maybe too complicated for caregivers and the disabled to understand. Why must everything have so many strings attached when it comes to the government? I’m sure I need to wait to pass judgement but I am going by passed experience in setting up a “special needs” trust fund and all the rules that applied to that in order for my brother to be able to keep his trust and not lose his benefits…having to keep track and prove all expenses ugh. I suspect this new law will be similar to that.

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