Families currently can save for their children's education through tax-advantaged 529 education savings accounts. Our Achieving a Better Life Experience (ABLE) Act would expand the use of 529 accounts to help cover disability related expenses, enabling parents of children with disabilities as well as older individuals with disabilities to put aside money to help cover anticipated long-term costs.
Here's how it works. The ABLE Act creates a new type of 529 savings plan that would allow individuals with disabilities and their families to save money to be used for education, medical and dental care, job training, housing, transportation and other expenses. Contributions to the account would grow tax-free and withdrawals for disability expenses would also be tax-free.
Our starting point is simple: Individuals with disabilities and their parents who care for them should have access to the same kinds of savings tools as the broader population.
The money saved in the ABLE account would supplement rather than replace benefits from core government programs, such as Medicaid. These additional funds would support individuals as they encounter a range of expenses related to their disability -- expenses such as tutoring, home and vehicle modification, and job training.The Senate version of the ABLE Act is S. 1872.
The House verison (sponsor: Ander Crenshaw (R-FL)) is HR 3423.