A March 17 release from Rep. Ander Crenshaw (R-Florida);
WASHINGTON – Today, Senators Richard Burr (R-NC) and Bob Casey (D-PA) and Representatives Ander Crenshaw (R-FL), Chris Van Hollen (D-MD), Cathy McMorris Rodgers (R-WA), and Pete Sessions (R-TX) introduced a package of bills aimed at enhancing the ABLE Act. The ABLE to Work Act builds on the success of the ABLE Act by making it possible for disabled people who work to save a portion of their income in an ABLE account without risking loss of benefits. These bills will also allow rollovers to and from 529 college savings plans as well as raise the age for eligibility from 26 to 46.
In 2014, the bipartisan group of lawmakers led the effort to pass the Achieving a Better Life Experience (ABLE) Act, which lets families who have a child with a disability save for their long-term care through 529-style savings accounts. The ABLE Act was a significant step forward and has been heralded as one of the most important pieces of disability legislation since the Americans with Disabilities Act (ADA).
Since the passage of the ABLE Act in 2014, 34 states have enacted ABLE programs and legislation is pending in several more states.
The ABLE to Work Act expands on the goals of the ABLE Act by encouraging work and self-sufficiency. The legislation allows 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 will also allow ABLE beneficiaries to qualify for the existing Saver's Credit when they put savings in.
The ABLE Financial Planning Act would allow families to rollover savings in a 529 college savings plan into an ABLE account. Many families save for a child’s college education by opening a 529 account, sometimes before their child is even born, only to learn later that their child has a severe disability like autism. In other cases, a child is in a tragic accident and becomes severely disabled. In such instances, these families have funds trapped in a 529 that they could use to help cover their child’s lifelong expenses. If they withdraw the funds for anything other than college expenses, they face taxes on their withdrawals. The ABLE Financial Planning Act would help these families by allowing them to rollover the funds in their 529 account into an ABLE account for their disabled child.
The ABLE Age Adjustment Act will raise the age limit for ABLE accounts to age 46. Currently, individuals with a severe disability prior to the age of 26 are eligible to open an ABLE account. Many debilitating diseases and conditions can strike later in life, including multiple sclerosis, Lou Gehrig’s disease, or paralysis due to an accident. Increasing the age limit for ABLE accounts will allow more individuals to save in these accounts to help cover the costs of short, medium and long-term care.