The Senate Finance Committee today advanced the ABLE to Work Act and the ABLE Financial Planning Act – two bills sponsored by Senator Richard Burr (R-NC) and Senator Bob Casey (D-PA) aimed at enhancing ABLE accounts. The ABLE to Work Act builds on the success of the ABLE Act by making it possible for people with disabilities who work to save an additional amount in an ABLE account without risking loss of benefits. The ABLE Financial Planning Act will allow financial rollovers from 529 college savings plans to ABLE accounts.
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.
Text of the ABLE to Work Act is available here.
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 could incur a disability from a tragic accident. 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 child.
Text of the ABLE Financial Planning Act is available here.
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).
Read Senator Burr’s op-ed on the ABLE Act here.