A seven-year battle to pass the Achieving a Better Life Experience (ABLE) Act may culminate this month in a victory for asset-building, health care, and disability rights advocates—especially if Congress hears our voices loud and clear. The bill would allow individuals with disabilities to save up to $100,000 in a tax-sheltered savings account without the fear of losing federally funded public benefits. Currently the asset limit for recipients of Supplemental Security Income (SSI) and Medicaid is a very low $2,000 per individual. This means that most individuals with disabilities can have no more than $2,000 in accumulated income, such as in a retirement or savings account.
Asset limits force people to “spend down” what little financial resources they may have, making it impossible for them to cope with financial emergencies or to achieve a foothold toward financial independence. For people with disabilities who cannot work, or who can work with supports that may be lost at any time, saving money for the future is vitally important. Currently, setting up a trust fund—a complicated and expensive option that does not allow the beneficiary to save on his or her own behalf—is the only way an individual with disabilities can avoid the asset limit. With ABLE 529 accounts, someone like Sara Wolff, an activist with Down syndrome fighting to pass the ABLE Act, will be able to keep her benefits, save on her own behalf, and keep working. Sara works in a law office and receives SSI benefits, but currently cannot accumulate more than $2,000 in assets without becoming ineligible for that aid.
The ABLE Act would amend Section 529 of the Internal Revenue Service Code to establish tax-exempt ABLE accounts to assist individuals with disabilities and their families in building savings to pay for qualified disability expenses, including expenses related to education, primary residence, transportation, obtaining/maintaining employment (job training), health and wellness, and other personal support expenses. Currently in Illinois, only people with disabilities who are working and enrolled in the Health Benefits for People with Disabilities Program (HBWD) are allowed to have up to $25,000 in assets and continue to receive Medicaid health coverage. Advocates sought a generous asset limit in the HBWD (which is Illinois’s Medicaid buy-in program authorized under the federal Ticket to Work–Work Incentives Improvement Act) to encourage employment and asset building among people with disabilities. Passage of the ABLE Act would take asset-building for people with disabilities to a new level by allowing people with disabilities, working or not, to accumulate even more assets, as well as maintain all federally funded public benefits, not just Medicaid coverage.
Passage of the ABLE ACT would also be a boon to policies that support state and federally facilitated savings programs. One in five Americans has zero or negative net worth, and nearly half of households are without a basic personal safety net to prepare for emergencies or future needs. It is vitally important that we continue to support policies that create savings opportunities for low- and moderate-income families, such as children’s savings accounts (implemented through Bright Start in Illinois), ABLE accounts for persons with disabilities (pending in Congress), as well as Illinois’s automatic-IRA program, The Secure Choice Savings Program (pending in the Illinois General Assembly).
In August, Republicans and Democrats on the House Ways and Means Committee unanimously voted in favor of the ABLE Act. The bill has strong support in both chambers of Congress (379 co-sponsors in the House and 74 in the Senate). This showing of bipartisan support exemplifies the growing understanding that asset limits exacerbate poverty and perpetuate financial instability. According to CFED, Congress returns to Washington in early September and may take up this bill soon after. Contact your representative and senators and tell them to support the ABLE Act!
- Call 202.224.3121 and ask to be connected to your senators’ and representative’s offices. If you don’t know who your representative or senators are, find out here: House, Senate.
- Once you’re connected, here’s what to say:
My name is [your name] from [your organization or coalition]. I’m calling to ask you to support H.R. 647 / S. 313, the ABLE Act of 2013, so that people with disabilities are able to save, expand their economic opportunity and have the chance to gain economic self-sufficiency.
Stephanie Altman contributed to this blog post.