Senators Introduce Bipartisan Legislation to Expand ABLE Accounts
WASHINGTON -- Today, Senators Richard Burr (R-NC), Bob Casey (D-PA), and Chris Van Hollen (D-MD) 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 from 529 college savings plans as well as raise the age for eligibility from 26 to 46. Representatives Cathy McMorris Rogers (R-WA), Pete Sessions (R-TX), and Tony Cardenas (D-CA), introduced companion legislation in the House of Representatives.
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).
“Many individuals with disabilities are willing and able to work, but our current one-size-fits all system punishes those who do by making them ineligible for benefits,” said Senator Burr. “Having a job is an essential element of the American dream. The ABLE to Work Act gives disabled Americans and their families’ better options to plan for the future. Work is about more than financial support; it’s about participating in society and building a sense of purpose. It is wrong to exclude the most vulnerable members of our community from the benefits of having a job. I am also proud to join with my colleagues to introduce legislation to improve the ABLE Act by allowing rollovers from 529 college savings plans as well as allowing individuals who become disabled after turning 26 to open and save in an ABLE account.”
“These pieces of legislation will strengthen the ABLE law and increase its benefits,” Senator Casey said. “The ABLE Act was a bipartisan accomplishment on behalf of those with disabilities and we must continue to do more.”
"This legislation will build on the foundation of the ABLE Act to expand access and provide even greater flexibility for families who want to save money to support their disabled loved ones," said Senator Van Hollen. "I'm proud to work with advocates from the disabilities community to take the next step on this journey. These improvements to the ABLE Act will strengthen the ability of thousands of Maryland residents to live independent and meaningful lives."
Since the passage of the ABLE Act in 2014, 48 states and Washington, DC have passed ABLE programs. Families interested in ABLE act programs are eligible to enroll across state lines.
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 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.
Text of the ABLE Financial Planning Act is available here.
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.
Text of the ABLE Age Adjustment Act available here.
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