You can do it for your retirement, you can do it for your child’s education, but you can’t put money away tax free to help make sure your child with a disability will have the money he or she needs after you are gone. A bill up for a vote Wednesday in the U.S. Senate would make that a reality.
“Families across the country have waited a long time to have this opportunity,” said U.S. Sen. Bob Casey (D-Pennsylvania) following the House passage of the Achieving a Better Life Experience (ABLE) Act, which would make it possible for states to allow 529-like plans for children with disabilities.
The bill is expected to win easy approval when it comes up for a vote in the Senate next week.
“Across the board the disability community in the United States was so effect and so determined to get not just a legislative win but to do it in the most bipartisan manner possible,” Casey said.
Despite those efforts, Casey and Sen. Richard Burr (R-North Carolina) have been working on the bill for the last eight years.
“Maybe we made it too simple and too easy to understand and people thought there was an ulterior motive,” Burr said. “Bob (Casey) and I have gone to great length to make sure that there were conditions on ABLE Act that doesn’t allow it to grow into something that it was never intended to.”
Specifically the measure extends the federal tax code used for college savings accounts know as 529 accounts to include permanently disabled individuals to eventually be used to cover housing, transportation and other expenses.
The measure also changes Supplemental Security Income (SSI) rules to allow adults with disabilities to have as much as $100,000 in the 529 account before they would begin to lose SSI payments. The current asset test sets the threshold at $2,000.
Assuming the bill passes the Senate and is signed by the president, it would still be up to the states to create the mechanism to open the accounts. Burr does not think that will be a problem.
“They’re simple, they’re easy to set up and they are popular,” Burr said. “Every state at some point next calendar year will have a 529” for those with disabilities.
Casey said he will begin lobbying Governor-elect Tom Wolf and the members of the state Legislature as soon as the ABLE Act is finalized.
