It’s being called the biggest piece of legislation to affect disabled Americans since the Americans with Disabilities Act of 1990.
The Achieving a Better Life Experience (ABLE) Act was passed by the Senate Tuesday by a vote of 404-17. It allows Americans with disabilities or their families to set up a tax-free savings account in order to prepare for long-term care.
“For example, if you have a child with Down syndrome or a child on the autism spectrum who then as an adult is employed and living in an apartment and maybe taking public transportation to work or whatever – all of those kinds of expenses can be paid for out of this tax advantaged account,” said U.S. Sen. Bob Casey (D-PA), the bill's sponsor.
Under current law, individuals with disabilities could save up to $2,000 – but if surpassed, they could lose their medical assistance and monetary monthly benefit, but the ABLE Act extends that cap to $100,000.
They can use that money to cover qualified expenses such as education, housing, medical needs and transportation, according to Casey.
“It’s the same concept as the tax incentives that have been in the tax vote for a long time … that encourages families to save for higher education,” Casey said. “And the same incentives we’ve used to encourage folks to save for retirement.”
The act covers individuals who have been diagnosed with a disability before the age of 26 and are receiving or are deemed eligible for disability benefits under the Social Security Act.
“We wanted to focus this legislation on principally children because that’s obviously a group of Americans whose accounts can grow because while they’re children … family members and others can be making contributions,” Casey said.
The legislation has an estimated cost of $2 billion over 10 years.
Casey said each state must pass additional legislation to set up ABLE, but he believes having more than 400 votes in Senate will help create momentum for the states to do that.
“We believe people with disabilities are very able and have ‘ability’ that we want to recognize and affirm,” Casey said.
