Great news – The ABLE program enhancements have been re-introduced in Congress and are gaining support. This package of bills include improvements to the original ABLE program that directly impact our community, here’s how:
On April 4th, a bi-partisan group of Members of Congress, including Senators Richard Burr (R-NC), Bob Casey (D-PA), Jerry Moran (R-KA), and Chris Van Hollen (D-MD) and Representatives Pete Sessions (R-Texas), Cathy McMorris Rodgers (R-Wash.), Tony Cardenas (D–Calif.) and Mike Doyle (D-Pa.), introduced a package of bills that will enhance benefits provided to communities such as ours through the Stephen Beck Jr., Achieving a Better Life Experience (ABLE) Act.
This package of bills includes three pieces of legislation:
- ABLE Age Adjustment Act (S. 817/HR 1874)
Raises the age limit for ABLE accounts to age 46. Currently, individuals with a severe disability that occurred prior to the age of 26 are eligible to open an ABLE account. Increasing the age limit for ABLE accounts will broaden eligibility.
- ABLE Financial Planning Act (S. 816/HR 1897)
Allows 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 been diagnosed with Duchenne or Becker. In such instances, families have funds trapped in a 529 that they could use to help cover their child’s lifelong disability-related expenses. But if they withdraw the funds for anything other than college expenses, they face taxes and penalties on their withdrawals. The ABLE Financial Planning Act would help families by allowing them to transfer funds from their 529 account without penalty into an ABLE account for their child with a qualified disability. It is important to note that the rollover from a 529 to a 529 ABLE account would still be subject to the annual contribution limit (currently $14,000).
- ABLE to Work Act (S. 818/HR 1896)
Allows individuals and their families to save more money in an ABLE account if the beneficiary works and earns income. Specifically, in addition to the $14,000 annual contribution cap, an ABLE beneficiary who earns income from a job could contribute from his/her compensation up to the Federal Poverty Level, which is currently at $11,770 (potentially increasing allowable annual contributions to $25,770). These additional funds into the ABLE account would only be allowed if the beneficiary was not participating in his/her employer’s retirement plan (ex: 401k). The bill will also allow ABLE beneficiaries to qualify for the existing Saver's Credit when they contribute savings to their ABLE account. It is important to note that beneficiaries would still be subject to the caps related to earned income and substantial gainful employment (SGA). This bill would not allow individuals with disabilities the ability to disregard earned income (even if it is contributed to their ABLE account) for purposes of eligibility for SSI and Medicaid.