Happy Second Birthday ABLE

by Michael Morris Executive Director of National Disability Institute, working to improve the financial health of people with disabilities.

December 19 will mark two years since President Obama signed the Achieving a Better Life Experience (ABLE) Act into law. Last year, ABLE took its first steps when Treasury published proposed rules to guide state implementation. This year, Ohio jumped forward first, followed by Tennessee, Nebraska, Florida and Michigan. Before the end of this year, Virginia, Oregon, Kentucky, perhaps Illinois and a consortium of 11 states from coast to coast will open ABLE programs. For millions of eligible individuals with disabilities, there are new decisions to be made about which ABLE program may best meet their needs and which investment to choose to grow the funds contributed to their account.

The disability community has been waiting for this. ABLE is a low-cost, tax-advantaged savings account that does not adversely impact eligibility for other needed federal benefits like Supplemental Security Income (SSI), Medicaid, SNAP and housing assistance. The ABLE Act is a unique example of reaching across conservative and liberal ideologies to create public policy that encourages savings, setting financial goals and contributing to an ABLE account as a down payment on freedom, better health and wellness, improved productivity and enhanced quality of life experience.

Government can’t provide all the answers for people with disabilities and parents raising children with disabilities who are challenged daily with the extra costs of living a life with a disability. Nor can the financial challenges be fully responded to by charity, faith-based and nonprofit groups trying to respond to the diversity of needs of people across the spectrum of disabilities. This is the compelling reason why the changes to the tax code to create ABLE accounts makes so much sense.

ABLE accounts complement, but do not supplant, critically needed federal benefits. Contributions to ABLE accounts can be from earned income of the account beneficiary with a disability, as well as funds provided by family, friends and even an employer. Several thousand individuals with disabilities and families have already opened ABLE accounts this year. Families are contributing funds to be invested long-term for future employment, housing and transportation needs not covered completely or at all by government programs. Adults with disabilities are opening ABLE accounts to respond to more short-term needs such as covering the cost of transportation to and from work and the purchase of technology not covered by government assistance. Millions more individuals with disabilities are eligible, but need to be reassured that this is not a scam or “too good to be true” solution.

Each year, thousands more individuals with disabilities and their families will want to celebrate dreams proposed and realized, independence and productivity achieved and the power of self-determined, self-directed lives enhanced. Parents will share stories of their wisdom in saving early for a brighter future for their child. Working-age adults will share stories about escaping poverty, the growth of new dignity and self-respect and their appreciation of being able to manage their account to meet predictable and unforeseen emergency needs.

Like all legislative proposals, the ABLE Act passed as a result of a series of compromises. Three pending amendments to ABLE deserve the serious, urgent attention of Congress. There is a $14,000-dollar annual limit on contributions to an ABLE account. The first pending amendment would increase the annual limit to $25,770 dollars, if the additional contribution was from the earned income of the beneficiary. This amendment would encourage work and income production by individuals with disabilities.

The second pending amendment to the ABLE Act would allow movement of funds from a 529 college savings plan to an ABLE account. This amendment would help parents who did not know their child has a significant disability at the time they opened the 529 account and would provide the flexibility to transfer funds to an ABLE account with more varied and needed financial goals to be met.

The third pending amendment to the ABLE Act would expand the pool of eligible individuals by raising the age of onset of disability from age 26 and younger to age 46 and younger. This matches language in early versions of the ABLE legislation and would bring the power of ABLE accounts to more potential beneficiaries, including additional wounded warriors.

There could be no better present for ABLE’s second birthday than the bipartisan commitment to bring these bills forward, one at a time or as a package.

In Washington, D.C., I invite President Obama, President-elect Trump, House Speaker Ryan, Senate Minority Leader Schumer and the original ABLE sponsors: Senators Casey and Burr and Representatives Crenshaw, McMorris Rodgers and Van Hollen, to join me on the steps of the U.S. Capitol. I will bring the cake and candles. I ask them to bring a commitment to help realize the American dream for all, including individuals with disabilities, and to spend one hour commemorating ABLE’s birthday by speaking with a parent raising a child with a disability or a working-age adult with a disability who opened an ABLE account. Let them share their dreams and the possibilities to be realized by complementing essential public benefits with the growing contributions in their ABLE savings plan.

This is not about the power of special interests. This is about the commitment to a better quality of life that you can support and expand. Let’s all help realize dreams of freedom, independence and full community inclusion and participation. That is what makes America great: opening up financial opportunity for its most vulnerable and economically challenged members.

Since its inception in 2005, National Disability Institute (NDI) remains the first and only national nonprofit organization dedicated exclusively to designing pathways to economic stability and mobility for persons with disabilities. Through public policy research and development and customized training and technical assistance, NDI has become a recognized leader nationwide demonstrating that individuals across the spectrum of disabilities can work, save for the future and advance their financial capability and economic stability. To learn more, visit www.realeconomicimpact.org.