[tabi] Fw: BREAKING NEWS: Congress Passes ABLE Act!
- From: "Dorothy Martin" <spikey52@xxxxxxxxxxxxxxx>
- To: <tabi@xxxxxxxxxxxxx>
- Date: Wed, 17 Dec 2014 13:43:37 -0500
From: National Disability Institute
Sent: Wednesday, December 17, 2014 12:23 PM
To: spikey52@xxxxxxxxxxxxxxx
Subject: BREAKING NEWS: Congress Passes ABLE Act!
CONGRESS PASSES ABLE ACT: MAJOR VICTORY FOR
PERSONS WITH DISABILITIES AND THEIR FAMILIES
For first time in nation's history, federal
government recognizes added costs associated to living with a disability
(Washington, D.C. - Dec. 17, 2014) - Last night,
the U.S. Senate overwhelmingly passed the Achieving a Better Life Experience
(ABLE) Act of 2014 by a vote of 76 to 16. First introduced in 2006, and
subsequent sessions of Congress, the ABLE Act will allow people with
disabilities (with an age of onset up to 26 years old) and their families the
opportunity to create a tax-exempt savings account that can be used for
maintaining health, independence and quality of life.
"Today marks a new day in our country's
understanding and support of people with disabilities and their families,"
Michael Morris, National Disability Institute (NDI) Executive Director, said.
"A major victory for the disability community, ABLE, for the very first time in
our country's policy on disability, recognizes that there are added costs to
living with a disability." He continued. "For far too long, federally imposed
asset limits to remain eligible for critical public benefits have served as a
roadblock toward greater financial independence for the millions of individuals
living with a disability."
NDI has long championed the ABLE Act as a
critical strategy to providing a pathway to a better economic future for all
people with disabilities. As the nation's first nonprofit dedicated to
improving the financial health and future of all people with disabilities, the
organization has extensively documented and called attention to the daily
reality and extra expenses associated with living with a disability, and the
challenges of navigating the complex web of government rules to maintain public
benefits eligibility.
In recognition of this unprecedented legislation,
NDI has created a list of 10 items about ABLE accounts that individuals with
disabilities and their families should know:
ABLE Accounts: 10 Things You Must Know
1.. What is an ABLE account?
ABLE Accounts, which are tax-advantaged savings
accounts for individuals with disabilities and their families, will be created
as a result of the passage of the ABLE Act of 2014. Income earned by the
accounts would not be taxed. Contributions to the account made by any person
(the account beneficiary, family and friends) would not be tax deductible.
2.. Why the need for ABLE accounts?
Millions of individuals with disabilities and
their families depend on a wide variety of public benefits for income, health
care and food and housing assistance. Eligibility for these public benefits
(SSI, SNAP, Medicaid) require meeting a means or resource test that limits
eligibility to individuals to report more than $2,000 in cash savings,
retirement funds and other items of significant value. To remain eligible for
these public benefits, an individual must remain poor. For the first time in
public policy, the ABLE Act recognizes the extra and significant costs of
living with a disability. These include costs, related to raising a child with
significant disabilities or a working age adult with disabilities, for
accessible housing and transportation, personal assistance services, assistive
technology and health care not covered by insurance, Medicaid or Medicare.
For the first time, eligible individuals and
families will be allowed to establish ABLE savings accounts that will not
affect their eligibility for SSI, Medicaid and other public benefits. The
legislation explains further that an ABLE account will, with private savings,
"secure funding for disability-related expenses on behalf of designated
beneficiaries with disabilities that will supplement, but not supplant,
benefits provided through private insurance, Medicaid, SSI, the beneficiary's
employment and other sources."
3.. Am I eligible for an ABLE account?
Passage of legislation is a result of a series
of compromises. The final version of the ABLE Act limits eligibility to
individuals with significant disabilities with an age of onset of disability
before turning 26 years of age. If you meet this criteria and are also
receiving benefits already under SSI and/or SSDI, you are automatically
eligible to establish an ABLE account. If you are not a recipient of SSI and/or
SSDI, but still meet the age of onset disability requirement, you would still
be eligible to open an ABLE account if you meet SSI criteria regarding
significant functional limitations. The regulations to be written in 2015 by
the Treasury Department will have to explain further the standard of proof and
required medical documentation. You need not be under the age of 26 to be
eligible for an ABLE account. You could be over the age of 26, but must have
the documentation of disability that indicates age of onset before the age of
26.
4.. Are there limits to how much money can be
put in an ABLE account?
The total annual contributions by all
participating individuals, including family and friends, is $14,000. The amount
will be adjusted annually for inflation. Under current tax law, $14,000 is the
maximum amount that individuals can make as a gift to someone else and not pay
taxes (gift tax exclusion). The total limit over time that could be made to an
ABLE account will be subject to the individual state and their limit for
education-related 529 savings accounts. Many states have set this limit at more
than $300,000 per plan. However, for individuals with disabilities who are
recipients of SSI and Medicaid, the ABLE Act sets some further limitations. The
first $100,000 in ABLE accounts would be exempted from the SSI $2,000
individual resource limit. If and when an ABLE account exceeds $100,000, the
beneficiary would be suspended from eligibility for SSI benefits and no longer
receive that monthly income. However, the beneficiary would continue to be
eligible for Medicaid. States would be able to recoup some expenses through
Medicaid upon the death of the beneficiary.
5.. Which expenses are allowed by ABLE
accounts?
A "qualified disability expense" means any
expense related to the designated beneficiary as a result of living a life with
disabilities. These include education, housing, transportation, employment
training and support, assistive technology, personal support services, health
care expenses, financial management and administrative services and other
expenses which will be further described in regulations to be developed in 2015
by the Treasury Department.
6.. Where do I go to open an ABLE account?
Each state is responsible for establishing and
operating an ABLE program. If a state should choose not to establish its own
program, the state may choose to contract with another state to still offer its
eligible individuals with significant disabilities the opportunity to open an
ABLE account.
After President Obama signs the ABLE Act, the
Secretary of the Department of Treasury will begin to develop regulations that
will guide the states in terms of a) the information required to be presented
to open an ABLE account; b) the documentation needed to meet the requirements
of ABLE account eligibility for a person with a disability; and c) the
definition details of "qualified disability expenses" and the documentation
that will be needed for tax reporting.
No accounts can be established until the
regulations are finalized following a public comment period on proposed rules
for program implementation. States will begin to accept applications to
establish ABLE accounts before the end of 2015.
7.. Can I have more than one ABLE account?
No. The ABLE Act limits the opportunity to one
ABLE account per eligible individual.
8.. Will states offer options to invest the
savings contributed to an ABLE account?
Like state 529 college savings plans, states
are likely to offer qualified individuals and families multiple options to
establish ABLE accounts with varied investment strategies. Each individual and
family will need to project possible future needs and costs over time, and to
assess their risk tolerance for possible future investment strategies to grow
their savings. Account contributors or designated beneficiaries are limited, by
the ABLE Act, to change the way their money is invested in the account up to
two times per year.
9.. How many eligible individuals and families
might benefit from establishing an ABLE account?
There are 58 million individuals with
disabilities in the United States. To meet the definition of significant
disability required by the legislation to be eligible to establish an ABLE
account, the conservative number would be approximately 10 percent of the
larger group, or 5.8 million individuals and families. Further analysis is
needed to understand more fully the size of this market and more about their
needs for new savings and investment products.
10.. How is an ABLE account different than a
special needs or pooled trust?
An ABLE Account will provide more choice and
control for the beneficiary and family. Cost of establishing an account will be
considerably less than either a Special Needs Trust (SNT) or Pooled Income
Trust. With an ABLE account, account owners will have the ability to control
their funds and, if circumstances change, still have other options available to
them. Determining which option is the most appropriate will depend upon
individual circumstances. For many families, the ABLE account will be a
significant and viable option in addition to, rather than instead of, a Trust
program.
About National Disability Institute
National Disability Institute (NDI) is a national
nonprofit organization dedicated to building a better economic future for
people with disabilities. The first national organization committed exclusively
to championing economic empowerment, financial education, asset development and
financial stability for all persons with disabilities, NDI affects change
through public education, policy development, training, technical assistance
and innovative initiatives. NDI and its Real Economic Impact (REI) Network have
helped more than 2.3 million people with disabilities receive nearly $2.3
billion in tax refunds and credits. To learn more, visit
www.realeconomicimpact.org. Engage with NDI on Facebook: RealEconImpact or
follow NDI on Twitter: @RealEconImpact.
# # #
Contact:
Dominic Manecke
National Disability Institute
(202) 296-2040 / dmanecke@xxxxxxxxxxx
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