In a move that U.S. Rep. Rodney Davis (R-Ill.) said will provide “peace of mind,” the House overwhelmingly approved the ABLE Act 2014 on Wednesday, allowing families of Americans with severe disabilities to save money for their care.
An acronym for Achieving a Better Life Experience, the ABLE Act passed by a vote of 404-17. It allows people with disabilities to set up ABLE savings accounts with no tax on the earnings and not impact the Medicaid and Social Security threshold of less than $2,000 in assets to receive disability benefits.
The ABLE accounts would be similar to a 529 college savings account.
“Similar incentives are already offered for families to cover future expenses such as college or retirement, so it only makes sense to provide some peace of mind by extending benefits to those planning for the long-term care of individuals with severe disabilities,” Davis said.
Qualified expenses for ABLE accounts would include education, housing, transportation, training, assistive technology and personal support. Total annual contributions to the account would be capped at $14,000.
The cost of operating the program have been offset in the bill.
The bill is expected to also easily pass the Senate, where 74 Senators have signed on as sponsors.