A bipartisan, bicameral legislative package introduced by U.S. Sen. Richard Burr (R-NC) and U.S. Rep. Cathy McMorris Rodgers (R-WA) would expand access to financial planning tools for disabled individuals and their families.
The lawmakers previously introduced the Achieving Better Life Experience (ABLE) Act, which was signed into law in 2014. The law enables disabled people and their families to save for long-term care using tax-advantaged 529-style savings accounts.
On Tuesday, the lawmakers introduced the ABLE 2.0 package of bills. The ABLE to Work Act, the ABLE Financial Planning Act and the ABLE Age Adjustment Act would build on the ABLE Act by expanding access to tax-advantaged savings accounts and increasing earlier thresholds.
“Many individuals with disabilities are willing and able to work, but our current one-size-fits-all system punishes those who do by making them ineligible for benefits,” Burr said. “Having a job is an essential element of the American dream.”
The ABLE to Work Act aims to help individuals save more money in ABLE accounts if they work and earn income. Beneficiaries who earned income from a job could save up to the federal poverty level of $11,700 in ABLE accounts. Additionally, they would qualify for the existing Saver’s Credit when they deposit funds.
“The ABLE to Work Act gives disabled Americans and their families’ better options to plan for the future,” Burr said. “Work is about more than financial support; it’s about participating in society and building a sense of purpose. It is wrong to exclude the most vulnerable members of our community from the benefits of having a job.”
The new legislation would improve the ABLE Act by permitting rollovers from 529 college savings plans as well as by allowing individuals who become disabled after turning 26 years old to open and save in an ABLE account, Burr said.
A job is more than a paycheck, McMorris Rodgers said. It gives people a purpose and dignity.
“Too often, people with disabilities live in poverty because the current system forces them to make a choice between disability benefits and work,” McMorris Rodgers said. “This legislation empowers people with disabilities to save the money they earn from work while remaining eligible for the critical disability safety net. At the end of the day, this is about empowering people with disabilities, like my son Cole, to live their fullest, independent life.”
The ABLE Financial Planning Act would allow families to rollover savings from 529 college savings accounts in ABLE accounts without tax penalties if an individual becomes disabled and can’t use 529 savings for college education.
The ABLE Age Adjustment Act, meanwhile, would raise the age threshold for those eligible to open ABLE accounts from 26 to 46 years old. The provision is tailored for individuals who become disabled later in life from conditions like multiple sclerosis, Lou Gehrig’s disease or paralysis from an accident.