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ABLE accounts – Leveling the financial playing field for individuals with disabilities

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ABLE accounts – Leveling the financial playing field for individuals with disabilities

December 19, 2014 marked a great day in the history books for people with disabilities.

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That’s the day President Obama signed the Steven Beck Jr. Achieving a Better Life Act into federal law.  For many years, the disabled have had to fight not only to be included in the workplace, but also to keep their government benefits while working. Many in this community hail the ABLE accounts as a chance to do just that. Under ABLE, eligible individuals and families will be allowed to establish savings accounts that will not affect their eligibility for SSI, Medicaid and other public benefits.

As early as 2004, plans had been in the works to allow a tax-deferred savings tool for the disabled.  Jacksonville’s very own Sen. Ander Crenshaw (R-FL) became the effort’s champion in 2007, as he sponsored legislation to do just that.  Seven long years later, this strongly-supported bipartisan bill was passed, and became law.  As a federal law, it’s now dependent on each state to pass their own version, with rules and regulations for implementing it.

Luckily, Florida is among those states ahead of the curve.  We’ve passed our own state law, and it was signed by Governor Scott mid-2015.  The Florida Prepaid College Fund has been tapped to oversee the implementation of ABLE in FL, with a projected start-date rumored to be sometime this coming summer.  There is a dedicated website (www.myablesavings.com) for information and updates on ABLE. This includes the eligibility requirements (must be blind or disabled by a condition that began prior to the individual’s 26th birthday), benefits and limitations of the program, and a contact form to receive updates directly to your email. 

More details about ABLE accounts:  Individuals may only open one ABLE account. The account owner is the individual with the disability, however, there may be someone attached to the account with signature authority as well.  Contributions can be made up to $14,000 annually by the account owner, family members, and employers.  Earnings on these accounts will not be taxed. Once the ABLE account reaches $100,000 in savings, beneficiaries will be deemed ineligible for SSI until the account is spent down.  However, they will simply be suspended from eligibility for the time, not exited from the program. Savings in ABLE accounts can accrue to a level set by the state where the account is located that matches the limits for 529 accounts.  Account owners will be responsible to obtaining and maintaining documentation needed for both opening an account, as well as keeping receipts on qualified expenses, in the case of an audit, similar to a health savings account model.

Monies can be spent on a wide variety of items, including: education (includes post-secondary), health care, transportation, housing, employment training and support, assistive technology, financial management help, legal fees,  basic living needs, and more. 

Good news arrived early this year, when it was ruled that ABLE accounts can be opened by individuals regardless of the state they live in, an incentive for states to get their ABLEs up and running. That being said, Florida residents may want to wait and consider other state plans before signing up for the Florida plan.  Federal officials anticipate that as many as seven states will have ABLEs up and running by this summer. 

There are still many details to be worked out before ABLEs open, but as a professional as well as a parent of a child with a disability, I’m excited for this new opportunity to save and allow for greater independence.

By: Karen Prewitt, Family Care Council area 4 co-chair

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