ABLE Act Would Help Families Plan for Child's Financial Future

The holidays are a time when Great Aunt Millie sends out “festive” sweaters and a check to be deposited into the savings accounts of each of her great nieces and nephews.  Unless, that is, one of Great Aunt Millie’s nieces or nephews happens to have had a disability since early childhood, in which case having more than $2,000 in savings will disqualify him or her from receiving vital disability benefits later in life, such as those provided by Medicaid.

Does this scenario sound familiar? That’s because it’s an everyday reality for families served by MDA.

One of the most prominent themes voiced by the young adult experts who presented this past September at the MDA National Neuromuscular Transitions Summit was that success in adulthood is closely linked to financial independence and security. In other words, it’s a matter of planning for a “lifetime of happiness,” and not just a “happy childhood.”

But currently, apart from establishing a special needs trust through the services of a specialized attorney, such long-term financial planning is nearly impossible for members of our pediatric community.

However, this could all change in the near future.

On November 15, 2011, Representatives Ander Crenshaw (R-Fla.) and Cathy McMorris Rodgers (R-Wash.), and Senator Robert Casey (D-Pa.), introduced the ABLE Act of 2011, S. 1872/H.R. 3423, in the U.S. House of Representatives and U.S. Senate. If passed into law, bank accounts known as “ABLE accounts” could be established in the name of a child with a disability in the same manner as 529 plan college savings accounts can be created for children (with or without disabilities) by their parents.

ABLE accounts would help families overcome some of the financial struggles caused by disability. These accounts would enable children with disabilities to accrue tax-free savings that could be used to cover a variety of expenses, such as an apartment, transportation and the pursuit of higher education. The money in the ABLE savings account would not disqualify the account holder from receiving from other governmental benefits.

What does the ABLE Act cover?

Some of the qualified disability expenses under the ABLE Act include:

  • Education — including tuition for preschool through postsecondary education, books, supplies and services
  • Transportation — expenses for transportation, including mass transit; the purchase or modification of vehicles; and moving expenses
  • Housing — expenses for primary residences, including rent; purchase of primary residence, or an interest in primary residence; mortgage payments; home improvements; repairs; taxes; and utility charges
  • Employment support — expenses related to obtaining and maintaining employment, including job training, assistive technology and personal assistance supports
  • Health and wellness — premiums for health insurance, mental health, medical, vision, respite care, nutritional support, adaptive equipment and a host of other services
  • Assistive technology and personal care attendant support expenses
  • Other approved expenses and miscellaneous expenses, including financial management and administrative services, legal fees and any other expenses approved by the Secretary of the Treasury

ABLE accounts have no impact on Medicaid eligibility. The beneficiary will never lose eligibility for Medicaid based on the assets held in his or her ABLE account, nor will anyone with an ABLE account who is currently receiving Medicaid benefits lose their benefits — even if their SSI benefits are suspended.

These provisions will allow those living with disabilities to better plan for their future and reduce their dependence on public benefits, while ensuring that Medicaid benefits (for those who are receiving them) are not jeopardized.

This proposed legislation would benefit all members of MDA’s pediatric community — whether college bound or not — and provides essential resources to families when planning for their child’s financial future.


Thoughts on the ABLE Act from members of the MDA community

Angela Wrigglesworth

Angela Wrigglesworth
Houston, Texas
spinal muscular atrophy

“For so long, people with disabilities have been forced to live life on a day-to-day basis. Planning for the future, specifically regarding finances, was simply something that wasn't done. Personally, I have been conditioned to spend what I earn because if I were to save too much, my well-being would be in jeopardy.

"The number $2,000 bounces around in my head daily, and I panic when payments in my account haven't been cashed, leaving me over-the-limit. What if "they" check my account today? Losing my Medicaid benefits is not an option — my independence depends upon those funds.

“The ABLE Act of 2011 changes everything. No longer will families have to worry about the future of their loved one with a neuromuscular disease because their future can be secured with an ABLE account. It is so exciting to know that the dream of a modified vehicle or an accessible home is not a fantasy, but an attainable goal. I wonder how my adulthood would have panned out had this been an option in my youth? Perhaps I would've been trained in a more responsible fashion to handle my monies instead of acquiring the spending habits that are now so very difficult to overcome.

"Regardless of my financial woes, I could not be happier for such a bill to be brought forth to our lawmakers — it is an awakening to the realization those living with neuromuscular diseases can be productive, active and responsible members of their communities.”

 

Vance Taylor

Vance Taylor
Alexandria, Va.
limb-girdle muscular dystrophy

“The ABLE Act of 2011 marks a monumental change in our national approach to caring for the disabled and represents a major step toward the empowerment of the disabled community.

“Had the ABLE Act of 2011 been enacted in my youth, my family and I could have been much better prepared to meet the financial obligations associated with having accessible housing, pursuing a college education and using specialized transportation, without relying on loans and credit cards to get me through my 20s.

“Enabling the disabled to save money now by removing the fear of losing the benefits they so desperately need in order to meet the demands of everyday life is a victory in the battle to repair today’s broken system.”

 

Frank Lombardi
Leesburg, Va.
Charcot-Marie-Tooth disease

“In my opinion, the ABLE Act of 2011 is probably the most significant piece of legislation for people with disabilities since the Americans with Disabilities Act.

Frank Lombardi

“As American children with disabilities are living longer, their families have to not only figure ways of saving for the general costs of a college education, but also have to plan for costs associated with their child’s accessibility challenges while attending school.

"The ABLE Act’s coverage for education is extremely important as it would lessen the fear and potential of losing certain critical entitlements that under current law serve to discourage and deter families from saving for their children’s education and certain other basic needs.

“I believe that as a country we have a responsibility to ensure, within reason, that every citizen regardless of ability has equal access to the American Dream. As a member of the disabled community and a seasoned advocate for equality, I honestly see this act as one of the most significant pieces of proposed legislation to be written in the past 20 years. With all of the fiscal challenges currently being debated on the Hill, congressional members and their respective staff need to take time to listen to their constituents on this one and make it happen.

"People with disabilities are not looking for a handout. We just need the playing field to be leveled somewhat, and that is what the ABLE Act of 2011 will achieve.

“The ABLE Act of 2011 is a real investment in the future of our country, whose children with disabilities will grow and carry the torch of awareness as they advocate for an America that is truly and genuinely an inclusive and more understanding nation. I am grateful to those in Congress who brought this monumental bill up for consideration. They obviously get it! It makes me feel good about the future — it will pay dividends.”

MDA Vice President of Advocacy Annie Kennedy encourages all members of the neuromuscular community to Take 5! and contact their legislators about the ABLE Act, noting, "this is smart legislation that empowers our community to plan for a successful future.”

Thus far, more than 1,300 messages have been sent to members of Congress urging support of the act. "If you have not already done so," urges Kennedy, "please write your congressional member today!"

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