WASHINGTON, DC -- President Obama signed into law the ABLE Act today, following a bipartisan vote in the Senate earlier this week. The signing culminated an eight-year campaign to gain approval for tax-free savings accounts to help individuals and families finance their longterm disability needs.
Sponsored by Senators Bob Casey (D-PA) [left] and Richard Burr (R-NC), the bill attracted unusual bipartisan support, including co-sponsorships by both Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell. ABLE, or the Achieving a Better Life Experience Act, was voted out of the House last week 404-17.
"Autism Speaks is grateful for the tireless effort of Senators Casey and Burr who joined our champions in the House to build extraordinary bipartisan support for the bill," said Autism Speaks President Liz Feld. "We also thank Senators Reid and McConnell for their early support and leadership to make this a priority in the closing days of this Congress. It also could not have been done without the Senate Finance Committee leadership provided by Ron Wyden (D-OR) and Orrin Hatch (R-UT), whose long-standing support for the bill was vital.
“Passage of this bill through the House and Senate shows that Congress can work to accomplish big things and that there is no greater force than an idea whose time has come. Finally, this could not have been done without the power of individuals coming together to advocate for good policy that makes sense.”
ABLE amends the federal tax code to allow tax-free savings accounts to help finance disability-related needs. They are similar to Section 529 college savings accounts and eliminate, for ABLE accounts, the current $2,000 cap on savings for individuals with disabilities.
Under previous law, people with disabilities who saved more than $2,000 fail to qualify or risk the loss of their Supplemental Security Income (SSI), Medicaid and other benefits. Funds deposited in ABLE accounts would have to be used exclusively for disability-related expenses. If signed into law, ABLE accounts would not become available until later next year because of the need for the Internal Revenue Service to define qualifying expenses and complete other regulatory steps.
"For years, we’ve created incentives in the tax code to save for higher education or to save for retirement," said Casey. "Now at long last for Americans who have a disability, those families will be able to save – whether it’s to pay for health care or education, the basic expenses that these individuals with disabilities have wanted to save for for many years.
"We believe -- and this is what undergirds the ABLE Act-- that people with a disability have a lot of ability to live a full life if we give them the tools," Casey added. "One of those tools is an incentive to save for the future."
Burr said the American people “look at us and say, this makes common sense. What took so damn long? Well, you know, I’m embarrassed that it took so long, but this is a product that Congress, the Senate, can be proud of.
"One of the clues that something was wrong was the fact that we penalized individuals who had disabilities from holding assets," Burr added. "It meant they couldn’t buy a car and have it be in their name. It meant that they could only earn so much before they were penalized. What we’ve done is we’ve changed the landscape."
According to an analysis by the Congressional Budget Office, eligible expenses could include:
- employment training and support
- assistive technology and personal support services
- health, prevention, and wellness
- financial management and administrative services
- legal fees
- expenses for oversight and monitoring
- funeral and burial expenses
- other expenses to be determined by IRS
To learn how ABLE accounts would work, go HERE.
Earlier this week. a driving force behind the creation of ABLE accounts, Steve Beck, the father of a daughter with Down syndrome and a board member of the National Down Syndrome Society, died suddenly. In his honor, Rep. Ander Crenshaw (R-FL), the original House sponsor of the bill had the measure renamed in Beck's honor.
“Steve represents the soul of the ABLE Act and played a central role in getting if off the ground more than eight years ago,” said Crenshaw. “More importantly, on behalf of his own daughter Natalie and millions of others with disabilities, Steve never gave up hope that ABLE would move across the Congressional finish line and become law of the land. History was made in large part because of his steadfast dedication to improve the quality of life for so many – an important lesson we would all do well to keep close a heart.”
Several states are now moving to create ABLE accounts providing state tax income benefits, consistent with the development over the years of college savings accounts at both the federal and state levels. Massachusetts created a state ABLE program earlier this year.