The Senate Finance Committee today moved to the full Senate the ABLE to Work Act, sponsored by Senator Richard Burr (R-NC), and the ABLE Financial Planning Act, sponsored by Senator Bob Casey (D-PA), bipartisan bills that would improve financial resources for individuals with disabilities.
After a decade-long push by advocates on the federal and state level, the first tax-preferred ABLE savings accounts were established this year to empower families to save for disability-related expenses. The legislation moved today by the committee would enhance the landmark ABLE Act enacted in 2014. The ABLE Act has been heralded as one of the most important pieces of disability legislation since the Americans with Disabilities Act (ADA).
Specifically, the ABLE to Work Act enhances the ABLE Act
of 2014 by supporting individuals with disabilities who are employed by permitting them to deposit additional funds earned through work into ABLE accounts without forfeiting benefits. Additionally, the ABLE Financial Planning Act aims at empowering families to roll over 529 college savings plans to ABLE accounts for disability-related expenses.
“I am excited this legislation to strengthen the ABLE Act has advanced out of committee and can soon be considered by the full Senate,” said
Senator Burr. “The ABLE to Work Act is about promoting employment and independence for people with disabilities. It will allow people with disabilities to save more money if they have a job and earn an income, and it will also make them eligible for the Saver’s credit. I’m also pleased to see the Committee advance the ABLE Financial Planning Act, which will allow families with a special needs child to have more control over their financial futures. I’m urging my colleagues in the Senate to pass this legislation as soon as possible.”
“Advancing these pieces of legislation moves us one step closer to building on the foundation of the ABLE Act,” Senator Casey said
. “Fundamentally, these efforts are about breaking down barriers for those with disabilities so they have a fair shot to achieve their dreams.”
The ABLE to Work Act expands on the goals of the ABLE Act by encouraging work and self-sufficiency. The legislation allows individuals and their families to save more money in an ABLE account if the beneficiary works and earns income. Specifically, an ABLE beneficiary who earns income from a job could save up to the Federal Poverty Level, which is currently at $11,770. The bill will also allow ABLE beneficiaries to qualify for the existing Saver's Credit when they put savings in.”
The ABLE Financial Planning Act would allow families to roll over savings in a 529 college savings plan into an ABLE account. Many families save for a child’s college education by opening a 529 account, sometimes before their child is even born, only to learn later that their child has a severe disability like autism. In other cases, a child could incur a disability from an accident. In such instances, these families have funds locked in a 529 that they could use to help cover their child’s lifelong expenses. If they withdraw the funds for anything other than college expenses, they face taxes on their withdrawals. The ABLE Financial Planning Act would help these families by allowing them to roll over the funds in their 529 account into an ABLE account for their child.