In the spotlight

Savings Plan Legislation to Assist People With Disabilities

 
By Sophia Hocini, PWDF Program Coordinator for Public Awareness and Education

Historic legislation was passed in December when President Obama signed the ABLE Act into law. Named the “Achieving A Better Life Experience Act of 2014” (ABLE Act), the novel legislation allows Americans with disabilities to open tax-free bank accounts to pay for expenses related to education, housing, and healthcare.[1]

According to H.R. 647, the purpose of the ABLE Act is twofold: To maintain the quality of life of people with disabilities through the saving of private funds, and to provide funding to people with disabilities that will supplement benefits provided through federal funding, employment, and other sources.[2]

The ABLE Act will allow people to save for qualified disability-related expenses for eligible individuals more effectively without sacrificing eligibility for federal assistance such as Supplemental Security Income (SSI) or Medicaid.

Contributions to the account would be made with after-tax dollars and earnings would be tax-free.[3] Account holders who receive SSI would be allowed to save up to $100,000; if the account balance exceeds $100,000, SSI benefits will be suspended.[4] The accounts must be used for “qualified expenses” such as education, housing, and employment training,[5] otherwise distributions will be subject to income tax and a 10% penalty.[6]

ABLE accounts may become available as early as this year.  Federal regulations and guidance are still to be issued and individual states must establish a qualified ABLE program in order for the accounts to take effect in that state.[7] To be eligible to benefit from an ABLE account, individuals must have been diagnosed with a disability prior to age 26.

PWDF Profile

Who We Are

People With Disabilities Foundation is an operating

501(c)(3) nonprofit organization based in San Francisco, California, which focuses on the rights of the mentally and developmentally disabled.

Services

Advocacy: PWDF advocates for Social Security claimant’s disability benefits in eight Bay Area counties. We also provide services in disability rights, on issues regarding returning to work, and in ADA consultations, including areas of employment, health care, and education, among others. There is representation before all levels of federal court and Administrative Law Judges. No one is declined due to their inability to pay, and we offer a sliding scale for attorney’s fees.

Education/Public Awareness: To help eliminate the stigma against people with mental disabilities in society, PWDF’s educational program organizes workshops and public seminars, provides guest speakers with backgrounds in mental health, and produces educational materials such as videos.

Continuing Education Provider: State Bar of California MCLE, California Board of Behavioral Sciences Continuing Education, and Commission of Rehabilitation Counselor Certification.