U.S. Rep. John Shimkus (R-Illinois) recently voted for legislation that would allow Americans with disabilities to establish tax-free savings accounts to pay for qualified medical, housing, transportation, and job-training expenses.
The Achieving a Better Life Experience (ABLE) Act of 2014 passed the House 404-17.
“Under current law, people with disabilities are discouraged from saving or seeking gainful employment because doing so puts them at risk of losing means-tested Medicaid and SSI benefits,” Shimkus said. “By giving individuals with disabilities, and families with disabled children, the tools and the opportunity to play a bigger role in their support needs, the ABLE Act empowers people with disabilities to live and work more independently and improves their quality of life.”
If passed by the Senate and signed by President Barack Obama, states would have the option to establish an ABLE program beginning in 2015 under the new law. An estimated 54 million eligible individuals may then go to their financial institution to establish an ABLE account, modeled after current Section 529 savings accounts commonly used for education expenses. To be eligible for an ABLE account, individuals must: 1) be severely disabled before turning age 26, based on a marked and severe functional limitation; or 2) receive benefits under the SSI or Disability Insurance (DI) programs.
More information on the ABLE Act is available here.