ABLE Act Helps Disabled and Keeps Them Qualified for Benefits
A bill that is aimed at promoting the financial stability of our nation’s disabled now awaits the President’s signature after passing both the U.S. House of Representative and the U.S. Senate. The Achieving a Better Life Experience Act (ABLE) will allow individuals with disabilities to save money without jeopardizing their ability to stay qualified for certain benefits like Social Security disability benefits or Medicaid. The goal of ABLE is to provide financial security and independence without sacrificing care.
The public policy director of Tennessee’s Disability Coalition has stated that the act “allows you to live and lead a more productive life,” says Bull. “It gives you some economic self-sufficiency and allows you to have a lot more flexibility with your employment, your health care, supplementary income, things like that.” Under the current law, a disabled individual cannot have assets totaling more than $2,000 without forfeiting eligibility for government programs like Social Security disability benefits. The ABLE Act will allow for a savings account of up to $100,000 for a disabled person and still allow them coverage for benefits.
In addition, the ABLE Act allows for family members and friends of the disabled person to make deposits into the savings account on their behalf. Any expenses that are qualified under the act such as education, housing, and health care would be considered tax-exempt. This is meant to help with things such as co-pays for medication, transportation to and from a job or doctor’s office, and other related expenses.
Tennessee ABLE Accounts
It is estimated that over 170,000 disabled people in Tennessee will be able to benefit from the signing of the ABLE Act by being able to work and grow their savings without fear of losing eligibility of Social Security disability benefits. Unlike Supplemental Security Income (SSI), Social Security disability benefits do not depend on the resources or income of the participant receiving them. This act benefits those receiving needs-based benefit programs like SSI, Medicaid, and SNAP. In order to do so, the act amends Section 529 of the federal tax code to create a tax-free savings account available to cover qualified expenses.
In order to qualify for an ABLE account, you must be able to prove that the onset of your significant disability occurred before the age of 26. If you meet these criteria and are also already receiving Social Security disability benefits or supplemental income, you are automatically eligible to create an ABLE account. If you are not a current recipient of benefits but still meet the age of disability requirement you could still be eligible for an ABLE account if you also meet the criteria for SSI significant functional limitations.
The total annual contributions by all family members and friends to an ABLE account cannot exceed $14,000 in any year. This will be indexed for inflation, and each state will determine the total limit of the account before it becomes taxable. However, the ABLE Act provides that if you qualify for Social Security disability or other government aid only the first $100,000 is considered tax-free. Once an account exceeds $100,000 you can no longer qualify for Social Security benefits, but you can still receive Medicaid.
Contact a Tennessee Social Security Disability Lawyer
If you have questions regarding how the new ABLE Act might affect you or a disabled loved one in the Nashville area, let the experienced Social Security disability benefits lawyers at Calhoun Law, PLC help. Call or contact the office today for a free and private review of your claims.