The ABLE Act: New Bills Would Expand Eligibility

Posted by Reeve Foundation Staff in Daily Dose on April 01, 2016 # Advocacy and Policy

On March 17, bipartisan members of the Senate and the House introduced legislation that would expand ABLE Accounts, including lifting the age limit on eligibility to 46.

The original ABLE Act, passed in 2014, created tax-preferred savings accounts for people with disabilities to save for qualified disability-related expenses, including education or training, technology, transportation, and health care. The savings accounts are also exempt from asset determinations for Supplemental Security Income and Medicaid, helping people with disabilities save for the future while maintaining access to crucial services. Unfortunately, in last minute negotiations to reduce the cost of the bill, eligibility for the accounts was limited to those who acquired their disabilities before age 26 and yearly contributions were limited to $14,000 (an raised annually to match the gift-tax limit).

Last week, members of the House and Senate introduced three bills to expand the current ABLE Act:

  • The ABLE Age Adjustment Act would raise the age limit, opening eligibility for people who acquire their disabilities before age 46. This would greatly expand the opportunity for people with paralysis
  • The ABLE Financial Planning Act would allow funds in a 529 college savings account to be rolled over into an ABLE Account.
  • The ABLE to Work Act would allow contributions beyond the gift tax limit if the contributions are from an account owners own earnings.

The Reeve Foundation is monitoring the bills and strongly supports raising the limit on age of onset of disability.