April 2019 AchievABLE Newsletter

The April issue of our AchievABLE Newsletter contains stories on the following:

New Webinar: Using an ABLE Account to Support Youth from Transition to Independent Living

An ABLE account offers an opportunity for qualified individuals with disabilities to save for a better life experience without jeopardizing means-tested benefits. The savings in an ABLE account may be used, tax-free, for a variety of qualified disability expenses (QDE), many of which are transition-related and may improve individual outcomes.

The purpose of this webinar is to educate individuals with disabilities, their families, providers and advocates on how establishing and using an ABLE account can provide options and choices to improve the life trajectory of transition-age youth. This webinar will address:

  • How is “transition age youth” defined?
  • How is “transition” defined?
  • How can an ABLE account help?
  • Best practices to consider.

The webinar will be moderated by Miranda Kennedy, Director, ABLE National Resource Center (ABLE NRC). Panelists include:

  • Marlene Ulisky, Disability Benefits Expert, ABLE NRC
  • Transition age ABLE account owners
  • Parents of ABLE account owners

ABLE Accounts: A Tool to Enhance Financial Stability

National Disability Institute (NDI), ABLE National Resource Center’s (ABLE NRC) founder and manager, envisions a society in which people with disabilities have the same opportunities to achieve financial stability and independence as people without disabilities. April is National Financial Capability Month and the perfect time to celebrate that vision.

April is also National Social Security Month, a month where the Social Security Administration (SSA) highlights tools and resources such as ABLE accounts to help individuals feel secure, today and into the future.

Financial Capability Month and National Social Security Month can complement each other perfectly through ABLE. For SSA beneficiaries receiving Supplemental Security Income (SSI) and/or Social Security Disability Insurance (SSDI), an ABLE account can be a powerful financial stability tool, which can be enhanced by opening a my Social Security account to keep track of payments and report wages.

SSA recognizes the importance of sharing accurate information regarding ABLE accounts and recently conducted a webinar on Achieving Financial Independence with Ticket to Work and an ABLE Account, along with the following blog.

ABLE accounts are Section 529A savings accounts that allow eligible persons with a significant disability that began before age 26 to save without an effect on most means-tested benefits. The savings grow tax-free and may be used for qualified disability expenses (QDEs). QDEs fall into 11 broad categories and may include expenses for housing, basic living or items or services related to health, prevention and wellness. Other examples of QDEs related to work include:

  • Transportation to and from your place of employment
  • Employment training and support
  • Job coaching
  • Interview preparation and resume development
  • Costs associated with certificates and accreditation
  • Assistive technology

To increase savings, family members, friends or an employer can also contribute to an individual’s ABLE account. Money contributed by these third parties is not counted as income by public benefits programs.

At the end of 2018, more than 35,000 individuals established ABLE accounts in one of the 41 state programs, including the District of Columbia, with a combined savings of over $170 million. However, many ABLE-eligible individuals have delayed enrollment due to myths surrounding ABLE accounts.

MYTH: If I save over $2,000, I will lose my SSDI, SSI and Medicaid.

Many people believe that they will lose all benefits when they exceed $2,000 in savings. While it is true that the SSI and Medicaid programs have a $2,000 resource limit for an individual, the first $100,000 in an ABLE account is not counted. If you have more than $100,000 in an ABLE account, the excess counts against the resource limit. When the resource limit is exceeded, the SSI payment is temporarily suspended, but Medicaid continues. This special rule only applies if savings, other than those in the ABLE account, do not exceed the $2,000 resource limit. If you are receiving SSDI benefits, there is no limit on how much you can save.

MYTH: If I save all of my earnings in an ABLE account or have it directly deposited, Social Security will not count the earnings.

When you are working and depositing earnings into an ABLE account, Social Security does not change the way they look at your earnings. They apply their regular income counting rules to earnings and to other income. While direct deposit of earnings into an ABLE account can be used and is encouraged, it is not a way to avoid income counting rules.

MYTH: An unlimited amount of money can be deposited into an ABLE account.

The total annual contributions for all contributors in 2019 is the same as it was in 2018, $15,000. Employed ABLE account owners may contribute an additional $12,140 of their gross income into their ABLE account if they do not have an employer-sponsored retirement plan. Residents of Alaska and Hawaii can contribute even more up to $15,600 or $14,380 more, respectively. Contributions grow tax-free, and the total aggregate account limit overtime is subject to the state limit for 529 savings accounts, which currently ranges between $100,000 and more than $500,000.

ABLE NRC Ambassador Highlight: Amy Tessler

Amy Tessler and her son, Scott, both smiling outsideAmy Tessler is the mother of Scott, a 23-year-old member of the Project Search Team at the DoubleTree Hotel in Pleasanton, California. Scott was diagnosed on the autism spectrum when he was two years old. He has a significant disability which meets the criteria for ABLE eligibility.

In 2018, Amy and her husband/Scott’s father, Steve, spent a total of 15 minutes opening Scott’s Ohio STABLE account using their online application. They plan to take advantage of the free and easy rollover offered to all ABLE account owners and to switch to the CalABLE program in California, their home state, once the debit card option is in place. The CalABLE program opened in December 2018, and the debit card is on track to launch during the summer of 2019.

As one of our nine 2019 ABLE National Resource Center (ABLE NRC) Ambassadors, Amy shares that by paying for Scott’s full share of housing expenses with his Supplemental Security Income (SSI) check, wages and supplemental funds from his ABLE account, Scott’s SSI payment is not reduced by one third. This means that he has an additional $257 dollars available each month, which is an extra $3,084 a year!. Amy wants to share this strategy with other parents because who wouldn’t bend over to pick up over $3,000 laying on the sidewalk? However, putting this strategy in place takes slightly more effort than that.

Amy is not only an ABLE NRC Ambassador and Scott’s mom, guardian and conservator. She also serves as the Education and Outreach Coordinator for the Dale Law Firm, a practice focused on developing estate plans that involve persons with disabilities. After retiring from a 26-year career as an industrial engineer, Amy found a role in the same law firm that set up Scott’s Special Needs Trust (SNT) when he was 10 years old.

The SNT was established to provide direction for Scott’s safety and emotional well-being in case of an unexpected event in the future. The trust will be the primary source of his support, in addition to means-tested public benefits such as the SSI and Medicaid he currently receives. He may become entitled to Child Disability Benefits and Medicare once Amy and Steve retire. Scott’s younger sister, Jenna, will be able to enjoy her brother and will not be burdened by financial stressors related to his disability and expenses for his ongoing support because the combination of his SNT, ABLE account and other public benefits will ensure that Scott’s future is secure.

Amy has been very strategic in her approach. To learn more and to help Scott reach his full potential, Amy is attending workshops in person and accessing the ANRC regularly. She sums it all up by sharing, “Scott will always need help managing money and paying his bills. It would not be prudent to give him access to a large amount of money, but having the ABLE account will allow him to gain some basic financial skills. In our situation, having both the SNT and an ABLE account is ideal for maximizing his benefits and helping him achieve some financial independence.”

Advocate for the ABLE Age Adjustment Act (S. 651/H.R. 1814)

What is the ABLE Age Adjustment Act?

The ABLE Age Adjustment Act (S. 651/H.R. 1814) would amend Section 529A(e) of the Internal Revenue Code to increase the eligibility threshold for ABLE accounts for onset of disability from prior to age 26 to prior to age 46. ABLE (Achieving a Better Life Experience) accounts are tax-advantaged accounts that are designed to enable individuals with disabilities to save and pay for qualified disability expenses.

Previously introduced in the 114th and 115th Congresses, the bipartisan ABLE Age Adjustment Act has been reintroduced in the 116th Congress by Senators Bob Casey (D-PA), Jerry Moran (R-KS), Chris Van Hollen (D-MD) and Pat Roberts (R-KS). A House version was also recently reintroduced by Representatives Tony Cardenas (D-CA) and Cathy McMorris-Rodgers (R-WA).

Why is an increase in the age of eligibility necessary?

As currently written, the existing ABLE Act prevents otherwise-eligible individuals with disabilities (many of whom spent years advocating for the Act) from realizing the benefits of ABLE accounts. By passing the ABLE Age Adjustment Act, more than 14 million people with disabilities would be allowed to open ABLE accounts, nearly doubling the currently eligible population. Passing this critical legislation will increase the financial security of people across the spectrum of disabilities without jeopardizing their much-needed public benefits.

Why is it important that the ABLE Age Adjustment Act be passed this Congress?

There are now over 40 state ABLE programs that empower individuals with disabilities, either in their own states or nationwide, to achieve and maintain health, independence and quality of life. However, the long-term sustainability, availability and affordability of these programs are in doubt without this expansion of eligibility. Data from the National Association of State Treasurers (NAST) in 2017 showed that passage of the ABLE Age Adjustment Act is critical for the sustainability of ABLE programs. According to the NAST’s Sustainability Report, the “age increase legislation… will be paramount to achieving ABLE sustainability…”

How can you help?

Advocates should reach out to each of their two U.S. Senators and their member of the U.S. House of Representatives and urge them to cosponsor the ABLE Age Adjustment Act, S. 651 in the Senate, and H.R. 1814 in the House. Members of Congress need to hear that it is imperative that the legislation be enacted immediately both to bolster the national viability of state ABLE programs and to dramatically expand the reach and benefit of ABLE accounts to individuals who experience disability for the first time before the age of 46. Find and contact your elected officials.

Top Topics: April 2019

When is it time to open an ABLE account?

Many people are surprised that ABLE savings accounts can be opened at any time. ABLE savings, up to $100,000, does not impact eligibility for Supplemental Security Income (SSI). Also, funds in an ABLE account do not affect Medicaid, and a parent or guardian can open an ABLE account for a child born with a significant disability, allowing for greater savings over time.

In the past, parents, case managers and individuals with disabilities would monitor savings levels, with an eye towards spending down funds, to maintain eligibility for means-tested benefits. For ABLE-eligible individuals, spending down can now be replaced with opportunities to save within ABLE for long-term goals. Many people are even opening ABLE accounts to ensure financial stability for retirement.

Are you on track to maximize your ABLE contributions in 2019? The following are questions to consider:

  • Have I reached my ABLE contribution limit of $15,000 in 2019?
  • If I work and do not have an employer-sponsored retirement account, how much can I regularly deposit from my earnings directly into ABLE to reach the maximum of $12,140 from my earnings for 2019? (Residents of Alaska $15,180 and Hawaii $13,960)
  • Can I invite family and friends to contribute to ABLE for the holidays, special occasions or towards a specific savings goal or a one-time, big-ticket purchase?
  • Is my employer be interested in contributing to my ABLE account since I do not participate in the employer-matched retirement account?

The following are questions to consider when figuring out when, how and on what QDEs ABLE funds should be used to pay for this year:

  • Should I buy an item that could count as an impairment-related work expense (IRWE) under SSI and Social Security Disability Insurance (SSDI) now, or wait?
  • Is it best to pay for medical expenses before the end of the calendar year?
  • If I work and have a tax liability, should I purchase something now that will qualify as a tax deduction or credit to lower my tax bill? See: https://www.irs.gov/publications/p907
  • Have I explored all other options which may pay for an item or service that I need when I am deciding whether to use my ABLE contributions? For example, it is important to apply for college financial aid through FAFSA and to apply with Vocational Rehabilitation for Assistive Technology needed for employment before paying for items from ABLE.

Have you had a conversation about ABLE accounts and how they can help individuals who have had a significant disability onset prior to age 26? Family members, friends or an extended circle of support may appreciate the chance to provide financial assistance or designate an inheritance to an individual with a disability. For many, the need to open an ABLE account, a Special Needs Trust (SNT) or a Pooled Trust is important to ensuring retention of benefits and ease of access to funds for future qualified disability expenses (QDE), including housing expenses. All ABLE accounts are opened online, averaging less than 10 minutes to complete the process. Review the Road Map to Enrollment to learn more about the enrollment process.

Webinar Archive: Making the Most of Your ABLE Account with the National ABLE Alliance

A recording of March’s webinar, “Making the Most of Your ABLE Account with the National ABLE Alliance,” is now available.