The May issue of our AchievABLE Newsletter contains stories on the following:
- New Webinar: Maximizing ABLE Accounts: Presented by the National STABLE Account Plan
- ABLE NRC Ambassador Highlight: Héctor Ramírez
- Support in Congress Grows for ABLE Age Adjustment
- Housing and Urban Development (HUD) Releases Guidance on ABLE Accounts
- Top Three Questions: May 2019
- Webinar Archive: Using ABLE Accounts to Support Youth from Transition to Independent Living
New Webinar: Maximizing ABLE Accounts: Presented by the National STABLE Account Plan
Throughout 2019, the ABLE National Resource Center (ABLE NRC) will be conducting a series of bi-monthly “ABLE Program Spotlight” webinars. These webinars are intended for those who already have a basic understanding of ABLE. State ABLE programs that are a part of multi-state collaborations, as well as individual state programs, will provide program-specific details, general guidance and best practices. Each program spotlight will also cover the range of investment options offered, an often confusing aspect for individuals who want to make the most of their ABLE account, but are new to the concepts of investing and saving.
In May, we will showcase the STABLE Account Plans which are comprised of a 12-state partnership* led by Ohio. They offer high-quality, low-cost ABLE savings and investment plans which are available to eligible individuals nationwide.
Objectives of this webinar include:
- Maximize your ABLE account
- Help you better understand investment options and how they can work for you
- Become familiar with STABLE Account and the advantages of the partner state model
- Learn about STABLE Account program features
- Hear what STABLE Account participants have to say
- Questions and Answers
The webinar will be moderated by Miranda Kennedy, Director, ABLE NRC. Panelists include:
- Karen Crider, Manager, South Carolina ABLE Savings Program
- Thomas Hatch, Operations Manager, STABLE Account
- Doug Jackson, Deputy Director, STABLE Account
*STABLE partner states include: Arizona, Georgia, Kentucky, Missouri, New Hampshire, New Mexico, Oklahoma, South Carolina, Vermont, West Virginia and Wyoming. The STABLE program partner states are led by Ohio.
ABLE NRC Ambassador Highlight: Héctor Ramírez
Héctor Ramírez is a Latino Chiricahua Apache, Two Spirits who is also a member of the LGBTQ community. Up until last month, Héctor was living in a one-bedroom apartment in Canoga Park, California. Ze* was sleeping on a mattress on the floor in the “dining room” so that hir* mom could have the bedroom. As an individual with Autism and Bipolar Disorder, Héctor is ABLE-eligible and has been saving funds in hir ABLE account to maintain a safety net while working to become self-sufficient. Héctor has also been saving for a home, something ze would not have been in a position to do if it were not for hir ABLE account through CalABLE. A lifelong disability rights advocate, Héctor knows that hir story and goals are shared by others in the disability community that ze helps to serve through hir work on the Board of Directors for Disability Rights California and National Disability Rights Network.
May is Mental Health Awareness Month and we can think of no story more powerful to share with our friends and ABLE-eligible members of the Mental Health Community this month than that of our ABLE NRC Ambassador, Héctor Ramírez. Just last week, Héctor finalized the purchase on a new home with a down payment made possible by the funds in hir ABLE account. Last Thursday, ze got the keys to hir new home and got busy right away putting in new floors and painting it just the right color in time for Mother’s Day weekend, as a gift to hir mom who will be living there as well. They are thrilled to be out of the one-bedroom apartment and Hector is happy to no longer be sleeping on the floor. They even got a new bed for the dog. Héctor now owns a home and doesn’t think ze will ever have to move again.
Hector shares that, “I feel like this is a dream that is not happening but it is. My ABLE account has helped me in ways I did not think it would. I came into this program because I wanted to have a safety net for when my benefits were not there so that I would not end up homeless. And instead, I am moving into a new home for me and my mom. I have met some of my new neighbors and their families. While it’s only a couple of miles from where I used to live, I can’t help but think that even the skies look different. I have been waking up with so much excitement, it feels like being on the top of a rollercoaster about to start the ride, just about to plunge into the experience. I am so excited to start this new part of my life!”
* Ze and hir are the most popular forms of gender-free pronouns in the online LGBTQ community.
Support in Congress Grows for ABLE Age Adjustment
This article first appeared in National Disability Institute’s (NDI) March/April Issue of the Washington Insider Newsletter. The ABLE National Resource Center is managed by NDI.
In the previous edition of National Disability Institute’s (NDI) Washington Insider, we reported that legislation was expected to be introduced immediately to dramatically increase the number of individuals with disabilities who could benefit from ABLE accounts. We are pleased to report that bills in both the U.S. Senate and House are now in play, and support for their enactment is growing.
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 savings accounts that are designed to enable individuals with disabilities to save for and pay for qualified disability expenses (QDEs).
Previously introduced in the 114th and 115th Congresses, the bipartisan ABLE Age Adjustment Act has now 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 Cardenas (D-CA) and McMorris-Rodgers (R-WA). Co-sponsorship of both the House and Senate versions of the bill is growing and on a strong bipartisan basis.
Why is an increase in the age of eligibility necessary?
As currently written, the existing ABLE Act prevents otherwise eligible individuals with disabilities 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 current 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. Moreover, an increase in the number of potential account owners is critical for the long-term sustainability of ABLE programs across the country. There are currently 41 state ABLE programs, including Washington, D.C. (with Arkansas being the most recent state to establish an ABLE program), empowering individuals with disabilities 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 an expansion of age of onset eligibility and other enhancements. 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.
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 co-sponsor 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. Please visit the U.S. Senate website to find the contact information for your senators, and the U.S. House of Representatives website for a directory of representatives.
Housing and Urban Development (HUD) Releases Guidance on ABLE Accounts
On April 26, 2019, the U.S. Department of Housing and Urban Development (HUD) released guidance to Public Housing Directors, Managers and Administrators regarding the “Treatment of ABLE accounts in HUD-Assisted Programs.” The ABLE National Resource Center (ABLE NRC) is pleased to see that the guidance acts to reinforce the language, spirit and congressional intent of the ABLE Act to ensure that ABLE accounts should “supplement, but not supplant” public benefits being provided to the ABLE account owner, including supports and services provided by HUD programs.
The guidance letter directly states that “Given that the ABLE Act creates a federally mandated exclusion for ABLE accounts applicable to HUD programs, in determining a family’s income, HUD will exclude amounts in the individual’s ABLE account pursuant to 24 CFR 5.609(c)(17). The entire value of the individual’s ABLE account will be excluded from the household’s assets. This means actual or imputed interest on the ABLE account balance will not be counted as income. Distributions from the ABLE account are also not considered income. All wage income received, regardless of which account the money is paid to, is included as income.”
The contents of the letter are divided into the following topics:
- Background on the ABLE Act
- Applicability to HUD programs
- Definition of terms
- Treatment of ABLE account in HUD programs
- Contributions made by the designated beneficiary
- Contributions made by others directly into the ABLE account
- Rollovers from existing ABLE accounts
- Verification
- Contact information
Top Three Questions: May 2019
How do I open an ABLE account?
All ABLE accounts are opened online, averaging less than 10 minutes. The Road Map to Enrollment walks people through the process. The state comparison tool can also be helpful when deciding which plan to open. If you live in a state that is offering state tax deductions or credit for contributions, it would be to your advantage to select your state’s ABLE plan. If you want easy access to your savings, you may want to select a plan with a debit card or checking option. You may want to compare fees as well. Once you select a state ABLE plan, simply click on the program name within the state comparison tool, and you will be directed to the state plan to open the account. Write down the name of the plan, their contact number and your account number to reach them in the future.
One ABLE account may be opened in the person’s name who has the qualifying disability. The ABLE account owner, their parent or a guardian are allowed to open an ABLE account. A person who has a representative payee is allowed to own an ABLE account. ABLE account owners are encouraged to learn skills around earning money, saving, managing their spending and investing within their ABLE account, with the support of family and friends within their circle of support.
What is a Qualified Disability Expense (QDE)?
A person who receives Supplemental Security Income (SSI) must use their SSI to pay for housing and food. An SSI beneficiary may use ABLE funds to help pay for additional housing expenses. Housing expenses include rent, mortgage, property taxes, utilities, maintenance and modifications.
A vacation designed specifically for a person with a disability, personal assistant expenses or a camp program for people with disabilities are QDEs. If a physician or an Individual Education Plan (IEP) orders a specific program, vacation or therapy, that would also qualify a QDE. Expenses that are not QDEs, such as gifts for others, a vacation or gambling may be purchased with funds not saved within ABLE. The webinar, Qualified Disability Expenses, provides more information about QDEs.
People who have an ABLE account may receive an Internal Revenue Service (IRS) form (1099-QA) for reporting distributions from their ABLE account, or an ABLE program may send you a form (5498-QA) for reporting your ABLE contributions. Keep receipts of your QDE purchases for the calendar year and hold with the forms for three tax filing seasons, in case the IRS conducts an audit. ABLE account owners are not required to file income taxes simply because they own an ABLE account.
How does ABLE work with SSI and SSDI?
ABLE account savings up to $100,000 does not affect SSI eligibility. Social Security Disability Insurance (SSDI) does not have a resource or savings limit, therefore an SSDI beneficiary can save as much as the state ABLE plan allows. Any amount of ABLE savings does not change eligibility for any type of Medicaid. Therefore, many families with more than one young child with a significant disability are opening one ABLE account for each qualified individual. Youth who are starting their first job, or who are age 18, are opening ABLE accounts to exclude their savings, within ABLE, when applying for disability benefits.
People with disabilities who work, or who are unable to work, are opening ABLE accounts to protect their savings. Many seniors who had a significant disability onset, prior to age 26, are also opening ABLE accounts as a retirement savings option. Often, family members contribute or designate inheritance up to $15,000 to the ABLE account. Some people are establishing a Special Needs Trust (SNT), allowing for contributions into ABLE. An ABLE account can be opened at any age. The sooner an account is opened, the more money can be saved over time. State ABLE programs allow from $100,000 – $529,000 to be saved within their plans, and investment options allow the savings to grow tax-free.
Webinar Archive: Using an ABLE Account to Support Youth from Transition to Independent Living
A recording of April’s webinar, “Using an ABLE Account to Support Youth from Transition to Independent Living,” is now available.
Additional materials that can be found on this webinar archive page include an “ABLE account, Special Needs Trust and Pooled Trust Comparison Chart Tool” co-developed by the ABLE NRC and our partners with the Special Needs Alliance and an ABLE NRC case summary written by attorney Jim Sheldon on “Using an ABLE Account to Support Transition.”