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Disability bill continues to make its way through Congress

Some individuals who have suffered from a disability their entire lives do not qualify for Social Security Disability Insurance benefits because they have not paid into system through payroll taxes. Thankfully, many in this situation are eligible for Supplemental Security Income, which is need-based rather than contribution-based.

SSI benefits are incredibly important to those who rely on them, but like Social Security Disability Insurance, the SSI program suffers from some significant drawbacks. Perhaps most significant are the asset limits. In many cases, SSI recipients may become ineligible if they acquire more than $2,000 in assets.

This puts recipients and their families in a precarious position. Life is expensive, and life with a disability is even more expensive. It is difficult, therefore, to subsist only on SSI benefits without also building up savings and other sources of income to pay for higher education, transportation and other costs. Yet any SSI recipients who exceed the very low asset cap risk losing their benefits.

Thankfully, a legal solution is currently making its way through Congress. The Achieving a Better Life Experience Act (ABLE) is a bill that would allow individuals with disabilities to save money in tax-sheltered accounts without the fear of losing their SSI benefits. The savings accounts were modeled after the popular 529 college savings plans.

As currently proposed, the ABLE Act would give individuals with disabilities the option to put up to $14,000 per year into their savings account. The account balance could reach up to $100,000 without jeopardizing SSI benefits.

While the ABLE Act’s future looks promising, celebration should be withheld until or unless the measure becomes law. Similar proposals have been introduced in recent years and were ultimately rejected. Still, there may be reason to hope. The bill has strong bipartisan support and passed in the House of Representatives earlier this week. It will now move to the Senate.

Source: Disability Scoop, “House Approves Tax-Free Disability Savings Accounts,” Michelle Diament, Dec. 4, 2014

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