Imagine for a moment that you are 23 years old. You’ve just finished your undergraduate degree and you’ve secured your first job! Imagine, also, that you were born with a health condition that significantly limits your mobility. Perhaps you feel you have already lived a lifetime of accessibility challenges, including everything from the installation of an expensive home modification that makes it possible for you to enter and exit your house easily, to the long search for a brand of clothing that fits comfortably while seated in a wheelchair. It’s all in the details – and there are many – when it comes to comfortable, hassle-free daily living.
Government benefits, while not perfect, at least provide a base of funding and services for people with disabilities through such programs as Home & Community Based Waivers, Medical Assistance, Supplemental Security Income (SSI), and Social Security Disability Insurance (SSDI). Some of these programs have one important requirement: the total of your assets must remain under $2,000 in order for you to continue to receive this support. That means whatever money you have in your savings account, checking account, retirement fund – all of it must add up to only $2,000 or you’ll lose these benefits.
So, what options do you have to save money? Special needs trusts have historically provided one solution to this puzzle. There is no cap to how much can be saved in a special needs trust, however a trustee is required to manage the account, which means the beneficiary isn’t in control.
To revisit the above scenario: you’ve graduated college, you’re excited about your new job, but you need your government benefits to comfortably live in your own home and continue to work. Perhaps you already have a special needs trust but you’d rather not give up your autonomy by using that as your only place to save your income.
Enter the Achieving a Better Life Experience (ABLE) Act. First introduced as federal legislation in 2014 and signed into law in Pennsylvania in 2016, Pennsylvania’s ABLE program was finally launched just one year ago this month. This legislation gives individuals with disabilities the opportunity to save money in a way that has never before been available to them. For this reason, we are big proponents of ABLE, and we are partial to Pennsylvania’s ABLE program in particular. Here are just a few reasons why:
- For the first time ever, people who receive vital benefits with low asset limits, like SSI and Medical Assistance, are able to save significant amounts of money – up to $100,000 total ($15,000 per year) as compared to $2,000 total previously!
- The money in an ABLE account can be used for a wide variety of qualified expenses, including those that aren’t typically associated with a disability. Examples include rent, utilities, education, clothing, transportation and, of course, assistive technology.
- Unlike with a special needs trust, the beneficiary of an ABLE account can control these moneys completely on their own.
- In Pennsylvania, all deposits into an ABLE savings account are tax deductible.
- Also in Pennsylvania, when a beneficiary dies funds in the ABLE account pass to their estate as opposed to the state claiming that money.
Self-determination, consumer choice, and consumer control are values we hold dear. On this one-year anniversary of the launch of PA ABLE, if there’s anything worth noting about the program it’s this: ABLE provides just one more choice for people with disabilities to manage their finances, and thus to manage their lives. It provides an opportunity for personal autonomy and for independence. It is truly groundbreaking, and we feel so proud and fortunate that our state’s program is one of the strongest in the country.
One of the reasons we love ABLE is because assistive technology (AT) counts as a qualified expense! Learn more about how PATF can help you find funding for AT and learn how to manage your money.