ABLE Act Could Help Disabled To Save

By Jazelle Hunt

NNPA Washington Correspondent

 WASHINGTON (NNPA) – As of 2006, more than 2.4 million African Americans receiving Social Security benefits are disabled, or are the spouses or children of disabled, retired, or deceased workers. A new piece of legislation is poised to help address the rising cost of disability, without jeopardizing existing social service benefits.

If enacted, the Achieving a Better Life Experience (ABLE) Act of 2013 will allow disabled Americans and their caregivers to set up secure, tax-free savings accounts for their disability-related expenses. Currently, Social Security Disability Insurance recipients cannot have more than $2,000 in assets, or they will lose their benefits. But savings up to $100,000 in an ABLE account will not be counted as income and assets against the disabled beneficiary, and therefore will not damage eligibility for Social Security, Medicaid, and other assistance.

The ABLE Act was first introduced but did not pass in 2009.  Rep. Crenshaw Ander Crenshaw (R-Fla.), author and co-sponsor of the bill, re-introduced it in February 2013. Today the bill has received bipartisan support from 358 representatives across all 50 states, including both the Senate party leaders. However, it still faces one hurdle: a financial assessment from the Congressional Budget Office to determine how the bill will affect the federal budget.

These state-based ABLE accounts are patterned after (and built as an extension of) 529 college savings plans, state- and school-based tax-advantaged savings plans that allow people to make investments that will mature and be put toward tuition and/or room and board. The funds accrued in these ABLE accounts can be put toward schooling for the beneficiary, housing expenses, transit expenses, financial services, and more.

“Other Americans enjoy financial-planning tools that allow them to save for college and retirement, yet our tax code does not provide people with disabilities with the same option,” said Congressman Crenshaw. “Enormous financial struggles that most of us cannot imagine face this population, and they deserve a level playing field when it comes to planning for education, housing, retirement, and more.”

African Americans make up 19 percent of all disabled-worker beneficiaries, according to the National Academy of Social Insurance, a nonpartisan nonprofit. According to 2009 data from the Social Security Agency, 31 percent of African Americans receiving Social Security checks are receiving disability insurance.

The disability rate is highest among African Americans who tend to become disabled as a result of health issues, or lifelong work in labor-intensive jobs – 24.3 percent as of 2009, according to the Disability Funders Network.

Chronic illness also precludes many Black Americans from the workforce. Until the Affordable Care Act, people with pre-existing and/or chronic conditions were usually denied insurance and were thus forced to pay for care out-of-pocket. Now largely insured, they too are dealing with significant healthcare debt.

In addition to having high disability rates, African Americans tend to have the least financial flexibility. African Americans, particularly women, also tend to work in low-wage jobs that do not offer benefits such as paid sick leave. Working- and middle-class Black families also tend to lack significant savings and wealth. So, when health emergencies strike and result in disability, it is easy for Black Americans to drown in the tide of related care, medical bills, and lost wages. This results in significant healthcare debt.

Those eligible for Medicaid may have less of a debt burden, but also live on modest incomes (by Affordable Care Act standards, that’s a little more than $26,000 per year for a family of three). African Americans make up 20 percent of all nonelderly Medicaid recipients as of 2012, according to the Kaiser Family Foundation. The ABLE Act makes it possible to save money to address disability-related debts and expenses, without threatening eligibility for Medicaid or other government assistance.

Beneficiaries can also write-off contributions to their own ABLE account, though some stipulations are involved. Additionally, caregivers and dependents of the disabled can establish and use the account funds, as long as the beneficiary of the funds is qualified with a disability.

“Support for passage of the ABLE Act is stronger than ever with only six bills in Congress having as much backing,” Crenshaw said. “Individuals with disabilities and their families deserve access to the same financial planning tools that other Americans use to map out their futures. A level playing field for them is something that we all can be proud of, and I’ll be continuing the fight for ABLE’s passage.”