August 1, 2014
A long-stagnant bill that would establish a new way for people with disabilities to save money without jeopardizing their government benefits is starting to make its way through Congress.
The legislation known as the Achieving a Better Life Experience, or ABLE, Act would allow people with disabilities to create special accounts where they could save up to $100,000 without risking eligibility for benefits like Social Security. What’s more, under the plan, individuals would not lose Medicaid coverage no matter how much money is deposited in the proposed accounts.
A U.S. Senate hearing Wednesday marked the first step in Congress for the bill which has been under consideration since 2006.
Under the proposal, individuals with disabilities would be able to create ABLE accounts at any financial institution. Modeled after the popular 529 college savings plans, funds deposited in ABLE accounts could be used to pay for education, health care, transportation, housing and other expenses. Interest earned on savings within the accounts would be tax-free.
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