U.S. Congress approves ABLE Act, limits onset of Disability to age 26

Associated Press | By HOPE YEN | Dec 16, 2014

WASHINGTON (AP) - Congress gave final approval Tuesday to the most sweeping legislation to help the disabled in a quarter century, allowing Americans with disabilities to open tax-free bank accounts to pay for needs such as education, housing and health care.

The move paves the way for creation of the accounts beginning next year for as many as 54 million disabled people and their families.

"This is a monumental, landmark bill," said Sara Hart Weir, interim president of the National Down Syndrome Society. "This bill will change the way that families can save for all their children and adults with Down syndrome and will ease the unnecessary burdens that are placed on families - all while allowing people with Down syndrome to work and save for the future."

The Democratic-led Senate passed the measure on a 76-16 vote after it was attached to a bill extending dozens of tax breaks for individuals and businesses until the end of the year. Earlier this month, the GOP-controlled House overwhelmingly approved the measure, having garnered 85 percent of Congress as co-sponsors.

The bill, called the Achieving a Better Life Experience Act, now goes to President Barack Obama for his signature.

Modeled after tax-free college savings accounts, the ABLE bill would amend the federal tax code to allow states to establish the program.

To qualify, a person would have to be diagnosed by age 26 with a disability that results in "marked and severe functional limitations"; those who are already receiving Social Security disability benefits would also qualify. Families would be able to set up tax-free accounts at financial institutions, depositing up to $14,000 annually to pay for long-term needs such as education, transportation and health care.

The contributions would be in after-tax dollars but earnings would grow tax-free.

The ABLE accounts would be able to accrue up to $100,000 in savings without the person losing eligibility for government aid such as Social Security; currently, the asset limit is $2,000. Medicaid coverage would continue no matter how much money is deposited in the accounts.

It would be the first major legislation for the disabled since the 1990 Americans With Disabilities Act.

The measure was sponsored by Sens. Bob Casey, D-Pa., and Richard Burr, R-N.C.

Many lawmakers had insisted on cuts or revenue increases to offset the measure's $2 billion price tag over 10 years; the bill's sponsors found the savings in part by increasing the amount of levies on property for tax-delinquent Medicare providers and suppliers; cutting Medicare funding for "vacuum erection systems"; and making technical adjustments to cap worker's compensation.

The conservative Heritage Foundation criticized the bill as potentially promoting fraud and abuse, especially when it came to hard-to-diagnose mental disabilities.

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