Maddie Williams is four-years-old and has Down syndrome. She has a 6-year-old brother and their parents can put away money in a tax-advantaged 529 plan for his education. They can’t do the same for Maddie.
“Shortly after she was born, we learned that Maddie would never be allowed to have more than $2,000 in her name or she would lose valuable benefits that she qualifies for through Medicaid and Social Security Disability Insurance,” said Courtney Williams.
U.S. Sen. Bob Casey is pushing for passage of the ABLE Act. It would allow families of those with disabilities to set up tax-advantaged savings accounts to pay for long-term care. Being able to open a 529-style account would answer some questions raised by many families, such as Maddie’s, who worry about what will happen to their children when they are no longer able to care for them.
“How would she live independently? Could she work if she wanted to? Would she be allowed to take a promotion or seek a raise?” asked Williams. “Would she have the funds available if there were an emergency or she needed something? How can I save for her future the same way I save for her brother’s future?”
The majority of people with disabilities rely on Medicaid for all aspects of their health care.
“And there are asset limits, about $2,000 a year,” said Nancy Murray, with Ahieva, a provider of comprehensive services and supports for people with disabilities and their families. “So you can’t have more than $2,000 in a bank account, in a CD.”
Under the ABLE Act, if an account reaches $100,000, Supplemental Social Security Income benefits would be suspended; but an account holder would never lose Medicaid benefits, even if SSI benefits are suspended. SSI would be reinstated when the account falls below $100,000. Senator Casey said the bill will give families a little peace of mind.
“So they can plan and save and prepare for that individual’s future, that child that will become a young adult and will move on in their life, in the workforce,” Casey said. “No matter what they do in their future, they need to save and their families need to have that peace of mind.”
The ABLE Act, so far, has the support of 70 senators and 359 members of the House of Representatives. A vote in both houses can come as soon as May.