Achieving a Better Life Experience for People With Disabilities (CalABLE)
In California, some people living with disabilities and their families rely on a variety of public benefits provided by state and federal governments to make ends meet. They include Supplemental Security Income (SSI), Medicaid, CalFresh, and other state health insurance programs.
These programs provide critically important services to the disabled but often do not allow individuals to save more than a total of $2,000, or earn more than $680 a month.
These restrictions are a disincentive for people with disabilities and their families to save for long-term needs, leaving them vulnerable to changes in health, living arrangements, unexpected emergencies, or simply the explosive growth in the cost of disabled care.
During the 2015-2016 Legislative Session, Senator Fran Pavley of Agoura Hills and Assemblymember Jacqui Irwin of Thousand Oaks co-authored and passed two bills, Senate Bill (SB) 324 and Assembly Bill (AB) 449, that will help ease financial challenges faced daily by people with disabilities. The new laws give Californians access to the federally recognized 529A – ABLE accounts.
An ABLE account is a tax-advantaged savings account that can be established for the benefit of qualified individuals with disabilities. Contributions to the account, currently limited to $14,000 per year, can be made by family, friends, or the beneficiary themselves. The account’s earnings are allowed to accumulate tax-free, and the withdrawals, provided they are applied to qualifying disability expenses, are tax-free. One of the biggest benefits of the ABLE account is that the savings held in the account, up to a current $100,000 limit, is not counted against the $2,000 limit on personal assets for individuals to qualify for public benefits.
The ABLE program, once operational, will open up life-improving opportunities for California’s disabled and their families in much the same way ScholarShare 529 plans opened educational opportunities to California’s students. The treasurer’s office has administered the ScholarShare savings program for the past 16 years.
The State Treasurer’s Office looks forward to working on this important program which will benefit some of California’s most worthy and vulnerable citizens.