Washington State to launch tax-advantage savings plan for people with disabilities
Achieving a Better Life Experience (ABLE) governing board announces program that could help an estimated 50,000 Washingtonians save for care-related expenses without losing disability benefits.
OLYMPIA, Wash. — The Washington State ABLE governing board announced that a new plan to help people with disabilities save for related care expenses without fear of disqualification from essential public benefits will launch by the end of this month. An estimated 50,000 Washingtonians could benefit from enrolling in an ABLE account.
ABLE is a tax-advantage savings plan that will allow people with disabilities and their families to save for disability-related expenses without losing crucial benefits, such as Medicaid and Supplemental Security Income (SSI). Currently, people are disqualified for those benefits when their assets reach $2,000. That will no longer be the case when funds are deposited into an ABLE account.
“With the launch of this historic savings program, Washington is opening the door to financial independence for persons with disabilities so they can pursue educational opportunities and lead a full life,” said Washington State Rep. Christine Kilduff (D-University Place), prime sponsor of the state’s ABLE legislation. “I’m proud of the work we’ve done to make this a reality.”
Through ABLE, people can set aside money for long-term savings, through several investment options, or for spending, through a secured option. Any earnings in an ABLE account are tax-free if used for qualified expenses including education, housing, assistive technology, personal support services and other disability-related expenses.
“The freedom to save your own money is so basic,” said Sen. Maureen Walsh (R-Walla Walla), a sponsor of the 2018 Washington ABLE legislation. “Unfortunately, for too long people with disabilities have been denied that basic opportunity. With the launch of the Washington State ABLE Savings Plan, parents will be able to save for their children’s future, and adults with disabilities can save for the things that will help them build the lives they choose.”
The Washington State Department of Commerce and BNY Mellon Sumday Administration are partners in developing and managing the web-based investment and saving program.
Strengthening communities by helping all Washingtonians
“Offering opportunities for Washingtonians of all abilities to thrive strengthens our communities,” said Commerce Director Brian Bonlender. “With ABLE savings plans, people who depend on life-saving assistance from Medicaid and SSI will have other options to meet their financial needs.”
Individuals who have a significant disability prior to age of 26 are eligible for an account. Eligibility is based on the Social Security Administration’s definition of disability, which includes physical, mental and intellectual or developmental disabilities.
Washington state residents who enroll in the ABLE program are eligible to waive the $35 annual account maintenance fee through June 30, 2019. Additionally, anyone can contribute to an ABLE account up to the annual gift tax exclusion of $15,000.
Frequently, people with disabilities who receive public benefits cannot receive gifts from family members for their birthdays or holidays because that gift puts the individual over the resource limit and terminates their benefits, explained Peter Tassoni, state administrator for the Washington State ABLE program. “ABLE accounts solve this dilemma,” he said.
The maximum account balance for ABLE plans in Washington is $500,000. However, once an account exceeds $100,000 it starts to count against the $2,000 asset limit for SSI. All other means-tested benefit programs in Washington state exclude the ABLE account balances regardless of the amount.
Strategic partner BNY Mellon Sumday Administration will host a website and mobile app to open and manage accounts. As program manager, they will offer customer service by representatives trained to work with people with disabilities, and keep account records for the plan.
Washingtonians can enroll in the Washington state ABLE program at the end of July by going to the website www.washingtonstateable.com and following the instructions on the site.
For more information about ABLE accounts in general, visit the ABLE National Resource Center’s website at www.ABLEnrc.org.
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Contacts:
Penny Thomas, Commerce Press Office, 206-256-6106
Peter Tassoni, Disability Workgroup Manager, 360-725-3125