ABLE Accounts Bills in U.S. House and Senate

March 24, 2010

Hi all,

Awhile ago Sweeney, me and some others were talking about this idea, and

as with so many things, of course someone else has already had the idea, and for

a long time apparently! Please see below for information about the ABLE

account which they are describing as similar to a college 529. If or

others from the list have additional information to share with us on the

relative merits of this idea, please chime in.

Gee, am I supposed to be posting this over on Pam's new website now instead of

here on IPADD? I'm sticking with this for now but Pam you Ellen and Gordon can

take this on if you'd like.

Thanks.

Laurie

Summary of the ABLE Accounts ACT of 2009:

S. 493 - Sponsored by Senator Casey (D-PA), Senator Orrin Hatch (R-UT,

and Senator Dodd (D-CT)

H.R. 1205 - Sponsored by Congressman Ander Crenshaw (R-FL)

Original Cosponsors:

S. 493 - Senators Burr (R-NC), Kennedy (D-MA), and Sam Brownback

(R-KS)

H.R. 1205 - Congressmen Kennedy (D-RI), Mc Rodgers (R-WA),

and Kendrick Meek (D-FL)

a.. The ABLE Account: An ABLE account is a trust created or organized in the

United States exclusively for the purpose of paying qualified disability

expenses of an individual with a disability who is the designated beneficiary of

the trust. An ABLE account must be designated as an ABLE account at the time it

is created or organized.

b.. Contributions: Contributions to an ABLE account must generally be in cash.

Contributions cannot exceed $500,000 in the aggregate and cannot be made after

the beneficiary turns 65.

c.. Qualified beneficiaries: There are two groups of qualified beneficiaries:

a.. (1) Individuals who are receiving supplemental security income (SSI)

benefits due to blindness or disability, or those receiving Social Security

disability (SSD) benefits; and

b.. (2) Individuals who would be eligible to receive SSI or SSD benefits if

their income and assets and their ability to perform substantial gainful

activity were not taken into account. These individuals need not have been

determined blind or disabled by the Social Security Administration.

d.. Tax treatment of accounts: ABLE accounts are generally exempt from

taxation. Also, up to $2,000 in contributions to an ABLE account may be

deductible each year. Deductions can be claimed as follows:

a.. Joint return filers can claim a deduction only if their modified

adjusted gross income is less than $70,000; the deduction begins to phase out at

$60,000

b.. In the case of heads of household, the limits are $52,500 and $45,000

c.. In any other case, the limits are $35,000 and $30,000

d.. Beginning in 2011, all the amounts will be adjusted for inflation

e.. Allowable expenses: Qualified disability expenses are expenses (1) made

for the benefit of an individual with a disability who is the designated

beneficiary of the trust and (2) approved under regulations. These expenses

include costs associated with education, housing, transportation, employment

support, health, prevention and wellness, life necessities, assistive technology

and personal support services.

f.. Effect on federal benefits: Account funds are disregarded for purposes of

certain other means-tested federal programs, such as Medicaid, food stamps, and

federal housing assistance.

g.. Upon the death of a qualified beneficiary, Medicaid will recover from

unused account funds that are not placed in an ABLE account or special needs

trust of another beneficiary an amount equal to the total medical assistance

paid.

March 24, 2010