PITTSBURG — A federal savings plan could help individuals with disabilities save money.
People who are disabled and who qualify for disability benefits under Medicare or Supplemental Security Income could lose their Social Security benefits and medical card if they were to accumulate over $2,000 in their personal accounts.
A savings plan called Achieving a Better Life Experience, also known as an ABLE Account was established in 2014 under federal tax law and is similar to college savings plans.
Governor Jeff Colyer signed an enhancement of the ABLE Account, the House Bill No. 2067 on May 17 which allows individuals with disabilities, “to receive a Kansas income tax deduction for their contribution in line with the Federal Tax Cuts and Jobs Act of 2017, and reduces the circumstances under which the state Medicaid clawback provision would apply to the accounts,” a release said.
According to the ABLE National Resource Center website, the accounts are “tax-advantaged savings accounts for individuals with disabilities and their families … the beneficiary of the account is the account owner, and income earned by the accounts will not be taxed.”
The individual on the account may have contributions by any person, but “must be made using post-taxed dollars and will not be tax deductible for purposes of federal taxes, however some states may allow for state income tax deductions for contribution made to an ABLE account,” the National Resource Center said.
To keep these individual’s accounts under $2,000 they — or their guardian or representative payee — must purchase items, such as new beds and other things requested by the individual.
In other words, “to remain eligible for these public benefits, an individual must remain poor,” the ABLE National Resource Center website read.
New Hope Consumer Financial Director Samantha Piatt, said sometimes, these items are not needed and could be better off used for times they really need something, for example a new wheelchair or items the person wishes to have.
“What it allows us to be able to do is to save money for those individuals,” Piatt said. “If they are on medicaid and medicare it may not be time to get a new wheelchair, but when their wheelchair breaks, how do they come up with funds to replace that wheelchair if they are only making 750 a month — top end.”
Mosaic Executive Director Leslie Lackamp agreed and said that the money could be better saved for things they need and are not covered by their medical care, such as back braces.
Lackamp said the individuals also have a right to save money towards goals like going on vacation to Disneyland.
People with disabilities, specifically affiliated with organizations such as New Hope and Mosaic, can receive benefits from families, such as railroad pensions from their parents.
Both Lackamp and Piatt said out of their organizations there are only a handful of individuals who have enough money coming in to utilize the program, however, the program is still important for those who can benefit from it.
To learn more about the program people can visit the ABLE National Resource Center website at https://bit.ly/2biqbAQ
— Stephanie Potter is a staff writer at the Morning Sun. She can be emailed at email@example.com or follow her on Twitter @PittStephP and Instagram @stephanie_morningsun.