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Achieving Better Life Experience (ABLE) Act*

Proposed measure would be similar to College 529 Plan;
Medicaid, Social Security benefits would remain intact.

Legislators will consider next year a proposal that would allow developmentally disabled residents to start tax-free savings accounts similar to the popular College 529 plan.

State representatives Jon Echols (R-Oklahoma City) and Jason Dunnington (D-Oklahoma City) are co-sponsoring the bill, which also would allow others to contribute to the account so Oklahoma’s disabled citizens can afford necessary medical care without forfeiting government benefits such as Social Security disability payments.

“Right now, if you’re disabled you can hardly own anything or else you lose those benefits,” Echols said.

For instance, if a person diagnosed with autism inherits assets from their parents, their disability payments could be stopped, Echols noted.

Congress passed the Achieving Better Life Experience (ABLE) Act years ago but Oklahoma has never followed suit. The federal ABLE Act guarantees each state, considering their unique tax codes, decides how they will develop the ABLE Act in their Section 529 savings programs.

“This would be a safety net for individuals with disabilities, those who truly can’t provide for themselves,” Echols said.

The proposed measure would ensure families have a choice in their loved ones’ financial well-being by allowing others to contribute up to $14,000 annually to the tax-sheltered saving account. There also would be minimal administrative costs to the state and it would encourage Oklahomans with disabilities to pursue employment, according to information provided by a coalition of groups focused on developmental disabilities.

“I think this will have broad bipartisan support. It makes common sense for the legislature to do something immediately for the benefit of the disabled community,” Echols said.

The lawmaker acknowledged the ABLE Act, if passed, would have a minimal impact on the state budget, which already is projected to have a $900 million shortfall for the next fiscal year. The tax-free accounts would cost the state about $160,000 in revenue if $4 million – with a projected 4 percent tax rate – were placed into the accounts during the first year.

“But the benefit to those families is being able to save money whereas right now we’re one of the few states that doesn’t offer this,” he said. “You need to remember this is private money being put into these saving accounts. Citizens are putting in their own money. It’s not the state or federal government.

This program would help the least and most vulnerable, which is something we want to do in society whether you’re Republican or Democrat.”

The importance of the ABLE Act centers, in part, on a provision that people with developmental disabilities cannot hold more than $2,000 in assets. This can discourage them from seeking suitable employment opportunities, Echols said. For those with disabilities who cannot work, public benefits are often their sole source of income, but they still remain in poverty, he said.

The ABLE Act is considered by those who work in the disabled community a humane, family centered method to save for the disabled while using the money for a variety of acceptable expenses.

People must have been diagnosed with a disability before age 26 or receive Social Security Income, Social Security Disability Income or a disability certification under IRS rules to quality for the ABLE Act.

Oklahoma’s disabled citizens have been impacted by a recent 3 percent cut in Medicaid services, Echols said.

“We need to get creative in how we can take care of these citizens,” he said.

The ABLE Act would allow disabled people and their family and friends to contribute money, up to $100,000 over multiple years, without Social Security Income (SSI) being temporarily suspended. In the event the fund exceeds $100,000, SSI would be halted until the fund balance drops below that figure.

The money can be used for approved expenses such as housing, education, transportation, employment support as well as costs associated with health care, well-being and legal services.

Groups that have endorsed Echols’ proposal include the Oklahoma Developmental Disabilities Council, Oklahoma Autism Network, Down Syndrome Association of Central Oklahoma, Parent Advocacy Corps the Oklahoma Community of Practice for Supporting Families and the Department of Human Services Citizens Advisory Panel on Disability.

TARC also has endorsed Rep. Echol’s proposal.

*Source: Tim Farley, Red Dirt Report