The Pennsylvania Achieving a Better Life Experience (ABLE) Act is designed to help those with disabilities, and their families, save money for the future without jeopardizing their eligibility for important social programs.
The legislation, which Pennsylvania Governor Tom Wolf signed into law in April, allows the creation of tax-exempt savings accounts for people with disabilities and removes a long-standing barrier that has kept disabled Americans from participating in the workforce. Let us consider how the ABLE Act will affect disabled Pennsylvania residents, including those injured from medical malpractice and birth injuries such as cerebral palsy.
What is the Pennsylvania ABLE Act and What Does It Do?
As summarized by the Pennsylvania governor’s office, the Pennsylvania ABLE act will allow people with disabilities and their families to:
- Set up tax-exempt savings accounts for people with qualifying disabilities;
- Save up to $14,000 per year;
- Save up to a total of $100,000;
- Grow savings without tax penalties;
- Use the savings to pay for a wide range of disability-related expenses;
- Withdraw money from the savings accounts without state or federal income tax penalties when used for disability-related expenses;
- Save money exempt from inheritance tax; and
- Save money under the ABLE act that does not count towards eligibility for Supplemental Security Income (SSI) benefits, and other Social Security and federal programs that are means-tested.
The full legislation can be found in Pennsylvania Senate Bill No. 879, Session of 2015.
Prior to passage of the ABLE act, a financial cap limited the amount that persons with disabilities could have in the bank and still qualify for disability assistance. If families were to save more than $2,000 for a disabled child’s future, they risked losing critical benefits.
The ABLE act will allow more individuals with disabilities to work full-time and save money without jeopardizing their disability benefits.
Watch this video published by ABC 16 WNEP regarding how the ABLE Act helps people with disabilities save.
Who Qualifies for a PA ABLE Account?
According to provisions of the PA ABLE savings program, an eligible individual is anyone who meets criteria named under section 529(e)(1) of the Internal Revenue Code. the federal government previously passed a national ABLE Act. The Pennsylvania version mirrors the federal law. Per section 529(e)(1) of the Internal Revenue Code, a person is eligible for an ABLE account if:
- The individual became disabled or blind prior to age 26, and meets the definition of a disabled person as named by the Social Security Act; or
- A certification for disability is filed for the taxable year.
A disability certification may be granted in the event that a disabled individual has a “medically determinable physical or mental impairment” causing severe and marked impairment, and which lasts for at least 12 months or is expected to result in death, or is blind; and if the disability or blindness occurred before the age of 26.
ABLE accounts are designed to help parents save for their disabled children’s future, including savings for medical expenses. The ABLE accounts closely mirror college tuition savings accounts.
The cause of the disability is not a factor in determining eligibility for the account. It is the extent of disability and age that matters most. As such, parents of children who have been harmed from birth injuries caused by medical malpractice may benefit from establishing a Pennsylvania ABLE savings accounts.
How to Sign Up for ABLE
If your child has a qualifying disability that meets the criteria listed above, your family may qualify and be able to open a tax-free ABLE account in which you can save up to $100,000 to help provide for your child’s future. To sign up, use The Achieving a Better Life Experience Act sign up link.
The Importance of Federal Assistance for Disabled Persons
Living with a disability, or having a disabled child, can be a very challenging experience. For many, their ability to work and earn a gainful income is limited due to their disability or the disability of their child. Federal programs, such as SSI, provide families with the economic assistance that they need. Most federal benefits programs are income and resources-based, meaning that families – prior to the passage of the legislation – were forced to choose between working and earning money, or qualifying for disability benefits that were needed.
Families will be able to save money for their children to pay for necessary medical expenses and other disability-related costs sans penalties.
Federal assistance programs and Pennsylvania programs for disabled persons are not the only things that are important and necessary for families with children with disabilities. If you are the parent of a special needs child, having community resources and emotional support are critical as well. Our Caregiver’s Corner is designed to provide a comprehensive listing of support groups, organizations, services, opportunities, and more for parents and caregivers of children living with disabilities.
Meet with Our Experienced Philadelphia Attorneys Today
If you are the parent of a child who suffered a disability as a result of a birth injury or medical malpractice, we are committed to helping your family obtain the compensation you need to move forward. Not only do we want to assist you in understanding the Pennsylvania ABLE savings program and other disability programs for which your family may qualify, but we also want to aid you in recovering the financial compensation that you are entitled to based on a hospital’s or physician’s negligence that led to your child’s harm. To learn more about your right to file a civil action and the types of damages that you may be able to seek, contact our experienced Philadelphia medical malpractice attorneys today by calling us or filling out our online contact form.