Halfpoint Images | Moment | Getty Images
The Americans with Disabilities Act was signed into law 33 years ago to protect people with disabilities from discrimination.
But disabled people still face major hurdles when it comes to constructing wealth.
To help make it easier for disabled individuals with lower incomes to save, Sen. Bob Casey, D-Pa., who serves as chairman of the Senate Special Committee on Aging, is introducing a latest proposal, called the ABLE MATCH Act. The laws would create a federal dollar-for-dollar match of up to $2,000 for brand spanking new and existing ABLE accounts for people who earn $28,000 or less per 12 months.
More from Personal Finance:
Long Covid has led to financial hardship for patients
Lower than 5% of housing is accessible to older, disabled Americans
Hybrid work is latest normal, as corporations rethink work habits
ABLE accounts, which were established with federal laws in 2014, allow qualifying individuals to set money aside for disability-related expenses without losing eligibility for federal programs comparable to Medicaid or Supplemental Security Income. The tax-advantaged accounts allow for tax-free withdrawals for qualifying expenses, while investment gains may grow on a tax-deferred basis.
The ABLE program has been a “lifeline for 1000’s of people with disabilities across the nation,” Casey said in a press release.
“Nonetheless, there are still too many people whose lives can be made easier by this system, but haven’t got sufficient funds to open an account,” Casey added.
Proposal would add a federal match
The ABLE MATCH Act would create a federal dollar-for-dollar match of up to $2,000 for people who make $28,000 or less, which might taper off for every dollar earned over that threshold.
That threshold can be adjusted for inflation and for heads of household and married couples.
The bill’s goal is to help boost enrollment in ABLE accounts for people with lower incomes who’ve disabilities.
The introduction of the proposal is a “really exciting development,” said Thomas Foley, executive director on the National Disability Institute.
There are still too many people whose lives can be made easier by this system, but haven’t got sufficient funds to open an account.
Sen. Bob Casey
Democratic senator from Pennsylvania
“That is providing an incentive to a bunch of people who have not been incentivized, and the truth is have been dis-incentivized to save for many years,” Foley said.
People with disabilities are twice as likely to live in poverty compared with people without disabilities, Foley said.
The National Disability Institute’s research has found that people with disabilities need to spend about $28,000 more per 12 months to live lifestyles equivalent to those of people without disabilities, he said.
Those extra costs come from needs comparable to accessible transportation, living closer to work, or the upkeep of a service dog, for instance.
Disabled individuals, particularly those that are younger, may find it difficult to save in an ABLE account due to a scarcity of disposable income, Foley said.
New laws passed last 12 months raised the age limit from 26 to 46 for the onset of a disability so as to take part in an ABLE account starting in 2026.
With that change, as many as 14 million people could also be eligible to take part in ABLE accounts, Foley said.