By John Celock
A Republican lawmaker in Kansas is seeking to have her state become one of the first to set up a savings account program for children with disabilities.
Legislation offered by Rep. Erin Davis (R-Olathe) would authorize state level tax free bank accounts as part of the federal Achieving a Better Life Experience Act that was signed by President Barack Obama last year. The federal ABLE Act allows for families to set up savings accounts for disabled children with up to $14,000 a year in deposits for future expenses, without a penalty for other programs.
“It provides the disabled individual the ability to have a little bit of self sufficiency for themselves,” Davis told The Celock Report.
The state House Children and Seniors Committee is scheduled to hold a hearing on the bill Thursday morning.
Under the terms of the federal legislation, families would be able to set up the accounts to cover future expenses related to the disability including education, transportation and health care. The funds in the account would not be used to block a disabled individual for qualifying for other programs including Medicare and Social Security disabled coverage. Both programs have limits on how much a person can have in their own name.
Under the terms of ABLE, the accounts could be used for children who encounter a disability by the age of 26. Autistic children would be among those covered by the accounts. Those with the accounts would need to meet Social Security disability standards.
Davis noted that the financial limits on Medicare and Social Security benefits have a long term impact on those with disabilities. She said the limits cause families to figure out long term financial planning for their children and set up children to be dependent on government programs.
“For the families it will provide a bit of piece of mind,” she said. “There is a far cry of making sure that your child could have no more than $2,000 of assets in their name and then having the government to take care of them. With ABLE families can make them self sufficient.”
Accounts would be supervised by state Treasurer Ron Estes (R), who has worked with Davis on the legislation. The program would be similar to existing 529 college savings programs that are administered by Estes’ office.
“The Kansas ABLE Savings Program would allow parents to save tax-free for current and future disability-related expenses, which in return will help secure their child’s future without jeopardizing the child’s eligibility for important benefits,” Estes said in a statement released last week.
Under the ABLE legislation, friends and family would be allowed to deposit up to $14,000 annually in the accounts for the expenses. Under terms of the federal law, if an ABLE account has over $100,000 in it, the beneficiary’s Social Security benefits would be suspended but they would retain eligibility and could return to the benefits long term.
Davis said that she is “cautiously optimistic” about the bill’s chances of passage. She said she believes the legislation will pass out of the Children and Seniors Committee and she’s been talking to House colleagues about its long term chances.
“It gives a little bit of hope and peace of mind for the parents and the family members, who have the long term and long range planning of caring for a loved one with special needs,” Davis said.