Achieving a Better Life Experience (ABLE) Act and the National Defense Authorization Act of 2015

Posted on: January 30th, 2015

Two Legislative Actions Pass in December 2014

C & P - Tuesday, December 23, 2014

Congress passed two bills with great significance for special needs families before concluding their December 2014 session:

The first, the Achieving a Better Life Experience (ABLE) Act, helps people with disabilities save for health-care costs, housing, lifelong education, and other needs.

Under prior law, a child diagnosed with a disability could not have assets worth more than $2,000 or earn more than $680 per month without forfeiting eligibility for needs-based government programs like Medicaid and Supplemental Social Security (SSI).

The ABLE Act authorizes a tax-free savings account up to $100,000 to pay for disability-related expenses. There are some significant limitations: eligibility is limited to those 26 years of age and younger; there's a $14,000 per year cap on contributions, and each person can have only one account. The program will be managed by the individual states, along the same lines as the college savings 529 plans.

We have not yet heard how Virginia, Maryland and the District plan to implement and administer these plans, but we will be keeping a close eye on those developments.

The second piece of legislation was passed as part of the National Defense Authorization Act of 2015, and it allows military retirees to name special needs trusts as beneficiaries of their Survivor Benefit Plans (SBP).  This means that military families are now able to direct SBPs to their children with special needs without compromising the children's eligibility for government disability and medical benefits, as long as the child meets the established criteria for disability (incapable of self-support as a result of a physical or mental disability, provided such disability occurred prior to the age of 22). 

Look for a special Q&A event on these topics in 2015 for our clients once Maryland, Virginia and the District decide how they will implement these plans. 


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