Following a unanimous vote in both the House and Senate earlier this month, Governor Pat McCrory signed the Achieving a Better Life Experience Act into law this past Tuesday.
The “ABLE Act” (House Bill 556) allows disabled individuals in North Carolina and their families to accumulate tax-free contributions up to $14,000 a year, and savings up to $100,000 without jeopardizing that person’s participation in any federal disability entitlement programs.
House Bill 556 will give individuals with disabilities the ability to establish accounts to save for future essential expenses, such as medical and dental care, education, employment training, assistive technology, housing, and transportation. Funds in ABLE accounts will not count against the financial eligibility standards of Medicaid, Social Security Disability Insurance (SSDI) and other federal means-tested programs designed to support qualified disabled individuals.
A ‘means test’ is a method for determining whether someone qualifies for a financial-assistance program based upon whether the individual or family possesses the means to do without that help. Means-tested programs are available only to persons with very few resources in the form of income or assets. For example, to meet the Supplemental Security Income (SSI) requirements, you must have less than $2,000 in assets (or $3,000 for a couple) and a very limited income.
Last year, the 113th United States Congress enacted the federal The Stephen Beck, Jr., Achieving a Better Life Experience Act (ABLE) Act (H.R. 647) which sets out the rules and guidelines for establishing Section 529A ABLE accounts in the states. Without these accounts, many people with disabilities have very limited avenues to save and allow for further independence. In December 2014, the law was renamed in honor of Stephen Beck after his death. Mr. Beck was the parent of a daughter with Down syndrome and was an integral part of the ABLE Act leadership team over the last eight years.
The bipartisan federal legislation was sponsored by North Carolina Senator Richard Burr and Pennsylvania Senator Bob Casey.
The federal ABLE Act program authorizes state-sponsored tax-exempt savings programs for disability-related expenses, and individual states need to enact their own ABLE legislation before their residents can access the new tax benefit. House Bill 556 is the local enabling legislation that puts the federal program into effect in our state.
“ABLE accounts are a vital tool for families to ensure their loved ones get the support, services and opportunities to lead a full and productive life,” said Senator Burr at the official bill signing ceremony on August 11. “I want to thank Governor McCrory and the General Assembly for making ABLE accounts a reality in North Carolina.”
North Carolina joins 29 other states in allowing individuals and families dealing with disabilities the opportunity to save and provide the necessary care families need.
“The ABLE Act will allow countless North Carolinians with disabilities reach their full potential by providing services as well as educational opportunities so they can help build a stronger and more compassionate North Carolina for us all,” said Governor McCrory upon signing the bill into law.
For a thorough explanation of how the ABLE Program works, please read “Achieving a Better Life Experience (ABLE) Act” authored by The Arc, the nation’s leading advocate for all people with intellectual and developmental disabilities and their families. The organization has nearly 700 state and local chapters nationwide and encompasses all ages and more than 100 different diagnoses including autism, Down syndrome, Fragile X syndrome, and various other developmental disabilities.