The Achieving a Better Life Experience (ABLE) Act will allow people with disabilities and their families and caretakers to create a tax-exempt savings account. The money in the savings account would not be considered an asset, allowing people with disabilities and their caretakers to save for emergencies without losing access to benefits. The House Ways and Means Committee has recently voted to move the bill forward.
asset limit reform
Tax refund time is an important opportunity to build savings, particularly for low-wealth households who receive the Earned Income Tax Credit (EITC). The Earned Income Tax Credit for lower-wage workers ranged from $457 to $5,657, based on household size, in 2009. The IRS form 8888 allows tax filers to purchase savings bonds up to $5,000.
Perversely, some public benefits programs actually discourage low-wealth people from saving money that could help them through an emergency or have a comfortable retirement.
Among the many remaining barriers are public policies that make it difficult for people with disabilities to work and acquire the earnings necessary to build assets.
These are the kind of sobering statistics that experts presented to more than 100 representatives from community, research, financial, regulatory, and government groups at “Beyond Foreclosures: The Impact of the Financial Crisis on the Wealth Gap and Economic Opportunity.” Indeed, a staggering number of consumers lack sufficient access to banking services that would help them build wealth, do not have opportunities to build a positive credit history, and must resort to the costly and stigmatizing process of bankruptcy.
One recent proposal, introduced by Congresswoman Tsongas (D-MA) and Congressman Petri (R-WI), promises to remove the savings disincentive. Currently, potential SSI recipients are disqualified if they have as little as $2,000 in savings for an individual or $3,000 for a couple and are required to spend down retirement savings. The SSI Savers Act of 2010 (H.R.