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COMMENTARY | Americans with disabilities should consider depositing stimulus payments they receive from the federal government into ABLE savings accounts that maximize their impact.
Living with a disability can come with significant financial challenges that make it difficult to cover daily expenses and to save money for the future. Until recently, federal laws surrounding public benefits penalized people with disabilities who had over $2,000 in a regular savings account by disqualifying them from being considered eligible for supplemental public benefits. This, in effect, discouraged saving and increased financial instability among individuals who already have significantly higher costs of living.
Then, in 2014, Congress passed the Achieving a Better Life Experience (ABLE) Act, which enabled eligible individuals living with a disability to open tax-advantaged savings accounts without the risk of losing important public assistance. Funds in ABLE accounts can be used to pay for any disability-related expenses—from healthcare to education, transportation, adaptive equipment, assistive technology, personal support services and more.
Since many Americans with disabilities and their families received stimulus checks, I urge them to take the opportunity to deposit those funds into an ABLE account. Since stimulus payments aren’t social security benefits, they are exempt from following the social security rules that typically require beneficiaries’ pay expenses—like food, shelter, medical and dental care—in a particular order.
By depositing stimulus payments into an ABLE account, individuals with disabilities can guarantee their stimulus payments aren’t mixed with other personal funds that could count towards resource limitations for certain federal benefits. Stimulus checks deposited into ABLE accounts are treated with the same benefits protection as other money in ABLE accounts. This gives disabled Americans and their families time to save and spend money for things that may not be covered by benefits without risking eligibility. This is a great (and easy) way to protect people’s money and independence in both the short and long term.
When it comes to ABLE accounts, one of the most important steps is simply opening the account. With a stimulus check in hand, this may be an ideal time to get started. My state’s program, CalABLE, is one of more than 42 programs across the country. As the chair of the National Association of State Treasurers’ ABLE Committee, I know that each one of these plans is working hard to help individuals open new accounts during this difficult time. While the federal government won’t directly deposit stimulus funds into a new ABLE account, ABLE programs are ready to help individuals who don’t have an ABLE account open one and transfer the funds.
The coronavirus pandemic has deeply underscored the importance of financial stability and flexibility. As unemployment levels across the country continue to rise, it’s more important than ever that Americans with disabilities are able to save—and an ABLE account is one of the strongest tools at their disposal. As we continue discussing the best ways to use stimulus checks, those with disabilities should considering taking the life changing step of opening an ABLE account.
Fiona Ma is California’s 34th State Treasurer, elected in November of 2018. In addition to her role as state Treasurer, she serves as Chair of the National Association of State Treasurer’s ABLE Committee.