Bipartisan measure would provide financial security for individuals with disabilities
WASHINGTON, DC-U.S. Senators Bob Casey (D-PA) and Orrin Hatch (R-Utah) introduced bipartisan legislation to allow individuals with disabilities and their families to create tax-exempt savings accounts similar to Individual Retirement Accounts (IRA) and 529 College Savings accounts to save for the added expenses they will experience over their lifetimes.
“Parents of children with disabilities face struggles on a daily basis that we can’t even begin to imagine,” said Casey. “This legislation will help make it easier for those families to save for the future and will provide them with the financial peace of mind they deserve.”
“Families with disabled children have unique challenges in providing a secure future for their children.” Hatch said. “We need to make sure that parents are able to save for the financial and social well being of their children. This bill is a modest measure that will help these families to do so.”
The Financial Security Accounts for Individuals with Disabilities Act of 2008 will allow individuals with disabilities and their families to save money and cover expenses such as education, medical and dental care, community support services, employment training and support, moving and assistive technology, housing, and transportation.
Under current law, saving for the additional expenses incurred over their lifetime, many individuals with disabilities are forced to divest of all of their assets in order to qualify for health care under Medicaid. This requirement effectively impoverishes these individuals and prevents them and their families from building and using savings to meet expenses.
Like IRAs and 529 College Savings Accounts, the Financial Security Accounts for Individuals with Disabilities (FSAID) accounts would provide a tax incentive for family members to contribute to the savings accounts. FSAID accounts would be available to individuals eligible to receive supplemental security income benefits under Title XVI of the Social Security Act.
Anyone may contribute to an FSA and rollovers from other accounts would be allowed without penalty; however, contributions to these accounts are capped at $500,000. Under the proposal, the principle in the account would accrue interest tax-free during the life of the beneficiary. When distributions are made to the beneficiary for qualified expenses, the distributions are excludable from the gross income of the beneficiary. In the event an individual becomes disabled later in life, funds from certain existing qualified accounts, such as 529s, can be transferred to an FSA.
The legislation has been endorsed by the National Down Syndrome Society (NDSS), National Down Syndrome Congress (NDSC) and the National Fragile X Foundation. This bill was introduced in the house by Congressman Ander Crenshaw (R-FL).
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“Parents of children with disabilities face struggles on a daily basis that we can’t even begin to imagine,” said Casey. “This legislation will help make it easier for those families to save for the future and will provide them with the financial peace of mind they deserve.”
“Families with disabled children have unique challenges in providing a secure future for their children.” Hatch said. “We need to make sure that parents are able to save for the financial and social well being of their children. This bill is a modest measure that will help these families to do so.”
The Financial Security Accounts for Individuals with Disabilities Act of 2008 will allow individuals with disabilities and their families to save money and cover expenses such as education, medical and dental care, community support services, employment training and support, moving and assistive technology, housing, and transportation.
Under current law, saving for the additional expenses incurred over their lifetime, many individuals with disabilities are forced to divest of all of their assets in order to qualify for health care under Medicaid. This requirement effectively impoverishes these individuals and prevents them and their families from building and using savings to meet expenses.
Like IRAs and 529 College Savings Accounts, the Financial Security Accounts for Individuals with Disabilities (FSAID) accounts would provide a tax incentive for family members to contribute to the savings accounts. FSAID accounts would be available to individuals eligible to receive supplemental security income benefits under Title XVI of the Social Security Act.
Anyone may contribute to an FSA and rollovers from other accounts would be allowed without penalty; however, contributions to these accounts are capped at $500,000. Under the proposal, the principle in the account would accrue interest tax-free during the life of the beneficiary. When distributions are made to the beneficiary for qualified expenses, the distributions are excludable from the gross income of the beneficiary. In the event an individual becomes disabled later in life, funds from certain existing qualified accounts, such as 529s, can be transferred to an FSA.
The legislation has been endorsed by the National Down Syndrome Society (NDSS), National Down Syndrome Congress (NDSC) and the National Fragile X Foundation. This bill was introduced in the house by Congressman Ander Crenshaw (R-FL).
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