Fighting for the Right to Save Money
Imagine being caught between a rock and a hard place: you have a significant disability that impairs your ability to work full-time or in some industries and may come with substantial medical expenses, so you need government benefits to support yourself. However, if you start working part-time or you develop other creative methods of bringing in income, your benefits are cut correspondingly, keeping you in effective stasis. Meanwhile, you can’t have more than $2,000 in assets. Disabled people in the United States don’t have to imagine this scenario, because this form of enforced poverty is a way of life for them: the structure of government benefits programs makes it extremely difficult to work, save money, accept inheritances, or make investments while disabled.
On the surface, tight regulations make sense; people who are capable of supporting themselves without help shouldn’t be getting the benefits that other people need. However, the restrictions are so tight that they’re actively harming the large number of disabled people who occupy a betweenspace, capable of some work and interested in setting by savings and other assets as a form of security, but unable to do so because they don’t want to risk their benefits.
The disability community has lobbied about this issue for decades, arguing that the limitations on benefits unfairly restrict disabled people, and Congress appears like it’s finally decided to listen and take action. Lawmakers are taking up the Achieving a Better Life Experience (ABLE) Act, which would allow people to deposit up to $100,000 in a tax-free savings account without jeopardizing their benefits, including Medicaid, critical for many disabled people with extensive medical expenses.
Under the ABLE Act, people would be able to spend the money from their savings accounts on education, housing, transportation and other specific expenses. It has bipartisan backing in both the House and the Senate, along with support from a large number of disability rights groups who see this legislation as a path to financial independence and security for millions of disabled people across the country. Given that almost 28% of disabled people were living in poverty in 2010, it’s clear that the government needs to come up with a functional method of supporting its disabled population and lifting disabled people out of poverty, without creating loopholes that could be exploited by people who don’t need benefits.
The benefits of the ABLE Act could be huge for disabled people. In just one example, disabled people can end up in financially exploitative relationships with caregivers or romantic partners that are difficult to extricate themselves from because they have no savings — with ABLE, they could draw on their savings to get out of a financially, or physically, abusive environment, using the money to rent a new home or apartment. Similarly, disabled people could afford better transit options, healthier food and so much more with the money they saved, exercising the same consumer choice that non disabled people have. These savings accounts would also allow people to plan for the future; a disabled person who knows her impairment will get worse over time could save up for a time when she’ll need more support, thus actually saving the government money by planning ahead, something she can’t do now.
If the ABLE Act passes, it will be a major step in the path to improving access to financial empowerment and independence for disabled people, and it could help to address the shocking poverty rate in the disability community. People will no longer have to choose between paying work and their benefits, instead receiving the help they need, while also helping themselves.
Photo credit: Rafael J M Sousa.