California State Treasurer John Chiang, State Senator Bill Dodd, ABLE National Resource Center (ANRC) Director Miranda Kennedy and representatives of disability advocacy groups were present today at the launch of CalABLE — California’s new Achieving a Better Life Experience (ABLE) program. CalABLE will allow individuals with disabilities to open tax-advantaged accounts and contribute significantly more than the $2,000 asset limit under many public benefit programs. The event took place in Berkeley, the birthplace of the disability rights and independent living movement.
“We congratulate the state of California for their opening of the CalABLE program, which will offer individuals with disabilities and their families, who are California residents and others nationwide, the opportunity to save and set financial goals that advance their financial stability and independence. For eligible individuals with disabilities and their families, opening and contributing to an ABLE account represents a down payment on freedom,” stated Kennedy of the ANRC, which is managed by National Disability Institute.
“In a season in which so many celebrate life and our highest ideals, we are announcing the long overdue steps California is taking to help individuals with disabilities achieve a better life experience,” Treasurer Chiang, said. “CalABLE will empower people with disabilities to create their own safety net and build wealth because living with a disability should not equate to living a life of poverty.”
Before CalABLE, individuals could be penalized if they maintained more than $2,000 in savings, but CalABLE will end decades of restraints on how much money individuals with disabilities can save without affecting public benefits. Eligible individuals for CalABLE will be able to contribute $15,000 a year, up to a maximum of $529,000, into an ABLE account, while still maintaining benefits such as Medi-Cal and CalFresh. Those who wish to remain eligible for SSI can contribute up to $15,000 annually, to a maximum of $100,000, into an ABLE account without the funds counting as assets.
According to the U.S. Census Bureau, nearly seven percent of California’s population under the age of 65 has a disability, suggesting that hundreds of thousands of Californians could benefit from a CalABLE account to pay for the often significant costs of living with a disability.
While CalABLE mirrors the important aspects of the federal ABLE Act, the state legislature made significant improvements to make the program different than ABLE programs offered in other states. Last year, the legislature passed a bill that limits the state’s ability to seek repayment from a CalABLE account after an account holder’s death, for medical care expenses paid during the time they had the account. Additionally, the legislature passed a law that protects CalABLE accounts from money judgments.
The ABLE Act limits eligibility for ABLE accounts to individuals with significant disabilities with an age of onset of disability before turning 26 years of age. They must also either be eligible to receive benefits such as Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), or have a disability certification that includes a diagnosis by a physician. Generally, those with physical mobility issues, blindness, hearing impairment, some mental health diagnoses and more are eligible.
CalABLE account owners can select how to invest their money and easily schedule deposits and withdrawals right from the new website — www.CalABLE.ca.gov. A CalABLE account can also be managed by a parent, legal guardian, conservator or power of attorney, in the event an account owner is unable to manage their own account. Withdrawals are exempt from federal and state income tax, as long as the contributions are used for qualified disability expenses (QDEs).