CalABLE Introduces Greater Financial Security for Those with Disabilities Throughout California

By State Treasurer John Chiang

The passing of former President George H.W. Bush has put a renewed spotlight on one of his greatest achievements — the signing of the Americans with Disabilities Act (ADA) into law, which established a new era of access and inclusion for those living with disabilities. But while the ADA was a monumental achievement, many Americans living with disabilities still face financial hardships today. Public benefits, like Supplemental Security Income (SSI) and Medicaid help, but these benefits alone can’t possibly cover the additional costs of living with a disability.

Enter CalABLE — California’s Achieving a Better Life Experience (ABLE) program — which allows Californians with disabilities to create tax-advantaged savings accounts and save for the future, without jeopardizing critical public benefits. Mirrored after the 2014 federal Stephen Beck Jr. Achieving a Better Life Experience (ABLE) Act, CalABLE will launch later next week and will provide individuals with disabilities, the ability to save significantly more than the $2,000 they were previously allowed to save under asset limitation rules for government programs, like SSI. Individuals will now be able to deposit $15,000 a year — up to a maximum of $529,000 into an ABLE account and still maintain such benefits as Medi-Cal and CalFresh. Those who wish to remain eligible for SSI can save the annual $15,000, but can only deposit up to $100,000 into their ABLE account.

According to the U.S. Census Bureau, almost seven percent of our state’s population are individuals with disabilities who are under the age of 65.[1] This gives you some idea of the number of people who can be helped by this extremely important shift in public policy.

Anyone can contribute to an individual’s ABLE account — family, friends, or the beneficiary themselves — and those funds won’t be counted as income for the account owner. With CalABLE, we’ve also simplified the contribution process through the program’s “e-gifting” feature so an account holder can solicit requests for funds to cover the costs of items that enhance their independence and quality of life.

CalABLE was designed to ensure and safeguard the independence of account holders; the individual with the disability is always both the beneficiary and the account owner. That person manages their own funds or, if necessary, a parent, legal guardian, conservator, or Power of Attorney can be established to serve as an Authorized Legal Representative on their behalf.

Best of all, account earnings accumulate tax-free, and withdrawals are also tax-free, if the money is spent on qualified disability expenses — which includes everything from education, to housing, to transportation, and health care expenses.

So who is eligible for CalABLE?

Individuals whose disability onset before the age of 26 are eligible for CalABLE. In addition, they must also meet the eligibility criteria for disability benefits, as established by SSI or SSDI, or they must certify their eligibility through a doctor’s note confirming their disability and age of onset.

While CalABLE mirrors the important aspects of the federal ABLE Act, we’ve made significant improvements that make our program different than ABLE programs offered in other states.

Last year, the California legislature passed a bill that removes what is commonly called the “Medicaid clawback.” This 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.[2]

Additionally, the legislature passed a law that protects CalABLE accounts from money judgements. These consumer protections make CalABLE an even stronger program for Californians with disabilities.

As California’s State Treasurer and chair of the CalABLE Board — but more importantly, as a proud Californian — I believe this program is a statement of our values as human beings. Living with a disability should not leave one living on the brink of poverty. CalABLE affirms our commitment to equity and equality, and will finally usher in a new level of financial inclusion and security for Californians across our state.

About CalABLE

For more information on CalABLE email calable@treasurer.ca.gov or call 916–653–1728. You can also connect with CalABLE on social media at www.facebook.com/CalABLE and @CalABLE_Board. CalABLE enrollment begins December 18th at: www.CalABLE.ca.gov.

The following article is based on remarks delivered by California State Treasurer John Chiang. To learn more about CalABLE click here .

[1] Quick Facts, California, Health, With a disability, under age 65 years, percent, 2012–2016, U.S. Census

[2] SB 218 (Dodd), The Qualified ABLE Program: tax advantaged savings accounts, Enacted State Legislation, 2017. http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB218

California State Treasurer's Office

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