When Michael Carney told his daughter Olivia about her meeting with U.S. Sen. Bob Casey, the red-headed 6-year-old with Down Syndrome said she’d need a new dress.
A new outfit was no problem, but for Olivia to have the fulfilling and independent life her parents envision, they will have to put money away to pay for her care as an adult.
Speaking Monday to parents and advocates of the intellectually and developmentally disabled, Casey, D-Scranton, said he’s hopeful a measure to help families like the Carneys plan for the future will soon become law.
“We’re trying to put in place legislation that will provide at least some peace of mind to families when a son or a daughter is dealing with a disability,” Casey said.
The Achieving a Better Life Experience Act, or ABLE Act, would allow tax-free savings accounts, similar to programs that help families save for higher education, to pay for special need services.
While the law will not solve every problem that parents raising disabled children face, Casey, who has supported it for more than four years, said it will help them reach their full potential. And it will put those families, who currently pay tax on special needs trusts, on an equal footing with families who can save tax-free for college.
“If they can’t access the kind of services they need or want, that’s holding them back,” Casey said.
With broad bipartisan approval in the House and Senate, Casey said there is “no doubt” the bill will pass. The ABLE Act has support from 71 Senators and 360 members of the House.
Casey said he hopes to get it to the Senate floor for a vote this month without unrelated amendments that could erode support. He said Monday the biggest hurdle to getting a vote was obtaining an assessment of the bill’s fiscal impact from the Congressional Budget Office.
The bill would cost $122 million over the first four years, and $1.2 billion in its first decade, according to a report from the congressional Joint Committee on Taxation.
At The Arc of Lehigh and Northampton Counties, where Casey spoke Monday, Olivia Carney greeted the senator and asked him to take a seat next to her.
That gregarious nature is part of Olivia’s personality, which amazes her parents daily, her father said. She attends a regular kindergarten class and can count to 100, and Michael Carney said they want her life to be as normal as possible.
But saving for the time when parents can no longer provide for and support a disabled child requires parents to navigate a web of tax laws and social service regulations, said Carney, who is president of the Eastern Pennsylvania Down Syndrome Center.
Many parents start special needs trust funds for their disabled children, but those are subject to tax and can be claimed to repay the state for services if money remains after the child’s death, said Ron Sheppard, whose daughter Kelly Sheppard lives with intellectual disabilities that have left her unable to read or do simple arithmetic.
Saving directly in a disabled child’s name can make them ineligible for services under the supplemental security income program and Medicaid.
“We know the rules, but we’re trying to find ways to save,” said Sheppard, who is a former president of the local chapter of The Arc, which provides special needs services to intellectually and developmentally disabled people.
Under the ABLE Act, families could open investment accounts and contribute up to $13,000 a year before taxes under rules identical to 529 tax-free college tuition accounts, so named for the section of the IRS code that allows them.
As with 529 college accounts, money withdrawn from ABLE accounts would remain tax-free as long as it is spent on a qualifying expense such as education, housing, transportation, occupational training and support, assistive technology and health and wellness.
The money can also be rolled over to a traditional 529 account if the beneficiary is no longer considered disabled or to the ABLE or 529 account of a family member.
At 39, Kelly Sheppard works clearing tables in the employee restaurant at the Bethlehem Sands Casino, a job that gives her structure, a chance to interact with others and pay a few of her own bills.
Sheppard said he and his wife have saved, but want to ensure that their daughter can continue living her life independently for many years after they pass away.
If it becomes law, the ABLE Act will provide another tool for parents like the Carneys and the Sheppards to help their children thrive. Ron Sheppard’s only criticism is that it is long overdue, especially for older parents and disabled children.
“It’s going to take a lot of ($13,000 contributions) to catch up for our daughter,” he said.