With a program in place that allows individuals with disabilities to save money for disability-related expenses without losing their benefits, a bill sponsored by Assembly Democrat Daniel Benson seeks to incentivize eligible residents to participate in the program. The measure, referred to as the ‘New Jersey Disability Savings Act,’ was advanced by the Assembly Human Services Committee on Thursday.
The New Jersey Achieving a Better Life Experience (ABLE) Program is one of many throughout the nation that allows certain individuals with disabilities to save money for disability-related expenses in an ABLE account. Withdrawals and earnings in this account are not subject to taxation. Accountholders are allowed to save up to $100,000 at a time for disability-related expenses – including education, housing, transportation, and support services – without losing their eligibility for assistance programs such as Supplemental Security Income (SSI).
Under the bill (A-6111), individuals who are qualified to participate in this program would be encouraged to do so through several incentives. For residents making $200,000 or less, the State would match funds they deposit in a newly-opened ABLE account dollar-for-dollar, up to $1,000. The State would also provide a $500 contribution for every $25,000 saved up in an ABLE account.
“ABLE accounts offer people with disabilities the opportunity to save money and access it at a later date when critical expenses arise without penalizing them for their fiscal responsibility by revoking their disability benefits,” said Assemblyman Benson (D-Mercer, Middlesex). “The goal of this legislation is to encourage more eligible New Jerseyans to take advantage of the NJ ABLE program by making it even more beneficial to open and contribute to an account of their own. Incentivizing participation in this program is one important way we can empower residents with disabilities.”
Residents qualify for the NJ ABLE program if their disability was present before the age of 26 and if they either have a severe disability diagnosed by a physician, are legally blind, or are eligible for either Social Security Disability Insurance (SSDI) or SSI.
Although the person with the disability is the account owner, anyone can contribute funds to their account. The measure would make any contribution to an ABLE account fully deductible on the New Jersey State tax return. Contributions are not currently deductible.
Since these savings incentives would be subject to the State’s annual appropriations process, the bill authorizes the Department of Human Services to determine how these funds could be allocated in years when appropriations are unable to be met.