By Andrew Friedson
For more than two decades, disability rights advocates have pushed for tax-preferred savings accounts to allow individuals with disabilities to save money without jeopardizing state and federal means-tested benefits like Medicaid, Supplemental Security Income (SSI), food or housing assistance. Last week, the Maryland 529 Board approved an intergovernmental cooperative agreement with the State of Oregon and Sumday Administration, LLC (a subsidiary of Bank of New York Mellon (BNYM), for the savings program known as Maryland ABLE (Achieving Better Life Experiences), which is now headed to the Board of Public Works for final approval on Wednesday.
After final Board of Public Works approval, which is expected to be unanimous, the Maryland ABLE program will be overseen by the public agency responsible for the state’s $6.24 billion college savings plans.
Maryland ABLE is part of a national, bipartisan effort to provide more independence, greater financial security, and a better quality of life for individuals with disabilities. Once the program is launched, Marylanders with qualified disabilities will be able to save up to $100,000 in their Maryland ABLE account above beyond the paltry $2,000 currently set by the SSI program without threatening their public assistance.
ABLE accounts are designed to receive similar federal tax benefits to those enjoyed by 529 college savings plans if used for qualified disability expenses in the way that college savers currently use 529 accounts for qualified education expenses.
There are certain differences, however. Unlike a college savings account, where a parent or grandparent often opens an account for a dependent, the eligible beneficiary of an ABLE account or their legal guardian is also in control as the account owner. Total annual contributions to an ABLE account are limited to $14,000, matching the annual federal gift tax exclusion. Additionally, contributions to a Maryland ABLE account are eligible for up to a $2,500 state income tax deduction per filer, and up to $5,000 for joint filers.
The ABLE program is about the dignity of every individual, and the recognition that everyone should have the ability to contribute in a meaningful way, despite any limitations or personal challenges. It’s about supporting families with loved ones who face challenges, and helping to address the great fear of what happens after they’re gone.
It’s about expanding the opportunity for families to support their loved ones with disabilities to those who can’t afford the expensive costs of establishing a disability trust, and providing a cost-effective alternative to pay for everyday expenses even for those families that can. It’s about making progress in the way we view our friends and neighbors who face challenges, and turning that progress into policies that improve people’s lives.
Following congressional passage of the Stephen Beck Jr., Achieving a Better Life Experience Act in December 2014, a group of state administrators, disability rights advocates, financial institutions and federal regulators convened in Chicago to determine how to launch ABLE programs in states across the country. Here in Maryland, legislation sponsored by Sen. Brian Feldman (D) and then-Del. Craig Zucker (D) passed unanimously in 2015, establishing a Maryland ABLE Task Force led by the Department of Disabilities’ Deputy Secretary Bill Frank and staffed by Anne Blackfield, which included the bill’s sponsors, as well as Sen. Andrew Serafini (R), Del Eric Bromwell (D), state representatives, and disability rights advocates including Heather Sachs, Stuart Spielman, Angela Fox, Mary O’Byrne and Renee Gordon.
In 2016, a bill to establish a Maryland ABLE program based on the task force’s recommendation unanimously passed the General Assembly and was signed into law by Gov. Larry Hogan (R), renaming the College Savings Programs of Maryland to Maryland 529 and designating the agency to oversee the newly created disability accounts.
At a time when our politics is consumed by partisanship, when so-called policy victories are too often defined by bringing opponents down rather than by lifting people up, ABLE in Maryland and throughout the country is a victory with many mothers and fathers: elected Democrats and Republicans, disability rights advocates and state administrators, financial companies and federal regulators. Long before I ever began working on this program, countless advocates pushed for a way to help their friends and their families, and never gave up despite repeated setbacks. Many of the most prominent advocates who have shaped the national debate are the very same Marylanders who served on our task force here, and who worked to establish our own state program. It’s a reminder of the incredible assets we have in Maryland, beginning with human talent.
Looking back on our initial conversations in Chicago, and the subsequent debates we had on the Maryland ABLE Task Force and the ABLE Committee, it’s gratifying to see a Maryland ABLE program on the verge of actually helping real people. When Marylanders with disabilities utilize Maryland ABLE accounts in the months and years to come, I will continue to be humbled by the honor of having worked with so many talented, tireless advocates, and grateful for the privilege to participate in getting this program off the ground. When the system works, people benefit.
Supporting our friends and neighbors with disabilities shouldn’t require that they live in poverty. With passage of the Maryland ABLE program by Board of Public Works this week, they soon won’t have to.
Andrew Friedson formerly served as the interim executive director and also as a Board Member of Maryland 529 (formerly College Savings Plans of Maryland) and as a senior policy advisor to the comptroller of Maryland. He was a member of the Maryland ABLE Task Force and the Maryland ABLE Committee. He is currently a candidate for Montgomery County Council in District 1, and is a steering committee member of Maryland Matters. For more information on Maryland ABLE, please visit: maryland529.com/MDABLE.