TUPELO • A new program is opening the door for people with disabilities and their families to save for the future.
This week, the Mississippi ABLE program launched across the state. Similar to a 529 educational savings account, the ABLE account will allow people with disabilities and their families to set aside funds without jeopardizing Social Security and Medicaid benefits. The funds can grow tax-free as long as they are used for disability-related expenses.
Dee Crowe, 19, a Tupelo High School student, signed up with his mom Janna Crowe on Tuesday.
“It’s the first time we’ve been able to save for him for the future,” Crowe said. “We want him to be able to live as independently as possible and hopefully have a job.”
Spencer Kirkpatrick, who signed up with his dad Kevan Kirkpatrick, will start contributing to his ABLE account this summer. The Mississippi State University Access Program student will have a paid internship.
“This will allow him to stand on his own two feet more,” Kirkpatrick said.
Prior to the creation of the ABLE program, it’s been very difficult for people with disabilities to save without losing their state and federal benefits. Under current law, people with disabilities aren’t eligible for federal benefits if they have savings of more than $2,000 and they aren’t eligible for Medicaid if they have more than $4,000 in savings.
“There’s so many parents and grandparents who feel they can’t help a person with disabilities because they risk their benefits being cut off,” said Mississippi ABLE board chairman Rick Courtney, who is an attorney who focuses on special needs law and whose daughter has a disability.
Currently, the ABLE program is open to people with a disability which began before the age of 26.
How it works
In 2014, the U.S. Congress passed legislation laying the groundwork for the ABLE program on a national level. In 2017, the Mississippi Legislature approved the framework for the state’s program. Sign up for Mississippi ABLE began this week.
Unlike retirement savings, which can’t be spent without tax penalty before a certain age, the ABLE funds can be accessed immediately, said Chris Howard, executive director of the Mississippi Department of Rehabilitation Services.
“They can save for the future or meet immediate needs,” Howard said.
Qualified expenses can include assistive technology, tuition and books for classes or training programs, transportation and housing.
“It has to be disability-related, but it’s broad,” Howard said.
The ABLE account can be set up with differing levels of investment strategies, ranging from aggressive to conservative, like an IRA or 401(k), said Sue Hopkins, vice president of relationship management for Ascensus, which is helping Mississippi manage the program.
“The options are based on risk,” Hopkins said. “There’s also a checking account option that runs just like a checking account with a debit card.”
Annual donations are capped at $15,000 and there are limits on how large the fund can grow. Older adults can sign up for the program, but they must have become disabled before they turned 26. There is federal legislation pending that would increase the age and the amount that can be donated annually, Hopkins said.
Individuals can find out more and sign up at mississippiable.com or by calling (888) 609-3469.