Four years ago, disability advocate Stephen Beck Jr. presented a simple but troubling problem to Congress: his daughter, who had Down Syndrome and received Supplemental Security Income (SSI), was prohibited from saving any money. Any income exceeding the most basic of living expenses would trigger a benefits cut-off –– and in some cases cause her to owe the government money. This is a situation blind people are all too familiar with, wherein the system that is made to support them often holds them back.
In 2014, spurred by Beck’s story, 85% of Congress joined forces to sign the ABLE Act: a federal update to tax law that would allow individuals with disabilities to save up to $100,000 in a designated bank account, to achieve a higher standard of living before their benefits were revoked.
Dozens of states have instituted ABLE Accounts, and this week California announced that it would be the next. On August 8th, California State Treasurer John Chiang announced that California’s ABLE program will launch by the end of the year, allowing all Californians on SSI to finally create a better foundation for their financial futures.
TIAA-CREF Tuition Financing, Inc. (TFI) will administer the program, called CalABLE. CalABLE is the California version of the federal ABLE Act.
“The ABLE Act is the most significant law for people who are blind, visually impaired, or disabled since the Americans with Disabilities Act was passed into law,” said Dante Allen, executive director for CalABLE. “We are very excited to be one step closer to launching CalABLE so that Californians can fully benefit from the financial flexibility and independence that this program will inspire.”
Participants can deposit online or by check to their accounts, and can invite family and friends to contribute directly to the account. The program also provides resources for investment options.
TFI was chosen by the CalABLE board vote due to the firm’s “low costs, proposed investment portfolio that offered simple choices for enrollees with clear preferences, and the simplicity of its program for those new to such a savings program,” according to the release.
“TFI’s selection means we’re one step closer to turning on CalABLE’s ‘Open for Business’ sign,” said Chiang in a release. “TFI’s expertise and oversight are a welcome help in reaching Californian’s with disabilities and their families, who will soon be able to save up to $15,000 a year, tax free, without jeopardizing their federal and state assistance.”
Under the current system, people who receive SSI are prohibited from saving more than $2,000 without losing their benefits. This is severely limiting for people throughout CA communities, including the 70 percent of blind adults who are unemployed.
“No one should have to fear losing their disability benefits because they decided to save wisely and invest in their future,” Chiang said in a release. “This program will help ensure no Californian with a disability will be penalized for thinking ahead.”
LightHouse will continue to cover these developments and announce when CalABLE is up and running. To continue to receive updates about these and similar programs, subscribe to our weekly newsletter.