The state of Alaska has launched a new program installed by legislation pushed by Rep. Dan Saddler, R-Eagle River, in last year’s Legislative session.
The Alaska ABLE Plan, which allows people to invest money on behalf of young disabled Alaskans, opened Thursday.
Before the plan’s start, disabled Alaskans faced strict limits on the amount they could save. Those who saved more than $2,000 risked having their federal benefits revoked or reduced.
The intent of the program is to allow friends and family to set aside money to care for a disabled youth after age or death prevent the parents themselves from caring for the child.
The ABLE program is structured similarly to a 529 college savings account and allows families to place up to $14,000 in savings per year without losing federal Medicaid or Social Security Insurance eligibility. There are tax benefits to the program as long as the money in the account is used for things such as medical assistance, education, housing or transportation.
Non-qualified expenses are subject to a tax penalty.
There is a cap of $400,000 per person, though SSI benefits could be suspended if a person has a balance of more than $100,000.
To be eligible for an ABLE account, a person must have been blinded or become disabled before age 26.
According to an analysis performed by the Governor’s Council on Disabilities and Special Education, about 13,770 Alaskans might qualify under those limits.
The program, administered through Ascensus College Savings of Massachusetts, is available online at http://ak.savewithable.com.
The program was inspired by Saddler, who proposed House Bill 188 in the 29th Legislature after his experience caring for one of his children.
The bill passed the House on April 9 and the Senate on April 16. It was signed into law on May 11.
The bill was made possible through federal legislation passed in 2014 and modified in 2015. Alaska is the 36th state to create an ABLE program under the federal legislation.
An analysis presented by the Alaska Department of Revenue to the Legislature indicated that program expenses would be paid through fees.
