RIDGEFIELD — When David Morgan and Abby Braithwaite want to put away money for their 6-year-old son Corwin’s future, it’s easy.
“If he gets the same $50 check from his grandmother or his aunt on the East Coast it can just go into an account for him,” said Morgan, 43. “Nobody’s going to show up and ask him how much money is in it. Nobody’s going to ask ‘What are you using it for? Why are you saving for college?’ ”
“You don’t have to think twice about it,” said Braithwaite, 41.
But, saving for their 10-year-old daughter, Adara, isn’t so easy. That’s because Adara has Down syndrome and can receive government benefits for her disability.
“There’s been a huge movement toward independent living for adults with disabilities, and all the things you would want to save money for to live independently you can’t have in your name right now,” Braithwaite said.
However, a new savings account will allow the Ridgefield couple to save and invest money toward Adara’s future. Earlier this month Oregon rolled out two savings plans: the Oregon ABLE Savings Plan that Oregon residents can use and ABLE for ALL that residents of any state can use. Washington residents who work in Oregon can take advantage of the plan’s income-tax exemption.
So far, 10 states including Oregon have ABLE plans that are open for enrollment. Washington is still working on its plan.
Previously, people with disabilities who received government benefits, such as Supplemental Security Income or Social Security Disability Insurance, could have no more than $2,000 or be disqualified from benefits, said Kaellen Hessel, spokeswoman for the Oregon ABLE Savings Plan. She’s heard stories of parents writing children out of their wills because their children would lose benefits. Sometimes, people spend money that they hadn’t planned to spend just to ensure their assets are less than $2,000.
“That is severely limiting to people who already have a higher cost of living,” Hessel said.
The Stephen Beck Jr. ABLE (or Achieving a Better Life Experience) Act of 2014 allows people with disabilities to open tax-free savings accounts that can be spent on eligible expenses such as education, housing, legal fees, assistive technology and transportation. U.S. Rep. Jaime Herrera Beutler, R-Camas, was one of nine Washington state representatives who co-sponsored the bill. President Barack Obama signed it on Dec. 19, 2014.
“Even if you’re totally dependent on social services it gives you the ability to have your own money and have a cushion,” said Morgan, who manages the family farm, Plas Newyyd Farm, in Ridgefield.
He believes it’s important for children to have a savings account, whether they have a disability or not.
“The sooner you start saving, the more you’re going to have saved and it’s going to make a difference,” Hessel said. “People could wait until Washington’s plan opens, but it’s going to be easy to transfer over.”
That’s what Morgan and Braithwaite plan to do for their daughter, depending on how Washington’s plan is crafted. When both plans become available people can weigh the benefits and fees of each. Braithwaite knows some of the people in the work group putting together Washington’s plan.
The money can be invested, or the account can be treated more like checking and savings, depending on how much risk the beneficiary wants to take. Under Oregon’s plans, up to $14,000 can be put in annually but earnings can grow to more than $14,000. A person is eligible for an account if the beneficiary was diagnosed with a disability before the age of 26, is a U.S. citizen and the disability will last at least a year.
Some people are advocating to have that age cutoff increased to 46. Currently, the age limit leaves out veterans older than 26 who were injured while overseas, Hessel said. People are also advocating for 529 college savings plans to be allowed to roll into ABLE accounts. With the legislative session changing over, it’s unclear when those ideas might be brought forward, she said.
Like the Americans with Disabilities Act of 1990, the ABLE Act of 2014 is intended to improve quality of life for people with disabilities.
“They should have all the opportunities that someone without disabilities has,” Hessel said.
Braithwaite, a board member of the Northwest Down Syndrome Association, has been tracking the federal legislation around ABLE since Adara was a toddler. With planning, the couple think Adara will probably not depend fully on government services as an adult. They want her to have more autonomy, more choices in how she lives her life and spends money. Whether or not she wants to go to college or continue living in Ridgefield — she can decide when she grows up.