Proposed Tax-Free Savings Plans for Disabled Get Mixed Response
Mar 13, 2008 by Elizabeth Ziegler
(KCPW News) Disabled Utahns are cautiously optimistic about a new tax-free savings account co-sponsored by U.S. Senator Orrin Hatch. Andrew Riggle, a public policy advocate for the Disability Law Center, says the savings accounts are a step in the right direction, but he has some concerns.
"Many individuals with disabilities, and quite often their families as well, would be considered low-income individuals and low income families," Riggle says. "So, how much disposable income are they going to have available to put away in a savings account like this?"
People with disabilities are half as likely to be employed than those without disabilities, according to 2006 Census data. However, if they have money to save, Hatch's bill would allow them to deposit up to $500,000 in tax-free savings accounts to pay for their education, health care, housing, and transportation, among other benefits. Riggle says he also fears the program could be used as an excuse for the federal government to push more of the costs of assisting disabled individuals onto states and families.
"Individuals and families and the states, for the most part, are doing a yeoman's job in supporting these individuals and families as best they can," Riggle says. "And the federal government is a key part of that equation and needs to remain so if the system is going to work."
The Financial Security Accounts for Individuals with Disabilities Act of 2008 is sponsored by Senator Hatch and Senator Bob Casey, a Pennsylvania Democrat. It is endorsed by the National Down Syndrome Society, National Down Syndrome Congress and the National Fragile X Foundation. A copy of the bill is available here.
Email to a friendPosted in KCPW Newsroom. Copyright 2008 KCPW
1. BM said:
As the parent of a child with Down syndrome, I think it is a brilliant idea. I haven't looked at this particular bill, but what we need is something in the vain of a Roth IRA - an after-tax savings vehicle that grows tax free. Unlike typical parents, our children will most likely depend on us after the age of eighteen.
If parents can have tax-free accounts to save for their child's education, shouldn't we also have tax-free accounts to save for our children's livelihoods?
I don't want the government caring for my daughter and I don't want the government stealing money that I'd like to save for her. I don't want to teach my daughter to be dependent on the gov't. She's not enrolled in Medicaid even though she qualifies. I pay for health insurance and we take advantage of FSAs. We get a little help from a state program for PT, OT, and speech therapy, but that program is struggling and we can't count on it forever. Once my daughter turns three, she won't be eligible anyway. Luckily, my state recently passed a bill allowing for school choice for disabled children. We'll see how that works out. I would prefer my daughter not attend gov't school. They can't even teach typical children...how on earth would they help my daughter?
I was actually shocked that there was no tax-free savings vehicle for families with disabilities. It's time for that to change.
2. a mom said:
I suggest this idea to Hatch a few years ago. I saw a program in Canada that allowed and in fact pushes people to save while on welfare or public assistance even housing. The US keeps people poor and then whines when the disabeld complain when programs are cut. This program could allow some people to save a bit of money to pay for somethings.
I lived on less than 700 a month because of my child's autism and had no help. I had to stop working but thanks to Idaho's help, I moved there when Utah would not help, I managed to save on that measly income over 2000 in a short time. I lived very frugally and supported two kids on that income.
It can be done with good money managment skills. One problem in Utah is that there are to many parents that dump their kids on the street and do not help them when they are disabled. There is very few insitutional rep payees who often do not have the best interest of the clienst in mind.