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SCHUMER: OVER 425K NEW YORKERS IN THE CITY WITH DISABILITIES, LIKE AUTISM, DOWN SYNDROME & FRAGILE-X, FACE HUGE FINANCIAL BURDEN FOR SPECIAL...

August 5, 2014



SCHUMER: OVER 425K NEW YORKERS IN THE CITY WITH DISABILITIES, LIKE AUTISM, DOWN SYNDROME & FRAGILE-X, FACE HUGE FINANCIAL BURDEN FOR SPECIAL EDUCATION, HEALTHCARE, TRANSPORTATION & MORE - SENATOR PUSHES LEGISLATION TO CREATE NEW SAVINGS ACCOUNTS TO HELP PARENTS SAVE MONEY FOR CARE OF KIDS

Plan Creates Tax-Advantaged Savings Accounts, Like those for College, To Help Parents Better Afford Medical Care, Education, Transportation & Other Services For Children With Developmental & Physical Disabilities - Currently, If an Individual's Taxable Income & Savings Exceed a Certain Level, They're Disqualified for Key Disability Services

U.S. Senator Charles E. Schumer today announced his support for bipartisan legislation that would create tax-advantaged savings accounts for family members of individuals with long-term disabilities, like Down Syndrome, Autism and Fragile-X, to help them better afford the cost of care and save for the future. The Achieving a Better Life Experience Act (ABLE) would allow families to set up accounts, similar to 529 education savings accounts, to save money to cover critical education, medical care, support services, employment training, housing, and transportation services for individuals with disabilities. Families who are currently the recipients of Supplemental Security Income (SSI) benefits would be eligible to set up these accounts under the legislation that Schumer supports. Currently, without this legislation, a disabled person and their family would be disqualified from key government disability aid if their taxable income and savings exceed a certain level.

According to the most recent data, there are more than 425,000 recipients of SSI benefits throughout New York City and over 30,000 cases of autism in school age children. To highlight the extreme financial struggles that families with disabilities face, and the need for these savings accounts, Schumer noted that according to a 2006 Harvard study, it can cost about $3.2 million to care for an autistic person over the course of their lifetime.

Schumer was joined by representatives of the National Down Syndrome Society, Autism Speaks, the National Fragile X Foundation, and the United Cerebral Palsy of New York City.

"Caring for some of our most vulnerable disabled children, and managing the huge financial cost that comes along with that care, must be a top priority for everyone, and not just their families. Over 425,000 New Yorkers in the City have disabilities, and they and their families should not have to choose between paying for their day-to-day expenses of education, healthcare, transportation, therapies and more, and saving for their future. Creating tax-advantaged savings accounts, similar to IRAs, will allow parents to put away more money for their disabled child, without losing key government disability services and benefits that they need now. Unfortunately, cases of Autism and other disabilities are on the rise and passing this bipartisan legislation is more important than ever; I'm strongly urging my colleagues to get on board with this plan and pass this bill," said Schumer.

Under the ABLE Act originally introduced by Senator Bob Casey (PA), parents of children with a disability would be allowed to set up tax-advantaged savings accounts for their children in order to finance their long term care. Money could be saved to cover education, medical and dental care, community support services, employment training and support, moving and assistive technology, housing and transportation. Many individuals with disabilities and their families have assets that put them above the qualifying cap for Medicaid, but insufficient to cover the costly burden of care. As a result, they are effectively forced to sell assets in order to qualify for Medicaid, which pushes the family towards poverty while unnecessarily swelling Medicaid roles, putting a strain on the program. The qualifying expenses appear below:

* Education -- tuition, books, supplies and other services from preschool through postsecondary education

* Transportation --includes mass transit; purchasing or modifying vehicles with special equipment; and moving expenses

* Housing -- purchasing a home, rent, mortgage payments, home improvements, repairs, taxes and utilities are all qualifying expenses

* Employment support -- expenses related to obtaining and maintaining employment, including job training, assistive technology and personal assistance supports

* Health and wellness -- qualifying costs include premiums for health insurance, mental health, medical, vision, respite care, nutritional support, adaptive equipment and a host of other services

* Assistive technology and personal care attendant support expenses

* Other approved expenses and miscellaneous expenses, including financial management and administrative services, legal fees and any other expenses approved by the Secretary of the Treasury

The Schumer-backed legislation would allow individuals with disabilities or their beneficiaries to create a savings account similar to the 529 College Savings Account to save for long term care. Eligibility would be extended to individuals who qualify for Supplemental Security Income (SSI) benefits through Social Security. The SSI program pays benefits to disabled adults and children who have a limited ability to work and limited financial resources. Individuals who have a medically-determined physical or mental illness that severely limits their ability to function and will last for more than one year are also eligible for a tax-advantaged savings account. Anyone could contribute into an individual's account, and the principle would accrue tax-free throughout the lifetime of the individual who is disabled. Because investments grow tax-deferred, these plans reduce the overall tax burden for individuals with disabilities and their families, making care significantly more affordable.

For example, in a traditional savings account, the amount of interest income accrued annually on deposits is considered taxable income and taxed at the account holder's marginal tax rate. However, under this proposal, the investment grows and can be removed from the accounts completely tax-free. So, under the proposal, if a family deposits $10,000 into an account, assuming an average interest earned of approximately 3%, they will amass about $13,000 in the account after 10 years. Approximately a quarter of that balance is attributable to earnings growth and would be taxable in a traditional savings account, but would not be taxed under the ABLE Act. Additionally, when a withdrawal is made to cover a qualifying expense, all distributions are excludable from the gross income of the beneficiary.

Schumer noted a few examples of populations that would benefit from this legislation. According to the most recent data available, there were 425,034 recipients of SSI benefits in New York City and approximately 30,737 cases of autism in school age children. In New York State, there are about 80,000 with Fragile-X Syndrome, which is a genetic condition that causes developmental problems including learning disabilities and cognitive impairment. An estimated 25,000 people in New York State have Down syndrome.

While the bill offers cost savings for a large number of individuals with disabilities, Schumer highlighted the expenses of caring for an individual with autism in his push for the ABLE Act. According to the CDC, it is estimated that total societal costs of caring for children with ASD were over $9 billion in 2011. Autism makes it difficult for individuals to communicate and interact with other members of society, which increases the need for special schooling, tutoring, and assistance when it comes to finding employment.

Families of children with developmental disabilities face enormous economic costs due to care expenses. According to the Center for Disease Control and Prevention, it is estimated to cost at least $17,000 more per year to care for a child with autism compared to a child without autism. On average, medical expenditures for children and adolescents with ASD were 4.1-6.2 times greater than for those without ASD. The medical costs for a child with Down Syndrome were 12 to 13 times higher than a child without Down Syndrome, as reported by the National Down Syndrome Society.

Read this original document at: http://www.schumer.senate.gov/Newsroom/record.cfm?id=355165


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Source: Congressional Documents & Publications


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