Hamilton Journal News: STABLE Accounts help those with disability keep, spend their own money
Hamilton Journal News
By Michael Pitman
January 31, 2017
Morgan Gattermeyer is thrilled she’s able to begin to save and spend her own money — tax free — thanks to recently enacted federal and state laws to help those who receive Supplemental Security Income money and other benefits.
Gattermeyer, 24, lives at home with her parents in Hamilton, works and creates art for sale at the InsideOut Studio, and has panhypopituitarism, a syndrome where there’s decreased activity in the pituitary glands. As a result she doesn’t get thirsty, she can’t have children and she sometimes has difficulty in communication.
She just recently signed up for state-operated STABLE Account — she’s planning to save for a new car — and already has $1,000 in that account.
“There’s not quite enough to do anything yet, but it’s getting there,” said Gattermeyer.
Part of her monthly paycheck is deposited into the STABLE Account.
“It’s a safe kind of feeling, as well as a guarantee to know that you’re going to have money in that account,” Gattermeyer said.
STABLE Accounts are investment accounts, similar to the 529 college savings account, and available to eligible individuals with disabilities. Each state can develop a program because of the Achieving a Better Life Experience, or ABLE, Act, federal lawmakers passed in December 2014. Ohio’s STABLE Account program launched this past June and anyone in the country can invest in Ohio’s program.
Earnings in a STABLE Account are federal and state income tax-free, and the earnings remain tax-free upon withdrawing them as long as they are spent on “Qualified Disability Expenses,” such as housing, education, transportation, and health prevention and wellness.
It took several years for the federal ABLE Act to be enacted. Former Speaker of the House John Boehner said when the act passed in the U.S. House the legislation worked on “a simple but powerful idea.”
“(The idea is to) give individuals with disabilities the same opportunity to put away money tax-free for things like school, retirement, and job training that any American has,” said Boehner in December 2014.
It’s been eight months since the state launched its STABLE Account program, the first one in the nation, according to the Ohio Treasurer’s Office which manages the program. STABLE Account program Director Juliana Crist said as of this week there are 2,000 people who have enrolled, and more than half are Ohio residents.
Until the federal and state laws changed, Gattermeyer and others who receive benefits because of their disability were only able to have $2,000 to their name, said Ohio Rep. Margy Conditt, R-Liberty Twp., one of two Southwest Ohio lawmakers that helped established the STABLE Accounts.
“This is one of the most meaningful pieces of legislation that I’ve ever done. It changes lives,” said Conditt, who jointly sponsored Ohio’s law with Ohio Rep. Jonathan Devers, R-Madeira.
“As you have a child who’s growing up, and they’re an adult child with no siblings to take care of them, you as a parent are worried about them,” said Conditt. In the past those who can no longer depend on others are often regulated to live in group homes or in poverty.
Up to $14,000 a tax year can be added to a STABLE Account, with a total cap of $426,000, There are five portfolio options where people can invest their money — four mutual funds and a Fifth-Third Bank account. Individuals can place their money in any one, or combination, of the five portfolio options, and can receive tax-deductible monetary gifts from friends or family members.
Crist said parents can limit how much money a child can take out at a time by way of a custom-built debit card, and there are protections built in so they can’t be used just anywhere. They can’t be used at casinos or on gaming websites, and parents or guardians can put limits how much can be spent with the card.
Another feature of Ohio’s program is account-holders who are Ohio residents can receive a $2,000 tax deduction.
The tax deduction models the 529 college savings accounts, which also has a $2,000 tax deduction. Conditt said the law dictates if the deduction in the 529 accounts go up, so does the deduction for the STABLE Accounts.
“That’s been a big help for the program,” said Crist.