The state’s implementation of a federal law allowing disabled people and their families to start tax-deferred savings accounts is at an apparent impasse due to lack of funding.
The Achieving a Better Life Experience Act, passed in 2014, allowed states to establish their own programs for the disabled. Connecticut’s legislature passed a law in 2015 making the state treasurer responsible for the program.
ABLE accounts, which function similarly to college fund accounts, allow families to save money for costs related to a disability without exceeding the $2,000 cap on assets required to remain eligible for government aid, including Social Security.
The law was primarily written so parents could make sure their adult children with disabilities would have savings. Money from the accounts can be used to pay for expenses, including education, housing, and transportation.
The state treasurer’s office said it entered negotiations last year with the state of Oregon, which has already established an ABLE Trust. The goal was for Connecticut to offer the program through Oregon’s existing platform.
But negotiations have “proved difficult,” the treasurer’s office says, because the legislature did not provide funding. The office estimates that $320,000 is necessary to start the ABLE Trust.
“The Treasurer, as trustee of ABLE with a fiduciary responsibility to evaluate the program’s investment options on behalf of Connecticut residents, was unable to hire staff or engage outside consultants,” said a letter the treasurer’s office sent last month to a 20-member advisory committee. “The lack of start-up funds meant the Treasurer would have to delegate her fiduciary duties to another state government...this is an untenable position...so, we are an impasse for now.”
State Treasurer Denise Nappier said in a December 2017 letter to lawmakers that contract negotiations with Oregon were underway and she hoped to launch Connecticut's ABLE program in spring 2018.
Even though Connecticut has not formally established an ABLE Trust, Nappier said Connecticut residents are able to open ABLE accounts in programs sponsored by other states.
State Rep. Cathy Abercrombie, D-Meriden, who co-chairs of the legislature’s Human Services Committee, said she’s disappointed it’s taken this long for Connecticut to launch its own ABLE program. Connecticut is one of 11 states that has yet to establish an ABLE Trust.
“It’s something that we really need to enact now versus later. When we go door knocking, we hear from families all the time how important this is,” Abercrombie said at a recent local forum on the ABLE Act. “We know that families are very concerned about what’s going to happen to their loved ones when they’re no longer here. And what this act does is it gives them the ability to put money away toward and it doesn’t (affect) any of their Social Security.”
Abercrombie is seeking re-election in the 83rd House District.
Roger Misbach, a Libertarian candidate running against Abercrombie, said he would like to see the ABLE accounts combined with similar savings accounts for other costs like education.
“My first thought is, rather than create a whole new wheel, let’s expand tax-free savings accounts to cover health, disabilities, college, elder care,” Misbach said. “We are just adding additional paperwork and bureaucracy to a bloated government,”
Lou Arata, a Republican running against Abercrombie, couldn’t be reached for comment.
The forum attended by Abercrombie was hosted by the Meriden Democratic Town Committee.