Susanne Brasset has $5 in her bank account. She’s scared to save more.
Brasset, a 39-year-old freelance photographer in Denver, has cerebral palsy, which limits her ability to work. To pay her bills, she relies on Social Security, which she gets because of her disability.
But the program monitors her bank accounts to make sure she's not putting away too much money. With more than a few thousand in the bank, she'd be disqualified for the program, as well as for Medicaid and other crucial benefits. Unable to plan for the future, Brasset said her finances put her in a "constant state of anxiety and fear."
“There’s more money I could be making,” she said. “But I’m discouraged by all the rules I need to adhere to.”
Brasset is caught in a bind familiar to many people with disabilities. Their well-being relies on government benefit programs, but these programs impose strict limits on how much recipients can earn and save. Rules intended to bar freeloaders end up keeping disabled people in a permanent state of poverty, unable to put money away for emergencies, retirement, and other life goals.
It's hardly a fringe issue—some 50 million Americans have disabilities, ranging from depression and other mental health conditions to chronic illnesses such as lupus and physical impairments like cerebral palsy and spinal cord injury—and the problem is starting to get more attention. Last week's Democratic National Convention featured disability rights advocate Anastasia Somoza, who has cerebral palsy and spastic quadriplegia, taking the stage in her wheelchair to deliver a searing speech, as well as video of Donald Trump apparently mocking a disabled reporter by waving his arms around spasmodically.
Now a handful of states are rolling out a new financial product called an ABLE account, which could help millions of disabled adults who worry about losing food stamps, cash benefits, or life-sustaining health insurance if they accumulate more than a couple thousand dollars. Three of the states let residents of any other state open an account. Medicaid, the health insurance program for the poor, covers some 65 million Americans.
ABLE is a savings account, created by Congress in 2014, that can be opened by or for people with a disability that began before they turned 26. Like a 529 college savings plan, ABLE accounts are run by states, which need to pass legislation of their own to create them. Just as investment gains in a 529 plan aren’t taxed if the money is used for higher education, the funds in an ABLE account are tax-free if they go toward disability-related expenses, a broad category that includes housing, education, health care, and basic needs.
ABLE goes only so far in fixing a confusing and frustrating system, but it does create a much-needed loophole. For some, the account offers a way to prepare for emergencies. For others, like 35-year-old filmmaker and activist Dominick Evans, it could let them save money that doesn't count toward the asset cap so they can work without losing benefits.
Medicaid is vital for Evans. He was diagnosed with spinal muscular atrophy, a genetic nerve disorder that weakens muscles, when he was four. Unlike most other insurance, Medicaid covers the personal care assistants who help him get out of bed in the morning.