Parents of college-bound kids have a variety of helpful savings tools at their disposal, including 529 plans that provide distinct tax advantages. Those accounts are specially designed to allow parents to provide university education to their children. Until now, though, parents of disabled children have been left out of such programs, despite a clear need for a different savings system for medical costs.
A popular Pennsylvania senator has introduced a bill that would change the way Social Security Disability money is handled by parents of disabled children. Those families would also be eligible for a 529-like plan, according to Sen. Bob Casey (D-Penn.). Parents would be permitted to set aside money for medical care, special education, support services, housing and transportation needs, according to the measure. Nearly 30,000 people near the Capital Region alone would be eligible for such a plan, with about 1,500 autistic children benefiting from the new proposal.
People would be eligible to participate in the savings initiative if they qualify for Social Security Disability supplemental income. That benefit provides funds for adults and children alike, especially those with limited income and resources. Further, the plan would be made available to those who suffer an acute physical or mental disability that may affect their earning potential for a year or more.
Lawmakers seem to agree that the plan is smart, as do non-profit supporters throughout the United States. The plan will provide a more flexible alternative for those seeking to care for a disabled loved one, say advocates.
Anyone could contribute to the fund, according to the law's sponsors, including family, friends and other philanthropic individuals. Interest will not be taxed under the proposed rules and withdrawals for qualifying expenses are also tax-exempt. The result would be thousands of dollars in savings over a lifetime for a wide range of disabled individuals and their families. Accessibility to care will be increased, which will allow disabled people to live happier and more fulfilling lives.
The potential effects of the proposed bill have not yet been thoroughly evaluated, according to the measure's supporters and so the initiative is still in its infancy.
Source: Times Union, "Saving plan for disabled people," Cathleen F. Crowley, May 9, 2012