Although all parents worry about the future for their children, those who have a child with a disability also worry about the finances that may impact their child. According to former 5th District Representative Melanie George-Smith, children with special needs are not allowed to save money as it can jeopardize other benefits they need, including Medicaid. For this reason, the State of Delaware developed DEpendABLE (ABLE), a savings program designed for young people with disabilities and special needs.
“That day that Kayla was born, I was sort of paralyzed by fear for our future,” Amy Kosmalski said. “It included everything. Will she be able to go to college? Will she be able to drive a car get married and a lot of that is financial based.”
Amy’s husband, Rick, stated that every parent fears for their child’s future with worries about what tomorrow may bring. When he and his wife learned that they would be unable to save money for Kayla’s future or risk losing benefits, they knew something had to change. Together with other families with children with either special needs or disabilities, they helped create ABLE.
“ABLE is designed to help kids with special needs be able to save, analogous to the 529 plan so that kids with special needs are able to grow up, go to college, live independently, live as fulfilling a life as they’re able to,” George-Smith said.
Amy referred to Kayla’s ABLE account as freedom as it provided families with the freedom and opportunity to save for things like college or a car, but also allowed them to access the funds should they need it while the child is growing.
“Our hope is that Kayla’s going to be able to go to college, to get a career, not just a job and to be able to save money, but there are other people with disabilities that may not be able to do that,” Amy said. “And really what this does is it levels the playing field. Just like you or I. It doesn’t matter what ability or disability we have, we can save for our future.”
Delaware State Treasurer Colleen C. Davis hopes the accounts will get people with disabilities to a point where they can achieve something great, that they are not bound by limitations. An ABLE account can be opened online with as little as $25 and accounts can be accessed by phone or online 24 hours a day, seven days a week. A checking option is available that allows access to funds by debit card and, by using Ugift, anyone can contribute to the child’s account. The best part about ABLE is that the savings does not jeopardize SSI, Medicaid or other benefits required by those with special needs.
Earnings on ABLE accounts are federally tax-deferred and withdrawals for qualified expenses are federally tax free as well. There is a tax deduction of up to $5,000 for contributions to ABLE accounts on Delaware income tax returns. Some of the qualifying expenses include housing, living expenses, healthcare, transportation, education, job training and employment support.
“The ABLE account means to save me money for freedom, and it’s amazing,” Kayla said.
To learn more about the DEpendABLE accounts, visit https://treasurer.delaware.gov/able-program/.
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