Canton Repository: STABLE program helps those with disabilities save money
By Kelli Weir
July 9, 2017
A year-old state investment program allows people with disabilities to save and invest up to $14,00 a year without losing their federal benefits. A Massillon mom hopes more families will consider opening a STABLE account.
It always bothered Pam Vogt that she couldn’t set aside more than $2,000 for her daughter’s future.
The Massillon mother whose daughter, Kristi, was diagnosed at age 2 with the rare Prader-Willi Syndrome wanted to set aside money in Kristi’s name so she would have the financial means to remain living in her two-bedroom ranch home and to keep her Shetland sheepdog, Cozmo, and new horse for years to come. To Vogt, setting aside money for Kristi, now 45, is the same as a parent investing money to save for their child’s future college education.
“You never know what’s going to happen,” Vogt said. “I’m looking at my own mortality here and I do not want her to want for anything after I’m not here. I’m the sole provider for her and if I don’t save the money for her, she won’t have it.”
Despite her objections, Vogt continued to abide by the federal government’s asset cap because she feared exceeding the limit would jeopardize Kristi’s medical benefits through Medicaid.
Then she discovered Ohio’s STABLE Accounts program, which gave her a way to avoid the asset cap without risking Kristi’s benefits. She opened a tax-free account for Kristi in September.
STABLE – State Treasury Achieving a Better Life Act – is a financial investment program administered by the Ohio Treasurer’s Office that allows people with disabilities to save and invest up to $14,000 a year without losing their benefits because the accounts are not counted as assets in the calculation for determining eligibility for needs-based benefit programs such as Medicaid and Supplemental Security Income.
Now, after using the account for nearly a year, Vogt is encouraging other eligible families to consider opening their own STABLE account.
“It really has eased my mind as far as helping her and having something there for her,” Vogt said. ”... It’s financial empowerment.”
She said the STABLE program would be valuable for those with disabilities who are entering community workforce programs where they earn a paycheck.
The Vogts met this month with representatives of the Ohio Treasurer’s Office to share their story about how the STABLE Account has benefited Kristi. Treasurer representatives have been canvassing the state to promote the year-old program.
Mandi Merritt, press secretary for the treasurer’s office, said the biggest obstacle to increasing participation has been raising awareness that families are no longer bound by the $2,000 asset limit if they open a STABLE account.
“For so many years you’ve been told that you can’t do something – that (you can only save up to) $2,000 and that’s it,” Merritt said. “And now it’s can we really do this? Yes, the rules have changed and you can do this.”
The STABLE Accounts program was derived from the federal Achieving a Better Life Experience Act, enacted in December 2014 to ease the often lifelong financial strain borne by individuals with disabilities and their families. The law gave states the opportunity to create tax-free savings accounts whose assets would supplement, not replace, the benefits provided through private insurances, the Medicaid program, the Supplemental Security Income program and other sources.
While Ohio’s STABLE program, which can enroll participants nationwide, leads the 22 other states with similar programs in participants with 3,498 account holders, it still remains largely unknown among the 1.5 million Ohioans with disabilities who might be eligible. Roughly 55 percent of the account holders are from Ohio, said Doug Jackson, deputy director of STABLE Accounts for the Ohio Treasurer’s Office.
Jackson said the remaining 1,500 STABLE accounts have been created by residents from every U.S. state except Wyoming. A figure for the number Stark County account holders was not available.
STABLE Accounts are investment accounts, similar to 529 college savings accounts or 401(k) retirement accounts, but participants can withdraw and spend money as needed. The accounts are meant to complement other financial tools such as a special needs trust.
Participants can contribute up to $14,000 a year to a STABLE account, which is limited to a balance of $426,000. They have five options for how to invest their deposits from low risk to growth-focused with varying levels of risk.
Due to their tax-free status, friends and family can contribute to a STABLE Account and receive a state income tax deduction of up to $2,000 per year per STABLE account. Treasurer office employees said previously family and friends of those with disabilities may have been forced to give non-monetary gifts due to the fear of exceeding the individual’s $2,000 resource limit.
Earnings in STABLE Accounts also are not subject to federal or Ohio income taxes as long as the money is spent on eligible expenses, which range from school tuition and other educational materials to rent and mortgage payments to transportation expenses, job-related training and health insurance and wellness expenses. If STABLE funds are spent on a non-qualified expense, the account holder is required to pay regular income taxes, plus a 10 percent additional tax, on the earnings portion of those non-qualified funds.
Money from STABLE Accounts can be used for housing expenses without affecting SSI benefits as long as the account’s assets total $100,000 or less and money withdrawn for housing expenses are spent within the same month.
STABLE Accounts also come with a loadable prepaid debit card that can be used anywhere MasterCard is accepted.
Jackson said the debit cards do not pull money directly out of a STABLE Account. Instead, authorized account users choose the amount of money from the STABLE Account they want to load onto the card. Non-STABLE money cannot be loaded onto the card.
He said the prepay feature ensures that users can’t overdraft their account because the card is not directly linked to the STABLE account.
Guardians who are authorized users on the account can monitor the debit card’s activity by signing up to receive text message alerts. They also can view and print their spending history through the account’s online tracking feature.
Vogt said the debit card has given Kristi additional financial independence.
“She just feels better. ... She has money that is hers to make her life better for her,” Vogt said.
Kristi recently used the card, which bears her name, to buy her own meal at a restaurant as well as a swimsuit and on a pass to swim with dolphins while on vacation in Daytona, Fla. Pam Vogt said none of the purchases they’ve made with the debit card have been denied as ineligible.
There are no fees associated with using the debit card or for individual account transactions, but Ohio residents pay $2.50 a month to maintain their accounts and pay investment fees that range from 0.19 percent to 0.34 percent depending on the type of investment. Fees are higher for out-of-state participants.