Dodd Anounces The Disability Savings Act Of 2008

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Dodd Anounces The Disability Savings Act Of 2008

By A Hamilton | Washington Bureau Chief

http://www.courant.com/news/custom/topnews/hcu-

doddsavingsact,0,2489789.story

Sen. Dodd announced significant new legislation today

that would allow families of people with disabilities to save money

in tax-advantaged accounts. The Disability Savings Act of 2008 would

allow savings similar to college 529 plans, so families could put

aside money for care without jeopardizing their access to existing

government assistance.

Dodd said it would give relief to families asking the stressful

question: When we're gone, who will take care of our loved one with a

disability?

The announcement, in a room of the Capitol, was before a friendly

crowd, mostly from Autism Speaks, an organization founded by

Connecticut residents Bob and Suzanne , who have an autistic

grandson.

When using money from the accounts, which would be capped at $1

million each, certain things would be tax free, including education,

medical services, job training and transportation.

Dodd didn't downplay the difficulty of passing a bill during a

tumultuous election year. He told the crowd that he needed an

influential co-sponsor from the other side of the aisle. And he said

he would need an army of supporters, to which he added: " And you're

my army. "

Disability Savings Act of 2008

http://dodd.senate.gov/index.php?q=node/4316

Purpose:

To encourage individuals with disabilities and their families to save private

funds for disability-related expenses to supplement, not supplant, benefits

provided by other sources (including Medicaid and private insurance) so that

people with disabilities can maintain health, independence, and quality of life.

Overview:

This legislation encourages individuals with disabilities and their families to

save personal funds for their unique disability-related needs in Disability

Savings Accounts (DSAs). The establishment of DSAs will promote the investment

of private funds in the long-term well-being of individuals with disabilities

through tax-advantaged savings tools, including a refundable tax credit for

low-income savers, while protecting the beneficiary’s access to critical public

supports.

Specifics:

DSAs will provide a tax-advantaged mechanism for individuals with disabilities

to save money.

Funds expended from the DSA for specific services such as education, medical

services, employment training and support, transportation, and other related

services will be tax-free.

Interest on accounts with a balance of $250,000 or less is tax free.

Low income earners will receive a refundable matching tax credit of up to $1000

for their contributions to the DSA.

Funds from college savings plans and special needs trusts for the same

beneficiary can be rolled into the DSA without penalty.

Beneficiaries of the account must be determined to be blind or disabled by the

Social Security Administration or the Disability Determination Service of a

state and be under the age of 65. The account can be held and managed by the

beneficiary, their spouse or family member, or a legal guardian through a

financial institution. The DSAs are designed to be easier to manage and set up

than current savings mechanisms, which often require the expensive services of

an attorney. Beneficiaries or their representative can expend funds directly

from the account for services. Assets held in the fund will not be counted

against eligibility for Medicaid and SSI or other federal support services.