People With Disabilities Could Save More Under Proposed Bill

Takeaways

• The ABLE Employment Flexibility Act is a proposed bill that would allow people with disabilities to save more money in their ABLE accounts without losing access to public benefits like Medicaid and SSI.
• The bill aims to encourage employment and financial independence for individuals with disabilities by allowing them to contribute a portion of their earned income to ABLE accounts above the current annual limit, and by enabling employers to make tax-exempt contributions to these accounts.

The Achieving a Better Life Experience (ABLE) Act, enacted in 2014, revolutionized financial planning for people with disabilities by allowing them to save money in tax-advantaged accounts without jeopardizing their eligibility for critical public benefits such as Medicaid and Supplemental Security Income (SSI). Building on this foundation, the newly reintroduced ABLE Employment Flexibility Act aims to further encourage employment and financial security for working individuals with disabilities.

What Are ABLE Accounts?

To qualify for certain federal public benefits such as Medicaid, individuals with disabilities generally must meet strict asset limits. For instance, most states require Medicaid recipients to have no more than $2,000 in resources to their name to maintain their benefits.

An ABLE account is a tax-advantaged savings account for people with disabilities. It allows eligible individuals to save up to $19,000 a year (as of 2025) without jeopardizing their access to certain public benefits, including SSI and Medicaid. In fact, an ABLE account allows the account owner to save a total of up to $100,000 without affecting their SSI.

The account beneficiary or their family, friends, or caregivers can make contributions to an ABLE account, and the earnings grow tax-free. Funds from an ABLE account can pay for qualified disability expenses, including transportation, education, health care, and other basic living expenses.

While more than 187,000 ABLE accounts nationwide held more than $2 billion in assets as of 2024, millions of eligible disabled people remain unaware of this savings option.

The ABLE Employment Flexibility Act

As mentioned above, under the original ABLE Act, contributions to an ABLE account are capped annually. For working individuals with disabilities, this limit can be particularly restrictive.

The ABLE Employment Flexibility Act is a legislative enhancement to the original ABLE Act. Reintroduced to the House of Representatives by U.S. Rep. Sharice Davids (D-KS) in July, its primary goal is to enable people with disabilities to accumulate and retain greater financial resources while maintaining access to vital public benefits.

The bill seeks to achieve this in part by allowing individuals with disabilities to contribute a portion of their earned income to their ABLE accounts beyond the standard contribution limit. Sponsors of the bill say this would encourage people with disabilities to pursue employment while also increasing their financial independence.

Today, many employers offer 401(k) matching contributions as an employment benefit. As the news release on Davids’ website states, disabled employees often cannot take advantage of this benefit because they must limit their assets to receive needs-based program benefits.

“Contributions to retirement accounts can unintentionally disqualify individuals from these benefits, leaving workers with disabilities at a financial disadvantage compared to their peers,” the new release states.

Under the ABLE Employment Flexibility Act, employers could also make tax-exempt contributions to employees’ ABLE accounts instead of traditional 401(k) accounts.

Benefits of the ABLE Employment Flexibility Act

The ABLE Employment Flexibility Act aims to promote financial independence by allowing workers with disabilities to save more of their earnings and avoid the “benefits cliff” that many face when their income exceeds strict eligibility limits for Medicaid, SSI, and other benefits.

According to the Act’s sponsors, the opportunity to retain more of their earnings would serve as a strong incentive for individuals with disabilities to seek and maintain employment, which in turn supports self-sufficiency and personal fulfillment. By encouraging employer-supported contributions and payroll deductions, the ABLE Employment Flexibility Act also seeks to foster a more inclusive workplace environment.

“I introduced this bill to ensure that workers with disabilities can build financial security without sacrificing the federal benefits that help them succeed,” said Davids. “It’s a commonsense fix that promotes equity, independence, and economic opportunity for millions of Americans.”

Rep. Brian Fitzpatrick (R-PA) co-sponsors the bill, and numerous organizations have expressed support for it, including the Commission for Disability Employment and the National Down Syndrome Congress.

Effects on the Disability Community

For individuals with disabilities, employment can be a double-edged sword. Though it offers financial independence, it can also place benefits eligibility at risk. The ABLE Employment Flexibility Act seeks to address this dilemma by allowing workers with disabilities to save more of their earnings without the fear of losing access to Medicaid or SSI. According to the bill’s sponsors, this flexibility will empower individuals to accept higher-paying jobs, work more hours, or take on promotions without the fear of earning too much.

At the same time, the ABLE Employment Flexibility Act could encourage employers to create more inclusive workplaces and attract a broader talent pool. By offering payroll deduction options and potentially matching contributions, companies can demonstrate their commitment to supporting employees with disabilities.

Learn More About Work-Related Opportunities

Learn more about the Achieving a Better Life Experience Act on the ABLE National Resource Center website. For additional reading on benefits for workers with disabilities, check out the following articles:

• Medicaid Coverage for Working People With Disabilities
• Five Practical Uses for an ABLE Account
• What Assets Count When Applying for SSI?