Nice save 

The government has long discouraged people with disabilities from saving money. Wait, what?

It was around 2:30 a.m. Not more than 20 minutes had passed since 18-year-old Paul Spotts had awoken from a short nap on the side of the road and started driving again through the August night toward Pueblo, and beyond that, Colorado Springs.

Spotts had moved to the Springs a few months before, after graduating high school in El Paso, Texas. He was excited when his sister agreed to join him in the Springs, and he had gladly offered to help her move. They were almost to their new home.

They never made it.

He fell asleep again, this time at the wheel. Two wheels of Spotts' truck slid on top of a guardrail for about 60 feet before the vehicle plummeted into a small canyon. Spotts' sister wasn't badly injured, but Spotts was thrown from the vehicle and paralyzed from the chest down.

Now 45, he uses a wheelchair to get around and has some dexterity in his right hand and none in his left. It's a severe enough disability that Spotts could have lived off government benefits for the rest of his life. But after going through rehabilitation, he went to work. He was surprised at how many problems that caused.

Working meant he wasn't able to collect certain benefits — which was fine by him, as long as he didn't lose Medicaid, which pays for the expensive medical treatment and equipment he needs to survive. But he did almost lose Medicaid in the 2000s. Twice.

The first time, he says, the government wanted to cut him off because he was working. He had to get a lawyer to prove that his medical expenses were more than he earned. A few years later, he says, he was nearly cut off because his job gave him a bonus of about $1,500. He was told that in order to keep his Medicaid, he needed to spend all the money within a month or donate it — a government employee suggested he give it to a Medicaid charity fund.

"I'm the one that worked hard for that money," Spotts says. "I told them I wasn't [giving it to them]."

Instead, he bought a used couch, video games, a laptop and clothes. But he would have rather saved the money for the next time his car needed new tires or a repair — he was, after all, only pulling in around $20,000 a year.

Like many government benefit programs, those for people with disabilities often come with strict limits on income and assets. The problem is that benefits often don't step down as people become better off; they cut off completely.

That can encourage recipients to limit their work hours, refuse a raise, or spend all their cash instead of saving it. That's especially true when the benefit is something that would be tough to live without — like Medicaid for a person with disabilities.

A law passed by Congress and signed by the president last year could soon ease those requirements. The ABLE (Achieving a Better Life Experience) Act allows people with severe disabilities to set up special tax-advantaged savings accounts, where they can put away up to $100,000 without impacting their eligibility for government programs. The money could only be used for qualified expenses like health care, housing, education and transportation.

Currently, in order to remain eligible for public benefits like food stamps, Supplemental Security Income, and Medicaid, applicants must be able to show that they have no more than "$2,000 in cash savings, retirement funds and other items of significant value," the National Disability Institute, a major proponent of the bill, notes on its website.

ABLE accounts will only be available to those who developed a "severe disability" (as defined by the government) before they were 26. Rules for the accounts are currently being created by the U.S. Department of the Treasury. Eventually, states will oversee the accounts, which will function similarly to a 529 college savings plan.

They should be available by the end of the year, according to the National Disability Institute, though the Treasury Department could not be reached for comment, and state employees said they'd received little information about the ABLE Act so far.

People with disabilities tend to have smaller incomes than average Americans, according to the U.S. Department of Labor. Jana Burke, president of Mariposa Professional Services, a firm specializing in disability law compliance, says that may be partially due to restrictions on saving. Such restrictions even prevent a parent from leaving a disabled child an inheritance or a home.

It's estimated that roughly 10 percent of people with disabilities will be eligible for an ABLE account. Burke says that's a good first step toward creating a benefits system for adults with disabilities that doesn't penalize them for working or saving.

These days, Spotts works at the Independence Center, a local nonprofit that serves and advocates on behalf of people with disabilities. He doesn't use many government benefits, and he says he's not sure if he'd qualify for an ABLE account, or even if he'd want one. But if it would allow him to save money, he says, he'd consider it.


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