Governor Newsom Signs CalABLE Expansion Bill Sponsored by Treasurer Ma and Drafted by Assemblyman Irwin
Increased tax-advantaged contributions to the Disability Savings Program
October 3, 2022 – SACRAMENTO – Governor Gavin Newsom has signed legislation sponsored by Treasurer Fiona Ma to expand eligible contributions to CalABLE, California’s tax-advantaged savings and investment program for people with disabilities. Nearly 8,000 CalABLE accounts have been opened with nearly $80 million in savings since CalABLE’s inception. Assembly Bill (AB) 2216, authored by longtime CalABLE champion Assemblyman Jacqui Irwin (D-Thousand Oaks), expands the impact of the CalABLE savings plan for people qualified disabled.
“This bill is a major step towards improving the lives of people with disabilities through financial empowerment,” said California State Treasurer Ma, who chairs the CalABLE Act Board of Directors. “These improvements will go a long way to ensuring this community has full access to financial resources to plan for a better future.”
Starting January 1, 2023, CalABLE account holders who are working and not participating in an employer retirement program will be able to contribute the full amount allowed by federal law, up to $28,880 per year, to their CalABLE account. . The bill expands the maximum annual contribution to a CalABLE account, encourages participation in California’s ABLE program by limiting Medicaid clawback provisions, and makes additional changes to comply with updated federal ABLE laws that provide greater flexibility to account holders.
“In 2015, in partnership with the State Treasurer, I authored AB 449 establishing the CalABLE program in California. Seven years later, I am proud to say that our CalABLE program is achieving its goal of ensuring that every Californian with disabilities have the opportunity to enjoy financial flexibility and independence without fear of jeopardizing the public benefits they need,” said Assemblyman Irwin. “My sincere thanks to Treasurer Fiona Ma for her work on implementing CalABLE and continuing the partnership as I introduced AB 2216 this year to further strengthen the CalABLE program. I am delighted that Governor Newsom has signed my Bill AB 2216, and I look forward to the continued success of CalABLE.”
CalABLE is the state of California’s tax-advantaged savings and investment program that benefits people whose qualifying disability began before age 26. Based on the federal Achieving Better Life Experiences (ABLE) law that Congress passed in 2014, the program allows eligible individuals to save up to $16,000 annually in an ABLE account and access the money anytime. without taxes or penalties when the money is used to maintain or improve the account holder’s health, independence or quality of life. Up to $100,000 of funds in an ABLE account do not count against the resource limits of federal and state benefit programs like Supplemental Security Income (SSI) and Medicaid. Established in December 2018, CalABLE has enrolled over 8,000 account holders who have saved and invested nearly $80 million, making CalABLE one of the fastest growing ABLE programs in the nation.
Source: CA. Office of Treasures