DeVarona Testifies in Treasury Support of MiABLE Expansion
A bill moving through the Michigan Legislature could provide greater financial and economic benefits to Michiganders with disabilities if passed.
MiABLE Director Scott DeVarona testified in front of the state House Families, Children and Seniors Committee on Tuesday, June 18, to encourage passage of House Bill 5781. The bill would amend the Michigan Achieving a Better Life Experience (MiABLE) Act to revise the definition of the internal review code from “in effect on January 1, 2015” to “in effect on January 1, 2024.”
The simple definition change would allow for tax-free rollovers from education savings accounts to MiABLE accounts, enabling disabled individuals to transfer funds from their 529 plans without tax penalties. This change would also raise the disability age from 26 to 46 and make more Michiganders eligible for MiABLE enrollment.
“In practice, however, this hasn’t occurred yet in Michigan,” said State Rep. Sharon MacDonell (D-Troy) as she testified during the hearing. “This is due to a quirk in Michigan’s Constitution. Our state constitution bans so-called rolling conformity with federal rules changes. When the federal government updates rules governing state programs, the new rules do not go into effect in Michigan automatically. More simply put, it means updating to the new federal rules requires legislative action.”
Established in Michigan in 2015, MiABLE is a disability savings program administered by the Michigan Department of Treasury. It was designed to help ease the financial burden challenging people with disabilities and their families. MiABLE accounts help people with disabilities save for current and future expenses without jeopardizing government assistance like Medicaid and Supplemental Security Income.
MiABLE Director Scott DeVarona provided an overview about MiABLE, explaining how the goal of the program is to provide individuals with disabilities the option to save while maintaining their existing benefits and how enlarging the program would provide more opportunity for disabled Michiganders.
“One of the things that this legislation will allow is for us to expand the age range of onset from 26 to 46,” DeVarona said. “We anticipate that will double the number of people in Michigan who are eligible for this program.”
In Michigan and nationally, a $2,000 federal asset limit is imposed on people with disabilities who receive government benefits. Compared with their peers, people with disabilities are twice as likely to live in poverty, less likely to be employed and more likely to be underemployed.
Currently, MiABLE allows individuals who became disabled before age 26 and their families to save up to $18,000 annually in various investment options. On top of that limit, beneficiaries who are employed can contribute an amount equal to their current-year gross income, up to another $14,580.
MiABLE can be used for “qualified disability expenses,” like education expenses, housing and rent, basic living expenses, transportation, assistive technology, health and wellness, financial management, legal fees, or end-of-life expenses.
“The №1 thing that the ABLE debit card is used for — food,” he said during the hearing. “They pay for their disability related expenses with their ABLE card and food is the №1 expense. One of the reasons why individuals with disabilities are unemployed or underemployed is a lack of transportation. It can be very difficult to move a person with a disability based on that disability. The ABLE program allows individuals to pay for their transportation expenses out their ABLE account.”
As of May 31, there are between 500,000 and 600,000 eligible Michigan residents who can open a MiABLE account. Currently, there are 5,500 accounts that have been opened, which represents around 1% of the potential disabled population.
MiABLE currently has more than $57 million in assets, making it the third-largest ABLE program in the National ABLE alliance.
“We want to make this program even more accessible and even bigger,” DeVarona added. “The bottom line is the more people we serve, the better we can do.”
Additional topics discussed included the proposed $3 million appropriation for additional marketing and outreach to help bring awareness about the program and related tax benefits.
Treasury’s Office of Legislative Affairs Director Amanda West facilitated the testimony. Office of Postsecondary Financial Planning Bureau Director Robin Lott provided additional program support.
The bill remains in committee.
Additional information about MiABLE can be found at www.miable.org.
