Social Security Disability Earnings and SavingsLegislators on Capital Hill have been considering a new bill that would permit people receiving Social Security disability income to save money for the future. The proposed legislation would allow for a tax-free financial account and give people on Social Security disability the ability to earn more money and create a financial safety net for themselves.

The primary motivation behind the law, called the Achieving a Better Life Experience, a.k.a ABLE, act, is the fact that under current laws, people receiving Social Security disability are prevented from earning more than a certain level of income and saving more than a certain amount of money. As it stands, an antiquated piece of law prevents many disability recipients from earning more than $700 per month or saving more than $2,000 in their accounts.

Income Caps Are Hindering Disability Recipients

During deliberations in Congress, one woman who suffers from Down syndrome made a speech before the Senate Finance Subcommittee. She said that having Down syndrome and receiving government assistance should not be a reason for her income-earning capacity to be limited to just $700 per month. She said that she is being prevented from achieving her goals and what she wants for her life.

If the ABLE act is signed into law, disability recipients will be able save as much as $14,000 per year in a special tax-free account. Also, earning more than $700 per month will not prevent them from having access to Medicaid and other Social Security benefits. Supporters say that this will allow disabled persons to put money away to further their education, save for housing and other life expenditures -- so that they can become more independent in life.

ABLE Act Could Increase Opportunities for the Disabled

Social Security disability has, in many cases, represented a double-edged sword because it places limitations on an individual's ability to become more financially prosperous. It could be argued that some are held down by the laws that control these government benefits. Any new law that expands individuals' rights and abilities to earn more money, save more money and perhaps one day step out of the Social Security system entirely -- should they choose -- is a laudable achievement so long as it does not result in an overall lessening of benefits and/or quality of life for recipients in the long run.