U.S. House members voted overwhelmingly to pass the ABLE Act on Wednesday. The legislation, which would allow people with disabilities to save money without jeopardizing eligibility for government benefits, now heads to the Senate. (Thinkstock)

The U.S. House of Representatives has voted to approve a bill that would establish a new way for people with disabilities to save money without risking their government benefits.

The Achieving a Better Life Experience, or ABLE, Act passed by a vote of 404 to 17 on Wednesday. The measure will now move to the Senate.

Under current rules, many individuals with disabilities can have no more than $2,000 in assets in order to qualify for needed government benefits. The ABLE Act would dramatically alter that scenario, allowing people with disabilities to establish special accounts at any financial institution where they could save up to $14,000 annually under current gift-tax limitations.

The accounts could accrue $100,000 without jeopardizing eligibility for Social Security and other government programs. Meanwhile, the legislation ensures that those with disabilities can retain Medicaid coverage no matter their ABLE account balance.

Funds deposited in the proposed accounts could be used to pay for education, health care, transportation, housing and other expenses. Much like 529 college savings plans, interest earned on savings in the accounts would be tax-free.

Speaking on the House floor ahead of the vote, the bill’s lead sponsor, Rep. Ander Crenshaw, R-Fla., said it’s only fair that people with disabilities get an opportunity to save tax-free much like most Americans can already do in order to pay for college, health care and retirement.

“What this does is simply give individuals with disabilities a chance at the American dream,” Crenshaw said. “They have hopes and dreams just like we all do and this will give them the tool to open the door to a brighter future, the way to realize their full potential.”

With significant bipartisan support, the bill is being called the broadest legislation centering on people with disabilities to move forward since passage of the landmark Americans with Disabilities Act a quarter-century ago.

Though widely supported in the disability community, a provision limiting eligibility for ABLE accounts to individuals with conditions occurring before the age of 26 has led to misgivings from some groups including the National Council on Independent Living, the National Disability Rights Network and United Cerebral Palsy.

Meanwhile, some members of the House objected to the bill over concerns that it will be paid for in part through tweaks to Medicare.

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