Exempts individual retirement accounts as a countable resource for public assistance. This act also prohibits the state as a creditor against an ABLE account in the event of death of a beneficiary.

Plain-English Summary

This bill makes two changes to how Rhode Island handles certain savings accounts when people apply for public assistance programs. First, it would prevent Individual Retirement Accounts (IRAs) — savings accounts people set up to prepare for retirement — from being counted against someone when they apply for public assistance benefits. Currently, having money saved in an IRA could make a person appear to have too many financial resources to qualify for assistance, even though that money is specifically set aside for retirement. This bill would change that rule so IRAs are ignored when the state determines whether someone is eligible for help.

The second part of the bill deals with ABLE accounts, which are special tax-advantaged savings accounts designed for people with disabilities. Under current rules, when an ABLE account holder passes away, the state can sometimes try to recover money it spent on that person's care by making a claim against the remaining funds in the account. This bill would prohibit Rhode Island from doing that, meaning any money left in an ABLE account after a beneficiary's death could pass to their family or estate rather than being taken back by the state.

This bill primarily affects low-income Rhode Islanders who are applying for public assistance and people with disabilities who use ABLE accounts. For retirement savers seeking assistance, it means their IRA savings would no longer disqualify them or reduce their benefits. For families of ABLE account holders, it means they would be more likely to inherit any remaining funds after their loved one dies. The bill has been referred to the House Finance Committee for further review.