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 Disability Program Navigator: Navigator Frequently Asked Questions 

27(Basic/Advanced)  What information can I pass on to people with disabilities to increase financial literacy and knowledge on tax credits and asset-development strategies?

(DPN Bi-Weekly FAQ 08-21-06 )

Disability Program Navigators (DPN s) and others in the disability community have made it a priority to pass on essential information about work incentives to people who receive SSI and/or SSDI . As a DPN, you most likely have assisted your One-Stop Career Centers to develop partnerships with local Social Security field offices and Community Work Incentive Coordinators (CWICs), and have established referral systems to ensure that beneficiaries get the crucial information they need in order to make informed decisions about work. Along with providing this valuable information, many advocates also educate people about the asset limits associated with SSI, Medicaid, and other programs. While all of this information is imperative for people to understand when considering and entering into employment, there is also a significant need to provide more financial education to people with disabilities, including tax counseling and asset-building tools and resources. As the World Institute on Disability (WID) points out, assets, like homeownership and microenterprise, create connections to our communities - providing stability to our lives, which we need now more than ever.

(WID Equity e-newsletter – October 2005 , A Perfect Fit: People with Disabilities Building Assets: http://www.wid.org/publications/?page=equity&sub=200510&topic=fa)

Considering the challenges that many people with disabilities face in enduring poverty, chronic unemployment, and lack of educational opportunities, there clearly seems to be a significant need for increased financial education in the disability community. Phoebe Ball, a Program Associate for the Law, Health Policy and Disability Center at the University of Iowa, who is involved in the Asset Accumulation and Tax Policy Project and speaks on the topic from her own experiences as a person with a disability, points out that people with disabilities need the freedom, skills and abilities to accumulate assets. This includes learning about managing credit and savings to advance self-sufficiency, having greater access to financial institutions, receiving tax counseling on the Earned Income Tax Credit, and learning about asset-building tools and resources, such as Individual Development Accounts and micro-enterprise. Ms. Ball asserts that income alone is not the solution to poverty and proposes that financial literacy and building assets gives people the confidence to believe that they can take risks and make the transition off public assistance. (WID Equity e-newsletter – December 2005 , Promoting an Asset Building Strategy for People with Disabilities: http://www.wid.org/publications/?page=equity_test&sub=200512&topic=profile)

Take a look at the statistics below to gain more perspective on the challenges that people with disabilities face and the need for improved financial education and asset development in the disability community.

(See References on Disability Statistics & Asset Information at end of FAQ )

  • More than one-third (34%) of persons with disabilities (PWD) live on a household income of less than $15,000 per year, compared to 12% of people without disabilities (Harris, 1994 , 1998 )
  • Among the population aged 25 to 64 with a severe disability, 28% have incomes below the poverty level compared to 8.3% for persons in this age group without a disability (SIPP)
  • 39% PWD say that the lack of financial resources is the most serious problem they face (NOD/Harris Survey 2000 )
  • Only 32% of individuals with severe disabilities between the ages of 18 to 64 worked full time or part time compared to 81% of people without disabilities--a difference of 49%(2000 Harris Poll NOD)
  • Even when PWD are employed, they earn significantly less than their non-disabled peers, roughly 72% to the dollar (NCD Report 1996)
  • On a National level, 1.8 million SSI recipients with disabilities between the ages of 18-64 have no banking relationship; 50.7% of SSI recipients do not have direct deposit of their monthly SSI checks (SSA 2002)
  • Less than 10% of PWD own their own homes, compared with 70% of Americans without disabilities (White House 2001)
  • One out of five adults with disabilities has not graduated from high school, compared to less than one of ten adults without disabilities (White House 2002 )

(See References on Asset Information for the Information Below)

  • 83% of PWD never claimed available tax credits and/or deductions related to work
  • Asset limits of SSI ($2,000) can entrench recipients in poverty
  • 54% of PWD had no checking account, 69% had no savings account, and 75% do not have loans with financial institutions
  • 33% of all American households have zero or negative net assets; 54% of Hispanic households have a similar status; 60% of African-American households have no net assets; For PWD, estimates are as high as 80%

Leaders in the field of economic empowerment for people with disabilities stress that opportunities offered by asset building programs have yet to be fully realized by the disability community. People with disabilities can feel entrenched in the benefits system as a source of survival, and the thought of owning their own home or starting their own business may seems like an unattainable dream. Yet, as the World Institute of Disability points out, that is exactly the potential that asset building programs offer our community - a realistic method for turning dreams into reality. Here are some ways that DPN s can help people with disabilities increase their financial literacy, learn more about asset development, and ultimately reach greater independence and self-sufficiency:

  • Reach out to financial institutions and Credit Unions to coordinate workshops for the disability community that provide financial education on banking, savings, budgeting, managing credit and debt, and securing loans. (Perhaps your local CWIC can co-facilitate these workshops!)
  • Reach out to your local AARP Tax-Aide, the nation’s largest, free, volunteer-run tax counseling and preparation service to coordinate workshops for the disability community to learn about the Earned ncome Tax Credit (EITC). This is a refundable tax credit that reduces or eliminates the taxes that low income working individuals and families pay (such as payroll taxes) and also frequently operates as a wage subsidy for low-income workers. (Any EITC payments a person receives will not be used to determine eligibility for the following benefit programs, or how much you can receive from these programs: SSI, Temporary Assistance for Needy Families, Medicaid, Low-income housing, and Food Stamps.)
  • Educate people with disabilities about Individual Development Accounts (IDAs), special savings accounts that are designed to help people build assets for increased financial self-sufficiency and long-term economic security. IDA holders save their own dollars in these accounts for a specified period of time. After reaching their individual savings goal, these savers receive matching funds to be used for a specific purpose. These purposes include, buying a home, postsecondary education, starting (or expanding) a small business.
  • Educate people with disabilities about home ownership assistance through loan and mortgage assistance for low-income individuals and families who are elderly and/or disabled offered by Housing and Urban Development (HUD).
  • Educate the disability community about the opportunities that microenterprise and entrepreneurship offer. Reach out to microenterprise development organizations (MDOs), which operate throughout the United Statesto support disadvantaged entrepreneurs as they start or expand their businesses. MDO s can increase the chance of business success by bridging the gap between disadvantaged individuals and the tools they need to start and grow successful businesses.

Note to DPN s: If you have comments, suggestions or questions relating to the above topic, please email DJ Diamond at ddiamond@ndi-inc.org. They may be added to this FAQ and the archived one on the One-Stop Toolkit website.


  RESOURCES:

ASSET BUILDING

National Disability Institute: Social and Economic Independence - http://www.ncbdc.org/pi_ndi.aspx

National Disability Institute is a non-profit, strategic partner working with the NCB Development Corporation to promote independence for persons with disabilities. To create opportunities and choices to end the cycle of poverty among Americans with disabilities, NDI collaborates with leaders from the federal government, business, disability, philanthropic, and financial communities to direct capital, expertise and innovative technical assistance in five critical areas:

  • Affordable and Accessible Housing
  • Business Start-up and Growth
  • Asset Development and Savings Strategies
  • Accessible Health Care Facilities and Services
  • Accessible Charter Schools and Expanded Educational Choices

The Real Economic Impact Tour – http://www.reitour.org/

The Real Economic Impact Tour (REI Tour) is a national initiative delivering free tax preparation and filing assistance, along with other asset building strategies to low-income persons with disabilities. The REI Tour is a public-private collaboration designed to provide Americans with disabilities insight, tools and resources to improve their lives through financial education, training and counseling. The REI Tour is designed to promote:

  • The real economic impact of persons with disabilities, by increasing the number of tax filers with disabilities and use of tax credits and deductions;
  • Building of local partnership network between persons with disabilities and their families; disability and community-based organizations, and companies that sponsor the Tour; and
  • Measurable economic growth in participating cities.

This ground-breaking effort has been the gateway for many to explore opportunities connecting them to financial independence. This is accomplished through community partnerships in more than 50 cities throughout the country linking consumers to non-profit organizations, federal agencies and private-sector companies.

Activities in each city will include:

  • Volunteer tax preparation assistance
  • Financial education classes
  • Training about access and use of public benefits
  • Special events to connect to financial institutions
  • Credit, debt, and homeownership counseling
  • Audio conference series to all stakeholders on issues regarding accessible sites, tax provisions and credits, public benefits and much more
  • Training about federal work incentives to promote self-sufficiency

The tangible outcomes of the 2007 REI Tour are program outreach and implementation projected to reach 25,000 new tax filers with disabilities who will receive $22 million dollars in refunds. In many cases, that additional income will play a significant role to lay a firm foundation for thousands toward financial independence. The assets obtained from the financial educational courses are improving the lives of persons with disabilities, their families and communities across the country.

World Institute on Disability Assets to Assets (and IDA programs) - http://www.wid.org/programs/#ida

Asset building is an anti-poverty strategy helping low-income people move toward greater economic independence by saving and purchasing long-term assets. Building assets, as opposed to increasing income, provides the stability to escape the cycle of poverty. The purpose of WID's Access to Assets project is to open doors for the disability community. Access to Assets bridges the gap between the asset building and disability communities through the following services:

  • Training and Technical Assistance: Advise asset building organizations on how to include consumers with disabilities in their programs.
  • Disability Community Outreach: Inform disability organizations about available programs and relevant federal policy.
  • Policy Analysis: Develop and influence federal asset building legislation conducive to the participation of people with disabilities.
  • Public Education: Distribute monthly EQUITY e-newsletters, which include articles from leaders in the field, program administrators, and participants in asset building programs. Also included are helpful tips, answers to questions about disability issues, periodic federal policy updates, and resources. Read current and past editions of EQUITY at: http://www.wid.org/equity
  • Information and Referral (I&R): Operate toll-free hotline serving individuals with disabilities seeking information on how to participate in poverty reduction programs.
  • Access to Assets Publications: http://www.wid.org/publications/#ida
  • Disability and Asset Building Communities Working Together, Equity e-newsletter: Summer 2006

http://www.wid.org/publications/?page=equity&sub=200607

The summer issue focuses on accessible financial literacy.

Assets for Independence (AFI) Project Locator - http://www.acf.hhs.gov/assetbuilding/states.html

The Office of Community Services supports more than 200 agencies and community-based groups across the nation that run AFI Projects and other programs to help low-income families build their economic assets. Click on a State name below to find an agency in your area. To see a grantee's most recent one-page fact sheet (if available), click on that grantee's name (when available, information from previous years also may be viewed by clicking on that year's link).

Access the URL to link to your state to contact the local project manager of the AFI agency in your area for information about what they do and how you can enroll in their program. If there are no projects near you, or if you would like more information, contact us at AFIprogram@acf.hhs.gov.

Asset Building - http://www.assetbuilding.org/
This Web site presents in-depth analyses of asset ownership in the United States and abroad,-its rationale, theory, and evidence as well as an array of policy proposals devised by New America and others. Also provided are links to research and policy centers and a catalogue of resources on asset-based policy, including pending policy proposals.


FINANCIAL LITERACY

AARP Tax Aide - http://www.aarp.org/money/taxaide/
The nation’s largest, free, volunteer-run tax counseling and preparation service.

Mymoney.gov - http://www.mymoney.gov/
MyMoney.gov is the United States government's website dedicated to teaching all Americans the basics about financial education. Whether you are planning to buy a home, balancing your checkbook, or investing in your 401k, the resources on MyMoney.gov can help you do it better. Throughout the site, you will find important information from 20federal agencies government wide.

Financial Literacy Information for Young People with Disabilities

NCWD/Youth- Issue 16, November 2005
http://www.ncwd-youth.info/resources_&_Publications/information_Briefs/issue16.html

Research shows that low educational attainment, employment expectations and confusing governmental programs with conflicting eligibility criteria have resulted in many young people with disabilities not making successful transitions from school to postsecondary education, employment and independent living. While many would like to learn how to save money and build assets, they fear getting a job and saving a portion of their income may cause them to lose their disability benefits and other supports, such as health care. Complex rules in current federal and state programs often create disincentives for these youth to seek employment or increase earnings and assets. One major obstacle that contributes to this issue is the lack of money management knowledge and skills or financial literacy among this group. This publication highlights federal and state initiatives that address financial literacy issues for young people with disabilities.


INDIVIDUAL DEVELOPMENT ACCOUNTS (IDAs)

National Federation of Community Development Credit Unions (NFCDCU) - http://www.natfed.org
A national membership organization of low-income credit unions that are eligible to apply for AFI grants. Information on the NFCDCU website includes credit union IDA activity and technical assistance.

ISED Consulting & Research - http://www.ised.org/consulting/IDA.asp
Consulting and research organization that specializes in IDA s for refugees and other asset-building strategies.

Center for Social Development (CSD) - http://gwbweb.wustl.edu/csd/
An academic center managed by Michael Sherraden at Washington University. CSD's website includes information and research on IDA s and their impact on the well-being of the poor.

  • Individual Development Accounts - http://www.cfed.org/focus.m?parentid=31&siteid=374&id=374
    Individual Development Accounts are matched savings accounts that enable low-income American families to save, build assets, and enter the financial mainstream. IDA s reward the monthly savings of working-poor families who are building towards purchasing an asset - most commonly buying their first home, paying for post-secondary education, or starting a small business. IDA s make it possible for low-income families to build the financial assets they need to achieve the American Dream. The match incentive - similar to an employer match for 401(k) contributions - is provided through a variety of government and private sector sources. Organizations that operate IDA programs often couple the match incentive with financial literacy education, training to purchase their asset, and case management.
  • This site exists to provide basic information on
    • starting and operating an IDA program,
    • resources and support services available to IDA practitioners,
    • federal policy that will take IDAs to scale,
    • new research on IDA s and asset building, and
    • events for the entire field.

Corporation for Enterprise Development (CFED) --http://www.cfed.org/
A national organization for the IDA industry. CFED's website brings most of the nation's IDA programs together, with such resources as a subsidiary web forum called the IDA Network http://www.cfed.org/focus.m?parentid=31&siteid=374&id=374. The site also includes the IDA Program Directory http://www.cfed.org/focus.m?parentid=31&siteid=374&id=599 that presents information about organizations that manage IDA programs, their accountholders, and key program elements.

Association for Enterprise Opportunity (AEO) - http://www.microenterpriseworks.org/
A national organization for entrepreneurship and microenterprise. AEO's website provides resources to promote enterprise opportunity for those with limited access to economic resources-including use of IDA's for microenterprise development.

Griffin-Hammis Associates, LLC - http://www.griffinhammis.com/welcome.asp Griffin-Hammis Associates offers a significant array of Self Employment training topics, as well as individualized technical consultation. Their preferred approach to building self-employment capacity as a funded service is to work with community rehabilitation agencies and various entities, such as University programs and state disability agencies (DD Councils, Mental Health Authorities, Vocational Rehabilitation, Workforce Investment Programs) over a period of at least a year. Over the 12-month period a program is designed to identify local small business resources; train support staff, families, and prospective business owners in such fundamentals as: Business Plan development, Business Idea Testing & Feasibility, Social Security Work Incentives applicable to Self Employment, Marketing and Sales, and Improving Operations through Systematic Instruction techniques.

SSA & OTHER WORK INCENTIVES – DPN AUDIO CONFERENCE SERIES

Serving as a Resource on SSA ’s Work Incentives & Other Programs that Can Impact the Employment of People with Disabilities

Other State Work Incentives & Programs that Can Impact Successful Employment\ Some of the resources created for the SSA Work Incentives series were intended for DPNs to gain a basic understanding of available work incentives and programs that can impact the successful employment of individuals with disabilities and their ability build assets. These resources include information on the following programs:
  • Individualized Development Accounts
  • Earned Income Tax Credit
  • SSI & Earned Income Tax Credit
  • Housing and Urban Development
  • Medicaid Buy-In Programs & Medicaid Waivers
  • Work Opportunity Tax Credit

If you area interested in obtaining a copy of any of these please contact DJ Diamond at ddiamond@ndi-inc.org

  REFERENCES ON DISABILITY STATISTICS:

  REFERENCES ON ASSET INFORMATION:

  • Ball, P., Morris, M., Hartnett, J. & Blanck P. (2005). Breaking the Cycle of Poverty: Asset Accumulation By People with Disabilities. Disability Studies Quarterly.
  • Mendelsohn, S. (2005). Role of the Tax Code in Asset Development for People with Disabilities. Disability Studies Quarterly.
  • Schmeling, J., Schartz, H. A., Morris M. & Blanck, P. (2005 ). Tax Credits and Asset Accumulation: Findings from the 2004 N.O.D./Harris Survey of Americans with Disabilities. Disability Studies Quarterly.

Note to DPNs: If you have comments, suggestions or questions relating to the above topic, please email DJ Diamond at ddiamond@ndi-inc.org . They may be added to this FAQ and the archived one on the One-Stop Toolkit website.