Center for Workers with Disabilities Conference
Linking Asset Development Strategies for People with Disabilities
Michael MorrisAssociate Director, Law, Health Policy, and
Disability Center (LHPDC)University of Iowa
Director, National Disability InstituteNCB – Development Corporation
[email protected] (202) 521-2930November 2004
Law, Health Policy, and Disability Center Established 10 years ago to improve
understanding and impact of employment and related public policy.
Particular focus on the relationship of federal and state policy to advance individual self-determination, personal , and economic freedom.
Study of the impact of the ADA on business practices and culture.
National Disability Institute Established in November 2001 as part
of National Cooperative Bank and NCB Development Corporation.
NCB has directed more than $1.5 billion in loans or investments to low-income communities nationwide.
Particular focus on affordable housing, small business development, access to health care and educational choice through charter schools.
National Disability Institute -- Vision
To provide leadership nationwide for innovative capital development and other capacity building strategies that expand social and economic options for low-income Americans with Disabilities.
The Challenges1. One out of every three adults with disabilities live
in very low income households as opposed to one of every eight non-disabled adults (NCD 1996 Report)
2. Lack of money is a serious problem among people with disabilities:
68% say it is a problem 39% say that the lack of financial resources is
the most serious problem they face. (NOD/Harris Survey 2000)
3. Only 37% of adults with significant disabilities are participating in the nation’s workforce. (National Health Interview Survey, 2000)
The Challenges, continued4. Even when people with disabilities are employed,
they earn substantially less than their non-disabled peers, roughly 72% to the dollar (NCD 1996 Report)
5. Public assistance represents 59% of the total income of people with significant disabilities and only 8% of the total income of people who have no disability. (Harris Survey 2002)
6. On a National level, 1.8 million SSI recipients with disabilities between the ages of 18 and 64 have no banking relationship; 50.7% of SSI recipients do not currently direct deposit their monthly checks. (SSA 2002)
The Challenges, continued
7. Less than 10% of people with disabilities own their own homes compared with 70% of Americans with no disabilities.
8. One-third of students with disabilities do not finish high school.
9. People with disabilities enroll in post secondary education at half the rate of the general population.
Asset Poverty Varies Significantly by Race and Gender 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 persons with disabilities,
estimates are as high as 80%.
Current PicturePeople with Disabilities
1. Less Educated2. More likely to be dependent on fixed
income and government benefits3. More likely to live below poverty
levels4. Less likely to have assets5. Less likely to be employed full time
Introduction to Asset Development Strategies
Definition of Assets Capacities and resources that
enable individuals to identify, choose, and implement activities that enhance the quality of life experience.
Capacities and resources can be further explained by defining individual assets.
Definition of Individual Assets – Three Parts Individual financial assets (money,
stocks, real and personal property) Income Assets (job) Human capital assets (skills,
knowledge, and experience gained from education and training)
Strategies that Promote Asset Development Individual Development Accounts
(IDAs) Financial Literacy Affordable Financial Services Tax Policies Self-Directed Accounts
Private and Public Initiatives Assets for Independence Act of 1998,
Federally funded initiative; American Dream Demonstration
(“ADD”) of 1997, Corporation for Enterprise Development Foundation Site Demonstration
Multiple State and local initiatives; Over 25,000 Americans are saving
money in IDAs and there are an estimated 500 IDA projects nationwide.
Assets for Independence ActCongressional Findings Economic well being does not come solely
from income, spending, and consumption. It also requires savings, investment and accumulation of assets.
Assets can improve economic stability and independence, connect individuals with a viable and hopeful future and stimulate development of human and other capital.
Individual Development Accounts Matched Savings Accounts – match
earned income; Two Thousand Dollars Per Individual
– Federal IDA; Required Financial Literacy Training; Targeted Goals for Savings; Managed through CBOs, Banks,
Faith Based Organizations.
How IDAs Work $1 of savings could = $2 to $4 in matched
by private and public institutions. IDAs managed by community
organizations, and the accounts are held at local financial institutions
Participation includes economic literacy training to improve credit, to create a budget and savings schedule and to develop long-term management skills
Individual Development Accounts: Eligibility and Uses 200% of poverty level – $18,000 for a
family of three; EITC, TANF eligible. Uses for home ownership, post-
secondary education and small business start-up.
Some other uses – home repair, vehicle ownership [state IDAs].
Working people with disabilities eligible for SSI and SSDI are participating in IDAs in small numbers.
Activities Individuals create personal savings
plans; IDA accounts established; Money management courses
completed; Establish and save at or above
monthly targets; and Meet asset goals.
Early Research Findings Low income individuals can and will save and
accumulate assets; Participants in ADD save an average of $25 per
month; IDAs have been successful in promoting
economic stability and educational attainment; Data collection has not focused on
identification of IDA participants with disabilities;
Not a target population for current IDA demonstrations.
Financial Literacy: Five Principles for Successful Financial Education Programs
Seek behavioral change not just improved knowledge;
Focus on practical information; Address values as well as knowledge; Provide opportunities to learn by
doing; Coordinate and collaborate to meet
those with the most pressing needs.
What is the Earned Income Tax Credit
Federal tax benefit designed to assist low and moderate income workers in increasing their financial stability
Reduces taxes for workers Supplements wages Makes work more attractive
EITC Facts and Figures Provides a maximum credit of up
to $4,300 for working families with less than $34,458 in earned income
Over 21 Million working families and individuals received over $37 billion in EITC in 2002 (average refund of $1,770)
Refundable Credit – EITC
Credit offsets any tax liability Excess received as refund
Why is EITC Education & Outreach Needed?
25% of families fail to claim the credit.
Limited education, language & financial abilities;
IRS efforts in the past have failed to reach all eligible families;
Affirmative Action is required to access EITC and other tax credits.
Why Free Tax Preparation Services are Needed Inability of families to prepare own
return. Nationally, 61% of EITC recipients
used paid preparer. Potential link to asset building
opportunities.
Link to Assets “Unbanked” Financial Literacy Other Family Support Programs Investment Opportunities
Linking the Pieces Outreach – Reach eligible families
not currently claiming the credit. Free Tax Preparation – Preserve
the value of the credit. Asset Building – Introduce
financial literacy and link to other supports at tax preparation sites.
Community Based Partnerships
Awareness and Education
Tax Preparation
AssetBuilding
Community- Based
Coalitions
Next Generation Opportunities Historical Context Realign Social Policies and
Practices Next Generation Self-Directed
Accounts
Historical Context1990 Passage of the Americans with
Disabilities ActEnd isolation and segregationPromote full community participation
1999 Olmstead Supreme Court DecisionTitle II of the ADA requires States to expand support for community options
2001 New Freedom InitiativeTear down barriers to equality Build systems capacity
Historical Context, Continued
2001-2004 CMS Real Choice Systems Change Grants
Improve Community Based Service Systems Transition from institution to community Expand personal assistance services Respond to direct service worker shortages Promote consumer direction Improve agency collaboration Focus on quality improvement
Three Goals for Systems Change For Children and Adults of Any Age Who Have a Disability Live in the most integrated community
setting appropriate to their individual support requirements;
Exercise meaningful choices about their living environment, the providers of services they receive, the types of supports they use, and the manner by which services are provided; and
Obtain quality services in a manner as consistent as possible with their community living preferences and priorities.
Principles of Self-Determination Person centered plans; Individual budgets; Individual choice of supports and
providers; Financial management services.
New Strategies Individual Budgets – CMS Individual Development Accounts – HHS Work Incentives – SSA Cash-Out Benefits – VR, MH, Education Individual Training Accounts – Labor Housing Choice Vouchers – HUD Use of Earned Income Tax Credits – IRS
Blended Self-Directed Account
Bundling public benefits across the domains of:
Housing; Personal assistance; Social security; Employment; Skills development; and Asset building.
Collaboration Across Systems Multiple points of entry to start an
account. Benefits specialists are available
who are knowledgeable about multiple public benefits and successful approaches to bundling in a self-directed account.
Fiscal intermediaries are available to offer efficient financial management.
Collaboration Across Systems, continued Opportunities are created to
encourage private match to earned and unearned savings with direct tax benefits to the donor and account holder.
Individual self-directed budget is personal and portable.
Agreement on Account ObjectivesRespond to multiple personal, individualized goals including:
Self-employment; Employment related supports; Affordable housing and homeownership; Education and skills development; Health care and emergency needs; and Savings for specific short and long-term
needs: (a) Transportation, (b) Technology, and (c) Retirement.
Recommendations
Recommendations1. Establish an Interdepartmental Work
Group with consumer and family participation to design a policy friendly environment and infrastructure to support pilot testing of IDAs and blended self-directed accounts.
2. Reach agreement on the scope and boundaries of each program/benefit that may be bundled in a self-directed account.
Recommendations, Continued
3. Simplify and coordinate procedures for application, determination of eligibility, development of people centered budgets, and multiple points of entry.
4. Identify potential pilot sites at a community level and public-private partner work groups to realign roles, relationships, and responsibilities.
Recommendations, Continued
5. Focus on: Capacity building; Education and training; Policy alignment; Private sector participation; Interdepartmental collaboration; and Needed coordination and technical
assistance.
Recommendations, Continued
6. Build on existing relationships State IDA Network; Microenterprise Loan Providers; Financial Education Providers; BPAO Benefit Specialists; Disability Program Navigators; and Other Service Coordinators.
EvaluationQuantitative and qualitative research needs to answer several questions.
1. When current resource tests are altered or waived, what improvements result in social and economic status for individuals with disabilities?
2. What outcomes result from self-directed accounts related to savings, asset building, employment status, community participation, housing choices, and other quality of life issues?
3. What permanent policy and infrastructure changes are needed to support self-directed accounts?
Evaluation, continued4. What oversight and quality control mechanisms
are needed to minimize risk, protect public resources, and improve consumer satisfaction?
5. What incentives can be offered to improve multiple public system coordination and private sector investment in self-directed accounts?
6. Do self-directed accounts reduce dependence on government benefits, encourage income generation, and asset building?
7. Does financial education and benefits counseling support informed decision making and improved management of resources?
Unprecedented Opportunities Make a commitment to self-direction and
asset building objectives; Reduce disincentives to work; Increase individual choice and control; Align policy and infrastructure to support
informed decision making and efficient financial management; and
Advance social and economic independence.
Further Information
Private Sector Groups The New America Foundation’s
AssetBuilding.org – www.assetbuilding.org
The Corporation for Economic Development – www.cfed.org
CFED’s IDA Network – www.idanetwork.org
Further Information, Continued
Private Sector Groups, cont. The Center on Budget and Policy
Priorities – www.cbpp.org National Community Tax Coalition
– www.tax-coalition.org National Cooperative Bank –
Development Corporation – www.ncbdc.org
Further Information, Continued
Private Sector Groups, cont. National Disability Institute –
www.nationaldisabilityinstitute.org Law, Health Policy, and Disability
Center – disability.law.uiowa.edu Master My Money –
www.mastermymoney.org
Further Information, Continued
Research Centers & Email Newsletters Law, Health Policy, and Disability Center of
the University of Iowa – Disability.law.uiowa.edu
One-Stop Toolkit – www.onestoptoolkit.org Resources of the Week e-newsletter–
www.onestoptoolkit.org/resourceoftheweek.cfm The World Institute on Disability –
www.wid.org Equity e-Newsletter --
www.wid.org/publications/?page=equity
Further Information, Continued
Federal Government Sites The Internal Revenue Service – www.irs.
gov Earned Income Tax Credit information --
www.irs.gov/individuals/article/0,,id=96466,00.html
The Federal Deposit Insurance Corporation – www.fdic.gov The Money Smart Program –www.fdic.gov
/consumers/consumer/moneysmart/index.html
Top Related