Center for Workers with Disabilities Conference Linking Asset Development Strategies for People with

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Center for Workers with Disabilities
ConferenceLinking Asset Development Strategies
for People with Disabilities

• Michael Morris
• Associate Director, Law, Health Policy, and
  Disability Center (LHPDC)
• University of Iowa
• Director, National Disability Institute
• NCB Development Corporation
• Mmorris_at_ncbdc.org [phone]
• November 2004

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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.

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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.

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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.

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The Challenges

• 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)
• 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)
• Only 37 of adults with significant disabilities
  are participating in the nations workforce.
  (National Health Interview Survey, 2000)

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The Challenges, continued

• Even when people with disabilities are employed,
  they earn substantially less than their
  non-disabled peers, roughly 72 to the dollar
  (NCD 1996 Report)
• 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)
• 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)

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The Challenges, continued

• Less than 10 of people with disabilities own
  their own homes compared with 70 of Americans
  with no disabilities.
• One-third of students with disabilities do not
  finish high school.
• People with disabilities enroll in post secondary
  education at half the rate of the general
  population.

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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.

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Current PicturePeople with Disabilities

• Less Educated
• More likely to be dependent on fixed income and
  government benefits
• More likely to live below poverty levels
• Less likely to have assets
• Less likely to be employed full time

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Introduction to Asset Development Strategies
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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.

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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)

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Strategies that Promote Asset Development

• Individual Development Accounts (IDAs)
• Financial Literacy
• Affordable Financial Services
• Tax Policies
• Self-Directed Accounts

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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.

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Assets for Independence Act

• Congressional 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.

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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.

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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

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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.

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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.

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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.

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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.

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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

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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)

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Refundable Credit EITC

• Credit offsets any tax liability
• Excess received as refund

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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.

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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.

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Link to Assets

• Unbanked
• Financial Literacy
• Other Family Support Programs
• Investment Opportunities

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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.

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Community Based Partnerships
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Next Generation Opportunities

• Historical Context
• Realign Social Policies and Practices
• Next Generation Self-Directed Accounts

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Historical Context

• 1990 Passage of the Americans with Disabilities
  Act
• End isolation and segregation
• Promote full community participation
• 1999 Olmstead Supreme Court Decision
• Title II of the ADA requires States to expand
  support for community options
• 2001 New Freedom Initiative
• Tear down barriers to equality
• Build systems capacity

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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

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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.

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Principles of Self-Determination

• Person centered plans
• Individual budgets
• Individual choice of supports and providers
• Financial management services.

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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

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Blended Self-Directed Account

• Bundling public benefits across the domains of
• Housing
• Personal assistance
• Social security
• Employment
• Skills development and
• Asset building.

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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.

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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.

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Agreement on Account Objectives

• Respond 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.

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Recommendations
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Recommendations

• 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.
• Reach agreement on the scope and boundaries of
  each program/benefit that may be bundled in a
  self-directed account.

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Recommendations, Continued

• Simplify and coordinate procedures for
  application, determination of eligibility,
  development of people centered budgets, and
  multiple points of entry.
• Identify potential pilot sites at a community
  level and public-private partner work groups to
  realign roles, relationships, and
  responsibilities.

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Recommendations, Continued

• Focus on
• Capacity building
• Education and training
• Policy alignment
• Private sector participation
• Interdepartmental collaboration and
• Needed coordination and technical assistance.

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Recommendations, Continued

• Build on existing relationships
• State IDA Network
• Microenterprise Loan Providers
• Financial Education Providers
• BPAO Benefit Specialists
• Disability Program Navigators and
• Other Service Coordinators.

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Evaluation

• Quantitative and qualitative research needs to
  answer several questions.
• When current resource tests are altered or
  waived, what improvements result in social and
  economic status for individuals with
  disabilities?
• What outcomes result from self-directed accounts
  related to savings, asset building, employment
  status, community participation, housing choices,
  and other quality of life issues?
• What permanent policy and infrastructure changes
  are needed to support self-directed accounts?

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Evaluation, continued

• What oversight and quality control mechanisms are
  needed to minimize risk, protect public
  resources, and improve consumer satisfaction?
• What incentives can be offered to improve
  multiple public system coordination and private
  sector investment in self-directed accounts?
• Do self-directed accounts reduce dependence on
  government benefits, encourage income generation,
  and asset building?
• Does financial education and benefits counseling
  support informed decision making and improved
  management of resources?

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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.

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Further Information

• Private Sector Groups
• The New America Foundations AssetBuilding.org
  www.assetbuilding.org
• The Corporation for Economic Development
  www.cfed.org
• CFEDs IDA Network www.idanetwork.org

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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

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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

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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-newsletterwww.onestoptool
  kit.org/resourceoftheweek.cfm
• The World Institute on Disability www.wid.org
• Equity e-Newsletter -- www.wid.org/publications/?p
  ageequity

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Further Information, Continued

• Federal Government Sites
• The Internal Revenue Service www.irs.gov
• Earned Income Tax Credit information --
  www.irs.gov/individuals/article/0,,id96466,00.htm
  l
• The Federal Deposit Insurance Corporation
  www.fdic.gov
• The Money Smart Program www.fdic.gov/consumers/co
  nsumer/moneysmart/index.html