430 likes | 702 Views
Building Assets November 9, 2006 JoAnne Malloy, Institute on Disability, University of New Hampshire Tobey Davies, MS Southern New Hampshire University 2006 NCHSD Fall TA Conference Introduction Asset Building Rationale Conceptual Model Strategies, particularly IDAs
E N D
Building Assets November 9, 2006 JoAnne Malloy, Institute on Disability, University of New Hampshire Tobey Davies, MS Southern New Hampshire University 2006 NCHSD Fall TA Conference
Introduction • Asset Building Rationale • Conceptual Model • Strategies, particularly IDAs • Systems and Process Model • Examples
The Problem • Criteria for important health and income assistance programs for people with disabilities create systemic barriers to entering competitive employment and moving out of poverty – creating asset wealth: • Individuals must show that they cannot work enough to “earn a living” {SGA}, so “disability” = “inability to work” This is in obvious contradiction to what people with disabilities say they want and exactly what grants like the MIGs are designed to address
Asset Building Programs & People with Disabilities • Utilization: Very low utilization of asset building programs by people with disabilities -- especially within Medicaid buy-in’s. Programs are largely marketed to other low-income populations (TANF). • Integration with work incentives: Existing asset building tools can work in conjunction with each other AND with other work incentives programs. • Program implementation: People with disabilities often have trouble accessing information on how to enroll and participate in asset building programs.
Conceptual Model Principles: • Self-determination/ Self Direction • Asset-Building • Full Accessibility to Services and Supports • Peer Solidarity
Outcomes • Value of Assets is Increased • Decreased Consumer Debt • Individuals Make Progress Toward Their Financial Goals • Financial Literacy is Increased • Employment • Increased Economic Empowerment and Control
Strategies • Work Incentives and Benefits Counseling • Employment Development and Supports • Micro-Enterprise Development • Earned Income Tax Credit • Extended Medical Eligibility (Buy Ins) • Individual Development Accounts • Financial Literacy • Specialized Financial Services • Debt Restructuring • Trusts
Referral/Entry points • Community development Corporations • Banks and Credit unions • Housing organizations • Business development • VITA & AARP sites • Benefits Planners/VR/case managers • Asset Building Coalitions
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 Individual financial assets (money, stocks, real and personal property) Income Assets (job) Human capital assets (skills, knowledge, and experience gained from education and training) What are Financial Assets?
“Making Work Pay”(Center on Budget and Policy Priorities, 2003) Earned Income Tax Credit • Work incentive for workers and self employed • Available to child & childless singles. • Must file for taxes
EITC, cont. Even workers whose earnings are too small to have paid taxes, can still get EITC. - employer-paid disability benefits qualify as earned income - Adult children may qualify as “qualifying child” & also meet Child tax credit. Refunds from EITC is often the most money filers have at any one time and can equal up to 40% of some filers annual income.
Medicaid Buy In Programs • Work incentive: Maintaining healthcare coverage for workers • Sliding fee scale for premiums • Higher Income and asset standards for Medicaid eligibility • Individuals are allowed to save more
Social Security Work Incentives • SSI 2 for 1 disregard • Impairment related work expenses • Self-employment exclusions and deductions • Student Earned Income Deduction • Plans for Achieving Self Support • Property Essential for Self-Support • Un-incurred Business Expenses
Other mechanisms for asset building • Independence Building Accounts • Special Needs Trusts* *Not owned by beneficiaries
Social Security Protection Act 2003 For a period of 9 months…. • Disregard retroactive checks from SSA for SSI eligibility • EITC refunds • Child Tax Credit refunds
SSPA 2003, cont. Effective June 2004, disregard: • All education related income, • scholarships, • fellowships, and • gifts income. Excluded as an SSI resource for 9 months
Assets for Independence Act • Passed with bipartisan support in 1998 • Designed to provide funds to states for Individual Development Accounts • 1:1 match • Eligible: EITC eligible; 200% of poverty; eligible for TANF; or SSI eligible. • Must work or have an eligible working member of the same household.
Individual Development Accounts • Time-limited Matched Savings Accounts – match earned income; • Two Thousand Dollars Per Individual – Federal IDA ***( there is a growing number of “non-federal” IDAs); • Required Financial Literacy Training; • Targeted Goals for Savings; • Managed through CBOs, Banks, Faith Based Organizations.
How IDAs Work • $1 of savings could = $.50 to $8 in dollars 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, creation of a budget and savings schedule and the development of long-term management skills.
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.
Federal Exclusion from Means Tested Eligibility • Social Security policies allow for: • Exclusion of $$$ the individual puts into the IDA from monthly SSI calculation • Exclusion of resources saved in the IDA account • Exclusion of interest $$$S earned on deposits for TANF and AFIA IDAs
Asset Based Training • Home Ownership • Postsecondary education • Self employment
Financial Literacy • An essential element of successful asset building strategies. • Even when incentives to save and invest are strong, most individuals of low and moderate income lack the basic knowledge to manage their income, avoid excessive debt, and build assets. **** A trained work incentives counselor must be on the team for individuals with disabilities
Money Smart and the FDIC • In July 2001, the FDIC began offering Money Smart, a comprehensive financial education program. • The target audience is adults outside the financial mainstream to develop improved financial skills and positive banking relationships. • The curriculum is available for free from the FDIC website and Train-the-Trainer programs are available through many banks and credit unions nationwide. • It is available online and in multiple languages.
Access to “Micro-enterprise” Supports • Financial counseling for individuals who are starting their own businesses • Includes peer support: lending clubs, etc. • Individuals with disabilities have additional resources and challenges: • SSA Work incentives for self-employed individuals • Must be careful to know about SSA work incentives and communicate with SSA
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.
Peer Support • Savingsclubs and buying coops • Managing illness and financial wellness • Organization skills • Navigating marketplace • Working toward goals
Certified Credit Counseling • Credit history & recommendations • Spending & Savings Plans • Credit Use and management • Survival skills in the marketplace • Preparing for asset goal
IDA Resources • The New America Foundation’s Asset Building – www.assetbuilding.org • CFED’s IDA Network – www.idanetwork.org • Center for Social Development: www.gwbweb.wustl.edu/csd • Center on Budget & Policy Priorities: www.cbpp.org • The Abilities Fund – www.abilitiesfund.org • Association for Community Action Now – www.acorn.org
Work Incentives Planning and Assistance (WIPA) • Individuals with disabilities have to plan carefully around asset development strategies- • Assessment of current benefits/financial situation • Income projections and work incentive options • Information and referral • Follow up as needed
So What?Can we Achieve Financial Independence For Persons With Disabilities? 1. EXPAND KNOWLEDGE Empower individuals with disabilities to manage personal resources and improve informed decision-making about credit, savings, tax credits/provisions, banking services and asset development. 2. CHANGE POLICY Remove disincentives to work, home ownership, long-term services and supports, and business ownership for building assets that are part of state and federal public policy for working people with disabilities.
Financial Independence For Persons With Disabilities 3. PROVIDE INCENTIVES Create incentives to savings with IDAs and match to earned income set aside for continuing education, microenterprise start up, and home ownership objectives. 4. NATIONAL OUTREACH AND TRAINING Improve utilization of financial and tax services by individuals with disabilities through outreach to local disability organizations, providers of services and non-profit and private sector organizations.
Pursue employment and work incentives planning and assistance. Charting Path to Asset Wealth Get job Are you interested in Financial Literacy training Is individual interested in saving toward a goal such as post-secondary education, first home purchase, or business start-up? Assist with tax preparation and filing for the EITC. Does individual qualify for an IDA or PASS? Get Financial Literacy in conjunction w/Benefits Counseling & incorporate PASS & IDA Write PASS or IDA
Asset Building Programs Work Together • All of these programs are not exclusive • Programs can work together to compound the same amount of earnings • Polar opposite of public programmatic policy Public Return To Work Policy Same amount of earned income = Deductions in SSA cash benefits Deductions in HUD voucher Deductions in food stamps Deductions in childcare assistance Asset Building Policy Same amount of earned income = Can be matched by SSA in PASS Can be matched again in IDA Can be added to EITC refund Can be filed for free at local VITA
Referral/Entry points • Community Development Corporations • Banks and Credit unions • Housing organizations • Business development • VITA & AARP sites • Benefits Planners/VR/case managers • Asset Building Coalitions
778 Total Enrolled 345 Active 274 Homeownership 35 Education 33 Small Business 3 Other 275 Withdrawn/Term 158 Graduated 132 Homeownership 8 Education 9 Small Business 9 Other Those 778 participants received 13,844 hours of training. NHCLF-IDA Impact in NH
NHCLF- IDA Impact • IDA Funds have leveraged $20,184,162.99 in asset purchases! • 80% of clients are below 50% of HUD’s Area Median Income (AMI) • 17% of participants were unbanked when they enrolled in the Program • Over 55% had previously received TANF
Role for MIG in Asset Building Programs Assess (map) existing asset building programs and resources. • Develop mechanisms and capacities for agencies and programs to work together • Develop outreach materials and strategies to reach more individuals with disabilities • State-level systems change and policy development.
MIGs and Asset Building Programs • Intertwined goals of Asset Building Programs, WIPAs & MIGs: • Both programs support and encourage employment • Both create an environment that works toward financial empowerment • Financial literacy prepares individuals future for competitive employment
Implications • Entry points vary • Interaction of long term supports to obtain and maintain asset (s) • Long time to save • Incremental process • Must interact with career development • Knowledge transfer across counseling methods (VR, BP, CM, etc.) • Benefits counseling
Asset Building: Creating Opportunities to become part of the “Ownership Society” • Connecting asset development with employment builds a concrete out of poverty. • The challenge of benefits counseling in the future is to recognize and support asset development strategies as the most powerful incentive to work.
State Based Resources • Tobey Davies - t.partch-davies@snhu.edu • Abby Cooper - cooplind1@comcast.net • JoAnne Malloy - Jmmalloy@aol.com • Megan O’Neil - megan@wid.org • David Foster - david.foster@hcs.state.or.us • Joe Entwisle- jentwisle@hdadvocates.org