Asset Development Basics Asset Development Webinar Series – Part I February 17, 2009

Objectives Learn about assets and asset development and why they are important to people with disabilities Discuss ways to save and build assets through financial literacy and education Review other asset development basics: – Earned Income Tax Credit - Split Refunds – VITA Locations – Local Earned Income Tax Coalitions – Real Economic Impact Tour How the DPN fits in – Role of the Navigator

What do we know about people with disabilities and poverty: Disability Poverty Statistics In the year 2007, an estimated 28.6 percent (plus or minus 1.3 percentage points) of civilian non- institutionalized, men and women with a work limitation, aged in the United States lived in families with incomes below the poverty line. In other words, 4,140,000 out of 14,474,000 (or about one in 4) civilian non-institutionalized, men and women with a work limitation, aged in the United States lived in families with incomes below the poverty line. Bjelland, M.J., Erickson, W. A., Lee, C. G. (2008, November 8). Disability Statistics from the Current Population Survey (CPS). Ithaca, NY: Cornell University Rehabilitation Research and Training Center on Disability Demographics and Statistics (StatsRRTC). Retrieved November 17, 2008 from

What do we know about people with disabilities and poverty? According to a NCD report, in 1996 one out of every three adults with disabilities lived in very low income households as opposed to one out of every eight non-disabled adults. – In 2007, the median income of households that included any working-age people with disabilities was $38,400 compared to $61,000 of households that did not include any working age people with disabilities, representing a $22,600 difference. According to the 1996 NCD report, even when people with disabilities were employed, they earned substantially less than their non-disabled peers, roughly 72 ¢ to the dollar – In 2007, working-age people with disabilities were almost three times as likely to be living in poverty compared to people working without a disability.

What do we know about people with disabilities and poverty? (Continued) Lack of money is a serious problem among 68% of people with disabilities: – 39% of people with disabilities say that the lack of financial resources is the most serious problem they face. (NOD/Harris Survey 2000 and 2004) 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) Less than 10% of people with disabilities own their own homes compared with 70% of Americans with no disabilities.

Asset Poverty Varies Significantly by Race and Gender 33% of all American households have no assets or are in debt. 54% of Hispanic households have a similar status. 60% of African American households have no net assets. 80% of persons with disabilities have no net assets.

Disability and Poverty Whether it is access to: – A quality education – Effective transition from school to work – Needed transportation, housing, technology or long-term supports Enduring poverty and lack of economic empowerment will: – Diminish choices and quality of life within communities, and – Singularly diminish freedom, opportunity, and self- determination

Assets and Asset Development What are they? Why are they important?

What are Assets? Money you have in the bank Cash on hand Securities (shares) (retirement accounts, other investments) Property you own Owner equity in a home or business Furniture and appliances Miscellaneous items (jewelry, cars, etc.) Whatever is owed to you Education level and work experience

What is Asset Development? Asset Development is a series of strategies that has the potential to: – help people with disabilities improve their economic status, – expand opportunities for community participation, and – positively impact the quality of life experience

Why is Income Preservation and Asset Development Important? To a person with a disability, saving money and developing assets will produce choices that directly impact their quality of life, especially regarding: – mental and physical health – positive self-concept and level of community participation – expectations and status with other community stakeholders

Asset Development…a way out To design a roadmap out of poverty for individuals with disabilities, there needs to be a change in: – public attitudes, – new expectations in the disability community, and – new partnerships that support savings and asset building

Asset Development Myths ….and the Facts

Change Public Attitudes – Three Myths People with disabilities are unable to work. - Work produces income which is the first step towards saving and building assets. People with disabilities have all their needs met by their special programs. – People with disabilities want to reduce their reliance on government benefits and have more freedom and independence. People with disabilities can’t be expected to save and build assets. – People with disabilities want a better economic future. They are starting businesses and becoming homeowners.

Changing Public Attitudes: Knowledge is Power One of the ways to help the public understand the importance of saving and building assets is through increasing financial literacy. – Many people with disabilities (and people without disabilities) lack the basic understanding of finances and are afraid to save or build assets due to income eligibility and asset limits associated with public benefit programs. – It is essential for all people to understand the basic financial principals associated with being economically self-sufficient and the way to do that is through financial education.

Financial Literacy and Education Strategies to – “save” and – “build” assets

Financial Literacy: What organizations provide financial education? Financial Institutions – Banks – Credit Unions Community Colleges Consumer Credit Counseling Service Other community nonprofit groups One-Stop Career Centers

Financial Literacy: Money Smart In 2001, the Federal Deposit Insurance Corporation (FDIC) launched a national financial education program called Money Smart. – The purpose of Money Smart is to provide money management skill-building and create positive relationships with banks. – Money Smart has ten modules that take between one and two hours to complete.

Financial Literacy: Money Smart (continued) Modules: 1. Bank On It – covers types of insured financial institution, types of accounts, and the differences between check-cashing businesses and banking institutions. 2. Borrowing Basics – covers loans and credit. 3. Check It Out – covers the ins and outs of a checking account and its features. 4. Money Matters – covers the benefits and how-to’s of saving. 5. Pay Yourself First – covers ways to save money.

Financial Literacy: Money Smart (continued) Modules: 6. Keep It Safe – covers laws that protect banking consumers and shows how to protect your money. 7. To Your Credit - covers the ins and outs of credit reports and repair. 8. Charge It Right – covers the basics of credit card use. 9. Loan To Own – covers the types of installment loans and how to pick the best loan for your needs. 10. Your Own Home – covers the merits of owning a home over renting and steps to take to prepare for homeownership.

Financial Literacy: Money Smart (continued) Money Smart is available in Braille and larger print. An online version is available on the FDIC website : The FDIC also has a Community Affairs Liaison for each region. The Community Affairs Liaison is often willing to travel to various locations in the region to facilitate a “Train the Trainer” workshop, so interested parties can learn how to facilitate the Money Smart training program. – To find out more information on how to coordinate a “Train the Trainer” Workshop in your area please visit the following website:

Asset Development Basics

Other Asset Development Basics In addition to knowing about assets and the importance of financial literacy… There are some other basic facts everyone should know when it comes to asset development.

The Earned Income Tax Credit (EITC) The EITC is the largest federal support program for low income individuals and families. The EITC helps over 15 million low-income wage earners each year. The EITC is a refundable credit. What that means is that based on your income, even when you have no tax liability, you will receive a tax refund. An individual with no tax liability must file a tax return. Without filing, you cannot receive an EITC tax refund.

The Earned Income Tax Credit (EITC): Basic Facts You must have earned income. You must be at least 25 and under 65. You must have earned no more than $12,880 in the 2008 calendar year if you are single. You must have earned no more than $15,880 if married without children. If single or married and a household with one or more children, the income limit is substantially higher-up to $41,646. To be eligible for EITC you must earn no more than $2,950 in investment income.

The Five Myths of EITC You have to be married or have children to be eligible. False You have to owe taxes to be eligible. False You do not have to file to get your tax refund. False The EITC refund will impact my other public benefits. False You cannot be self-employed and receive the EITC. FALSE

Tax Preparation Assistance The IRS Stakeholders Partnerships Educations and Communication (SPEC) Division is responsible for outreach to eligible individuals and families to help with tax preparation assistance. In 350 communities nationwide the IRS is working with diverse community partners to establish Volunteer Income Tax Assistance (VITA) Sites to help prepare tax returns and help people claim the EITC.

Tax Preparation Assistance The VITA Program offers free tax help to low- to moderate-income (generally, $42,000 and below) people who cannot prepare their own tax returns. Certified volunteers sponsored by various organizations receive training to help prepare basic tax returns in communities across the country. VITA sites are generally located at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations. Most locations also offer free electronic filing. To locate the nearest VITA site, call

The Real Economic Impact (REI) Tour As was previously mentioned the IRS SPEC Division has been performing outreach to low-income persons and families to promote the EITC and VITA programs, so the National Disability Institute in cooperation with the IRS SPEC and other partners established, the Real Economic Impact Tour to reach low-income taxpayers with disabilities. The Real Economic Impact Tour, “REI Tour”, is a national, public/private initiative assisting low income persons with disabilities with asset building strategies, free tax preparation and filing assistance.

REI Tour (continued) In the 2008 tax filing season REI Tour partners prepared over 90,000 returns in 62 different cities accounting for over $81 million in refunds that people with disabilities received. In cities will participate in the REI Tour with the expectation of preparing 180,000 tax returns and returning $150 million in refunds. REI Tour:

Disability Program Navigators How can you assist with asset development: – Resource? – Facilitator?

The Navigator’s Role… As a Navigator, part of your role is to be a resource. – Asset Development is a crucial piece of economic self-sufficiency and greater community participation and choice. – It is essential for a Navigator to understand what Asset Development is and some of the basics in order to connect job seekers and One-Stop Career Center staff to the right resources.

The Navigator’s Role… In many towns/cities there are local coalitions who work on Asset Development issues, as a Navigator, participation in that coalition is key. If there is not a coalition who works on these issues, perhaps there is an already established committee who may be willing to make Asset Development an issue for a sub- committee.

The Navigator’s Role… The REI Tour is visiting 84 cities this year, check to see if a city you cover is on the tour by using the link provided If a city you cover is on the tour, click on the link to find the local contact information and contact the local contact to discuss how you as a Navigator may be of assistance.

The Navigator’s Role… Work with key One-Stop Career Center staff (such as the WIA Counselor and Case Management staff) to educate them about the EITC and how it may be beneficial to One-Stop customers. The Navigator can also act conduit for access to financial literacy education to promote asset development.

Assets and Asset Development So, today we learned…

Review Today we talked about what Asset Development is and why it is important for people with disabilities. We also discussed the Earned Income Tax Credit (EITC), Volunteer Income Tax Assistance (VITA) Sites, and the Real Economic Impact (REI) Tour. In our next session we will discuss how these strategies can be used as part of a larger plan to acquire assets. Finally, we discussed the Navigator’s role in all of this and we will continue to discuss the Navigator’s role in the next session.

Contact Information DJ Diamond Michael Roush Elizabeth Jennings