Accessible Assets Asset Building and the Disability Community Karen Harris Supervising Attorney Hannah Weinberger-Divack Asset Building Specialist

Shriver Center The Sargent Shriver National Center on Poverty Law A national law and policy center that provides national leadership in identifying, developing and supporting innovative and collaborative approaches to achieve social and economic justice for low-income people. Community Investment Unit Takes action against poverty by advocating for policies that expand asset-building opportunities for all.

Asset Poverty Asset poverty focuses on total household wealth, rather than just income An “asset poor” household does not have enough assets to meet its expenses for 3 months if no outside sources of income

Asset Poverty in Illinois 21.8% of residents are asset poor 14.1% experience extreme asset poverty Illinois ranks 25 th in the country in asset poverty, and 29 th by race

Asset Poverty 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%.

Source: Selected Disability Measures By Selected Age Groups 2005 (numbers in thousands)

Source: Selected Disability Measures By Selected Age Groups 2005 (numbers in thousands)

Labor Force Statistics from the Current Population Survey Employment Status and Disability Status October

Working Age People (25-61) with Income Below the Annual Poverty Line in 1997 By Disability Status 1 or More Disabilities No Disabilities Source: Peiyun She and Gina A. Livermore, “Long-Term Poverty and Disability Among Working- Age Adults,” Journal of Disability Policy Studies 2009; 19; 244.

Working Age People (25-61)Experiencing Long-Term Income Poverty (more than 36 months over a 4 year period) by Disability Status 1 or More Disabilities No Disabilities Source: Peiyun She and Gina A. Livermore, “Long-Term Poverty and Disability Among Working- Age Adults,” Journal of Disability Policy Studies 2009; 19; 244.

What We Know: Research Findings and Existing Barriers

Research Findings IDAs One of the most common asset building programs is the Individual Development Account (IDA). An IDA is a matched savings account that allows low-income families to save for homeownership, education, or entrepreneurship. IDAs that are federally funded through the Assets for Independence Program (AFI) can be used to save for a home, education, or start or expand a small business. Though funded by the government, AFI IDAs are administered by local nonprofits who partner with financial institutions to actually deliver the program.

Research Findings IDAs American Dream Demonstration Project Study Low income households saved more on average than higher income individuals. IDA participation encouraged feeling confident about the future, feeling economic security, as well as a sense of control over ones’ life. Participants with disabilities Saved significantly less on average, per month, than those without disabilities Only one institutional characteristic (out of three) – participation in asset specific financial education was significantly related saving performance

Research Findings Credit Union Savings Programs Cash and Counseling Credit Union Programs Respondents with disabilities can save within context of a credit union for purchase of services for assets with potential to enhance their independence and social functioning Goods and services saved for varied considerably: Back-up for respite Emergency service Computer/technological services Home modifications Assistive devices Exercise equipment

Existing Barriers Barriers to savings include: Lack of banking experience Lack of knowledge of basic operations of financial institutions General financial illiteracy Distance from banking institutions Limited access to technology and internet

Existing Barriers

17 Existing Barriers: Federal Asset Limit Reform H.R. 2419: Farm, Nutrition & Bioenergy Act of 2007 Strengthens food stamp benefit increases by raising resource limits significantly and by restoring eligibility to more vulnerable groups currently left out H.R. 3172: Freedom To Save Act of 2007 Eliminates asset tests for SSI, SHIP, and TANF; raises Food Stamp asset limit to $6,000 and exempts all vehicles

18 Existing Barriers: State Asset Limit Reform States have authority to eliminate asset tests in TANF and Medicaid and, with USDA approval, in Food Stamp Program States can implement asset limit reform by legislation or administrative rule Several states have implemented asset test reform See “Reforming State Rules on Asset Limits,” Clearinghouse Review (Mar-Apr 2007), State Asset Limit Toolkit, and CFED Resource Guide

Existing Barriers : Lack of Access to the Financial Mainstream

Successful Asset Building Programs

REI TOUR Purpose -- Increase knowledge about and access to tax filing and financial services through fee tax assistance and other asset building strategies. Goal -- To increase the number of people with disabilities that receive the EITC payment. Organization -- Operates through EITC and VITA coalitions which: Commit to develop a disability workgroup Provide volunteer tax preparation assistance Participate in monthly calls during tax season, REI Tour audio conference series, and yearly National Mayor’s Academy Participate in coalition’s financial education and asset building programs

REI Tour Earned Income Tax Credit (EITC) Between ages Less than $40,463 for married taxpayers with one child, $45, 295 for two children, and $48,279 for three or more children Single taxpayers less than $18,440 Temporary increase to $5,657 for married taxpayers with three or more qualifying children EITC payment can be as much as 25% of income

REI Tour Outcomes YEARCITIESPARTNERSREFUNDS PREPARED TAX REFUNDS RECEIVED $$ SAVED ,600$6.8 mil$1.5 mil ,223$15.3 mil$3.4 mil ,275$32.6 mil$7.2 mil ,653$81.0 mil$18.1 mil ,152$176.6 mil$36.2 mil TOTAL: 332,903 $312.3 mil $66.4 mil

Allies, Inc. Success of Saving (SOS) A saving program engaged in the fight to reverse endemic poverty among people with disabilities in New Jersey. The program is modeled after Assets for Independence, a Federal program. The goals of SOS are to: Reduce barriers to full participation in the economy and increase personal economic self-sufficiency through the use of banking and other financial services among people with disabilities, Establish integrated approaches to employment, wealth creation and asset management, Evaluate the promotion of wealth creation and asset management among people with disabilities, and, Reduce rates of poverty and reliance on public assistance by increasing overall access to capital to people with disabilities.

Allies, Inc. SOS Program Program offers matched savings accounts to provide an incentive for attending and completing financial literacy coursework with case management services provided by Allies, Inc. Unlike AFI IDA programs, savers may save for any asset goal (furniture, television, vacation, engagement ring, etc.) Savings accounts are opened jointly between Allies, Inc. and the saver. Because Allies, Inc. acts as the corporate fiduciary of these accounts, funds deposited are ineligible for consideration of Social Security benefits.

Allies Inc. IDA Program Project American Dream An IDA program created to: Deliver financial literacy and wealth building strategies to people with disabilities and the staff who support them. Approved uses of funds Home ownership Business development Higher education

Asset for Independence Program Funding The Assets for Independence (AFI) program is the primary source of Federal funds for IDAs AFI has funded nearly 65,000 out of the approximately 85,000 savers to date Authorization for AFI expired in 2003, and nearly every IDA program in the country has a waiting list Take action by sending a letter on your organization's letterhead to Senator Burr who sits on the HELP Committee asking his support of AFI reauthorization

Prospects for the Future

Achieving a Better Life Experience (ABLE) Act of 2009 H.R & S. 493 (February 26, 2009) Introduced by Sen. Robert Casey (D-PA) and Rep. Ander Crenshaw (R-FL) Purpose: To encourage & assist individuals & families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life To provide secure funding for disability- related expenses on behalf of designated beneficiaries with disabilities that supplement, not supplant, public benefits

ABLE Accounts vs. Special Needs Trust Funds Beneficiary can be trustee (also family members, financial institutions, and other qualified 3rd parties) Contributions up to $2,000 per year per individual are tax deductible (similar to 529 College Savings Accounts- not refundable) Contributions can be made by anyone- including the beneficiary (does not count as ‘earned income’ by SSI) No contributions can be made after beneficiary turns 65 Can pay for Housing- including rent & mortgage

ABLE Act of 2009 One tax exempt account per SSI beneficiary up to $500,000 Allowable expenses include: Preschool & postsecondary education; tutoring; special education services; training; Employment supports; Personal assistance and community-based supports; Respite care; Assistive technology and home modifications; Out-of-pocket medical, vision, or dental expenses; Transportation vehicle purchases or modifications; Insurance premiums; Habilitation and rehabilitation services; and Other services or products allowed by regulation

ABLE Act Resources For full text of the bill, type “ABLE Act of 2009” under Search Bill Summary & Status at: Take Action: go to and click on the Federal Initiatives tab

Asset Building Resources Asset Poverty Information Corporation for Enterprise Development Asset Limit Reform State Asset Limit Toolkit Corporation for Enterprise Development

Asset Building Resources Asset Building Coalitions Illinois Asset Building Group Asset Coalition Toolkit for States (ACTS) Accessible Assets Webinar Resource Page - extras/asset-building-disability-webinar