Asset Building for Individuals with Disabilities
Public benefit programs for people with disabilities, especially Supplemental Security Income (SSI), are not aimed at increasing assets and independence for people with disabilities as a result individuals with disabilities often have very limited income and few, if any, assets. The intent of asset building initiatives is that as individuals develop assets, they will be able to move out of poverty and remain out of poverty. Many asset building services for people with disabilities will NOT cause loss of critical SSA disability cash payments and essential health insurance such as Medicaid or Medicare.
Types of asset building services for people with disabilities:
- Financial literacy education
- IDAs: Individual Development accounts
- Earned Income Tax Credit (EITC)
- College Savings Accounts
- ABLE account
- Work Incentives from SSA: WIPA program and work incentives like PASS, Plan to achieve self-support and Self-employment/entrepreneurship.
Skills and knowledge that successfully enable low and moderate income individuals to become part of the mainstream financial system by learning to effectively manage their finances, participate in banking services, and save for assets and other financial goals. The Federal Deposit Insurance Corporation (FDIC) recognizes the importance of financial education, particularly for people with little or no banking experience. That’s why they created Money Smart, a training program to help adults outside the financial mainstream enhance their money skills and create positive banking relationships. Check this financial literacy training resource: MoneySmartCurriculum
AFI Individual Development Accounts (IDAs)
One federally-supported IDA program is the Assets for Independence (AFI) program. The AFI IDA program is a discretionary grant program authorized under the Assets for Independence Act of 1998. AFI Individual Development Accounts are an important tool in asset building for low-income people. AFI projects assist client families to save earned income in IDAs– special matched savings accounts. For more information and to find a agency close to you, please visit Office of Community Services – Assets for Independence Clients can use their IDA savings and matched funds to acquire one of the following assets:
- A first home,
- Capitalization of a small business,
- Post-secondary education or training.
Earned Income Tax Credit (EITC)
Refundable federal income tax credit for low-income workers. EITCs enable many low-income tax filers to receive a refund from their payroll taxes on their annual income. To claim the credit, it is necessary for individuals to file their income taxes and apply for federal and / or state EITCs. Some facts:
- SSI and SSI-Medicaid – EITC payments are excluded from the resource test for nine months following the month the refund is received.
- SSDI – there is no asset limit.
- State Medicaid – This can vary by State so please check with your local Medicaid office.
- Food Stamps – EITC payments are excluded from the resource test.
- Federally assisted housing – interest accrued on your EITC payments may count as income.
- Cash assistance programs – These can vary so please check with your local office.
For more information about Earned Income tax credit visit www.irs.gov/eitc
- College Savings Accounts – Special savings accounts that enable families to save for the costs of college at an accelerated rate.
ABLE accounts will allow more individual choice and control over spending on qualified disability expenses and limited investment decisions, while protecting eligibility for Medicaid, SSI, and other important federal benefits for people with disabilities.
States have started to develop their own legislation to implement the federal law. As a result, in over half of the states, ABLE Act legislation has emerged in the past several months. To assist individuals with disabilities, their families, and advocates in tracking their states’ progress, The Arc has produced a comprehensive listing of state-by-state legislation. This can be used as an advocacy tool and offers valuable information, such as names and contact information of sponsors, current status of the bill(s), and a link to bill language. Go here for more information:
Work Incentives Planning and Assistance
The Ticket to Work and Work Incentives Improvement Act of 1999 authorized Social Security to award grants, contracts or cooperative agreements to provide community-based work incentives expertise to beneficiaries of Social Security or Supplemental Security Income benefits based on disability. The goal of the WIPA program is to enable beneficiaries with disabilities to make informed choices about work, and to support working beneficiaries to make a successful transition to self-sufficiency. You may find contact information for these projects on http://choosework.net.
I believe that if we all work together on education, support, and advocacy we can make asset buildup a reality for people with disabilities and low income families.