Asset Development Part 1:

Basics and Strategies

2011 Training Series

Hosted/Facilitated by: DJ Diamond

Presented by: Elizabeth Jennings

Guest Presenter: Michael Morris

NDI Technical Assistance Team

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According to the SGA, states were required to choose at least two service delivery components as a primary focus for their grant implementation. Asset Development, as a service delivery component was selected by six of the nine DEI projects.

Training and Technical Assistance to DEI Projects in understanding and implementing the Asset Development Service Delivery Component is provided under U.S. DOLETA contract with NDI Consulting, Inc. and the National Disability Institute (NDI).

Evaluation of the impact of the DEI Projects implementation and outcomes of Asset Development Strategies will be provided under U.S. DOL ODEP contract with Social Dynamics.

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Upon completion of this webinar, DEI Project staff will:

Better understand the economic status of individuals with disabilities in America

Better understand the basic principles of Asset Development including what Asset Development is, why it is important and how it relates to the Disability Community.

Better understand strategies that support financial stability including Financial Literacy, Tax Incentives and Savings Opportunities

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Asset Development Basics and Strategies Asset Development Basics and Strategies Learning ObjectivesLearning Objectives

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Review statistics related to the economic status of individuals with disabilities in America

Discuss the basic principles of Asset Development

Briefly examine Financial Literacy, Tax Incentives and Savings Opportunities

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Renewed focus on low wage workers

Shift from employment to financial stability

Increased understanding of the impact of healthcare costs on individual finances

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Poverty numbers started to increase and in 2008 were their highest since 1997.

Significant research by the Annie E. Casey Foundation and others showed progress when certain strategies (as we will describe) were applied within concentrated low income communities.

Federal initiatives aligned with strategies that supported short and long-term asset development.

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Whether it is access to:◦ A quality education◦ Effective transition from school to work◦ Affordable (accessible) 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

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Nationally, in 2008, 25.3% of people with disabilities have an income that falls below the federal poverty level compared to 9.6% of people without a disability.

Erickson, W. Lee, C., & von Schrader, S. (2010). 2008 Disability Status Report: New York. Ithaca, NY: Cornell University Rehabilitation Research and Training Center on Disability Demographics and Statistics. www.disabilitystatistics.org

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People with disabilities are more likely to be unemployed and to live in poverty than any other single demographic group in the United States today.

Public benefit programs for people with disabilities, especially Supplemental Security Income (SSI), are not aimed at increasing assets and independence for people with disabilities.

More so then any other population on a fixed income, services and policies do not hold the expectation of economic self-sufficiency.

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The presence of a disability and the need to maintain a public benefit should not require one to forfeit their economic stability and live in poverty. Without knowledge, guidance and encouragement, individuals are not empowered to earn, learn, save and build.

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Economic Empowerment is a series of strategies that has the potential to:

◦ help people with disabilities improve their economic stability,

◦ decrease stress and financial crisis in an individual’s life◦ expand opportunities for community participation, and ◦ positively impact an individual’s quality of life experience.

The notion that employment is one goal NOT the only goal.

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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

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◦Public attitudes – including our own fear of finances

◦Low expectations of and within the disability community, and

◦Current partnerships don’t support savings and building a financial future.

◦Regulations discourage saving for the future; retirement, emergencies, etc.

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Post-secondary Education

Employment

Self-employment

Micro-Enterprise

Home Ownership

Family Self-Sufficiency Programs

Individual Development Accounts

Assistive Technology Loan Funds

Student Loans

Retirement Accounts

Use of work incentives

Use of tax incentives

Volunteer Income Tax Assistance

Earned Income Tax Credit

Financial Literacy

Budgeting

Credit Repair

Getting Banked

Medicaid

Buy-In

Programs

Protection and Advocacy, Taxpayer Advocates, Credit Counseling

Volunteer Income Tax Assistance, WIPA

The Strategies ExistThe Strategies Exist

1. Increase Financial Literacy2. Claim relevant SSA Work Incentives3. Claim the Earned Income Tax Credit4. Promote matched savings account (IDA)

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Federal Resources - http://www.mymoney.gov/

FDIC provides FREE Financial Literacy Curriculum - Money Smart and Money Smart for Young Adults Not Copyrighted, can be customized by you to meet

your needs. Available in Braillehttp://www.fdic.gov/consumers/consumer/moneysmart/

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Work Incentives that increase income

Work Incentives that increase resources

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Student Earned Income Exclusion Impairment Related Work Expense Blind Work Expense 1619b Subsidy PASS Medicaid Buy-In

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Plan to Achieve Self-Support (PASS)

Property Essential to Self-Support (PESS)

Medicaid Buy-In

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The Earned Income Tax Credit (EITC) is a credit for people who earn low-to-moderate incomes. EITC can reduce your taxes, and can mean a refund. In simple terms, working families and individuals may keep more of what they work for.

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The EITC is a refundable credit. What this means is that if you qualify based on your income, even when you have no tax liability, you will receive a tax refund.

You must file your taxes to receive this refund, even if you do not have any tax liability.

If you are filing for the EITC for the first time, you may file to claim the credit for a three-year period.

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Earned Income and adjusted gross income (AGI) must be less than:• $43,998 ($49,078 married filing jointly) with three or more qualifying children• $40,964 ($46,044 married filing jointly) with two qualifying children• $36,052 ($41,132 married filing jointly) with one qualifying child• $13,660 ($18,740 married filing jointly) with no qualifying children

Tax Year 2010 maximum credit:• $5,751 with three or more qualifying children• $5,112 with two qualifying children• $3,094 with one qualifying child• $464 with no qualifying children

Investment income must be $3,150 or less for the year.

*For more information on whether a child qualifies you for the EITC, see IRS Publication 596, Chapter 2.

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(Preview) 2011 Tax Year EITC (Preview) 2011 Tax Year EITC

Must have a valid Social Security Number You must have earned income from employment or from self-

employment. Your filing status cannot be married, filing separately. You must be a U.S. citizen or resident alien all year, or a

nonresident alien married to a U.S. citizen or resident alien and filing a joint return.

You cannot be a qualifying child of another person. If you do not have a qualifying child, you must:◦ be age 25 but under 65 at the end of the year,◦ live in the United States for more than half the year, and◦ not qualify as a dependent of another person

Cannot file Form 2555 or 2555-EZ (related to foreign earn income)

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The money received as a result of the EITC can be used to build assets. By saving the money, or part of the money received as a result of the EITC, one can begin to build assets. ◦For example, the money received as a result of the

EITC could be used to establish a relationship with a financial institution (e.g. Opening a Savings or Checking Account).

Persons now have the ability to split the refund they receive in up to three different accounts making saving the money easier than ever.

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Income ‘Exclude from income any EITC payments received either as

an advance or as a refund’

Resources Any unspent Federal tax refund or payment made by an

employer related to an EITC is excluded from resources for the 12 calendar months following the month the refund or payment is received.

SSI Income - https://secure.ssa.gov/poms.nsf/lnx/0500820570 SSI Resource - https://secure.ssa.gov/poms.nsf/lnx/0501130675

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The IRS is working with diverse community partners to establish VITA Sites to help prepare tax returns and help people claim the EITC.

By offering these services free of charge it provides the opportunity for persons to file their taxes and take advantage of the Earned Income Tax Credit at no cost to them.

In 2010, VITA saved taxpayers with disabilities $36.2 million*.

*Includes 100 REI Tour cities only.

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National Disability Institute’s REI Tour demonstrates the impact of VITA on individuals with disabilities.

In 2010….◦ 100 Tour cities targeted outreach to individual with disabilities◦ 360,499 Tax Returns were prepared for free◦ $38.5 million dollars in EITC refunds were received◦ $351.5 million dollars in tax refunds were received◦ $72.0 million dollars in tax preparations fees were saved

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File For Free!!!

The VITA Program offers free tax help to low- to moderate-income (generally, $49,000 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 1-800-829-1040.

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Individual Development Accounts (IDAs) are matched savings accounts that allow individuals with limited income and limited wealth to save money and to build assets.

The IDA Provider partners with Financial institutions, foundations, churches, private donors, and state and local governments to fund the matches to the personal savings of IDA holders (usually at a rate ranging from $1 to $8 for each dollar saved).

For example, an IDA program with a 2:1 match would provide $2 for every $1 dollar saved in the IDA, $1000 saved in the IDA would receive a $2000 match.

Participate in a matched savings Participate in a matched savings account (IDA)account (IDA)

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An IDA can be used to purchase 1. a home2. higher education and training3. business capitol

o Federally funded IDA programs require that participants enroll in financial education classes. Most projects require at least 12.5 hours of training before a proposed asset can be purchased.

o The IDA provider may also provide connections to credit counseling, VITA services, EITC and public benefit enrollment. These services provide an individual the opportunity to increase their ability to earn, budget and save towards their goal.

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You must have earned income and meet the program’s income guidelines.

For AFI IDAs, the individual must:o be eligible for Temporary Assistance for Needy Families, or receive

TANF, at the time of application, OR

o have an adjusted gross household income equal to or less than 200 percent of the Federal poverty level and have a household net worth less than $10,000 (excluding the value of a primary dwelling unit and one motor vehicle),OR

o be eligible for the federal Earned Income Tax Credit.

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Programs can vary in several ways….o Target populationo Program requirementsoMinimum investmentoMinimum/maximum amount saved each montho Length of required savingso Savings goal (may be more limited or broader)

It’s important to know up front the program rules and whether or not the program is TANF or AFI funded.

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Assets accrued in an IDA established using TANF or AFIA money can not, under Federal regulations, negatively impact an individual’s eligibility for federal programs. The individual’s contributions, matching contributions, and interest can not be considered as an asset when determining eligibility or benefit levels for federal benefit programs like Social Security, Medicaid and Food Stamps.

Assets for Independence Act, Section 415, codified at 42 U.S.C. 604 note and Social Security Act, Section 404(h)(4), codified at 42 U.S.C. 604(h)

SSI does not count the individual’s contributions, matching contributions, and interest as a resource.

SSI also excludes the individuals contribution from their countable earned income.http://www.ssa.gov/ssi/spotlights/spot-individual-development.htm

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Assets for Independence (AFI) Program - IDAresources.org Issues of particular importance to individuals with

disabilities are addressed at www.idaresources.org/disability

IDA Providers - http://idaresources.org/Map

Call the Provider near youAsk about their program requirementsVerify IDA slots are openVerify they are using their slots for the asset you are seeking to

buildApplyConnect with a WIPA/Benefits Planner to report to SSA that you

are participating in an IDA program

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Move from accepting poverty in exchange For public assistance to expecting equality of opportunity, full participation, independent living, and economic self-sufficiency.

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that individuals with disabilities live at significantly higher rates of poverty than other Americans.

what Economic Empowerment is and why it is important for people with disabilities.

strategies that currently exist to support low-wage workers

next time, we will discuss the role of DRCs in supporting individuals with disabilities to earn, learn, save and build.

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This webinar will focus on implementation of Asset Development Strategies at the local level as they pertain to the role of the Disability Resource Coordinator (DRC). This presentation will include strategies DRCs can employ to promote Asset Development including activities such as getting involved in local and regional Earned Income Tax Credit (EITC) committees, connecting with the Real Economic Impact (REI) Tour where and when appropriate, introducing financial literacy curriculums and/or access to financial literacy, connecting with local Individual Development Account (IDA) providers, helping the disability community connect to mainstream financial institutions like banks and credit unions etc.

Registration: Note all NDI hosted webinars are based on Eastern Time (ET).

Monday, April 25th (3:00pm – 4:30pm EST) Registration: In order to register go to:

https://ndi.webex.com/ndi/onstage/g.php?t=a&d=962556406

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Elizabeth JenningsNational Disability Instituteejennings@ndi-inc.org

DJ DiamondNational Disability Instituteddiamond@ndi-inc.org

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