Building Assets

1
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

2
Introduction

• Asset Building Rationale
• Conceptual Model
• Strategies, particularly IDAs
• Systems and Process Model
• Examples

3
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

4
Asset Building Programs People with
Disabilities

• Utilization Very low utilization of asset
  building programs by people with disabilities --
  especially within Medicaid buy-ins. 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.

5
Conceptual Model

• Principles
• Self-determination/ Self Direction
• Asset-Building
• Full Accessibility to Services and Supports
• Peer Solidarity

6
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

7
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

8
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

9
What are Financial Assets?

• 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)

10
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

11
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.

12
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

13
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

14
Other mechanisms for asset building

• Independence Building Accounts
• Special Needs Trusts
• Not owned by beneficiaries

15
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

16
SSPA 2003, cont.

• Effective June 2004, disregard
• All education related income,
• scholarships,
• fellowships, and
• gifts income.
• Excluded as an SSI resource for 9 months

17
Assets for Independence Act

• Passed with bipartisan support in 1998
• Designed to provide funds to states for
  Individual Development Accounts
• 11 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.

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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.

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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.

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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.

21
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.

22
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

23
Asset Based Training

• Home Ownership
• Postsecondary education
• Self employment

24
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

25
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.

26
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

27
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.

28
Peer Support

• Savings clubs and buying coops
• Managing illness and financial wellness
• Organization skills
• Navigating marketplace
• Working toward goals

29
Certified Credit Counseling

• Credit history recommendations
• Spending Savings Plans
• Credit Use and management
• Survival skills in the marketplace
• Preparing for asset goal

30
IDA Resources

• The New America Foundations Asset Building
  www.assetbuilding.org
• CFEDs 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

31
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

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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.

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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.

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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
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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
36
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

37
NHCLF-IDA Impact in NH

• 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.

38
NHCLF- IDA Impact

• IDA Funds have leveraged 20,184,162.99 in asset
  purchases!
• 80 of clients are below 50 of HUDs Area Median
  Income (AMI)
• 17 of participants were unbanked when they
  enrolled in the Program
• Over 55 had previously received TANF

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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.

40
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

41
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

42
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.

43
State Based Resources

• Tobey Davies - t.partch-davies_at_snhu.edu
• Abby Cooper - cooplind1_at_comcast.net
• JoAnne Malloy - Jmmalloy_at_aol.com
• Megan ONeil - megan_at_wid.org
• David Foster - david.foster_at_hcs.state.or.us
• Joe Entwisle- jentwisle_at_hdadvocates.org