Susan Tachau, Director Pennsylvania AFP Philadelphia, PA stachau@patf

1. Current Legal Issues Facing Alternative Financing ProjectsAFP Program Directors MeetingMay 7, 2013 Susan Tachau, Director Pennsylvania AFP Philadelphia, PA stachau@patf.us James R. Sheldon, Jr., Supervising Attorney National AT Advocacy Project (a Catalyst Partner) Neighborhood Legal Services, Inc. Buffalo, N.Y. jsheldon@nls.org

2. Purpose of this Session • Indentify key legal issues sent by AFPs • Address these issues from perspective of attorney and director of a large AFP • Create ongoing dialogue on these issues. Caution: Analysis may very depending on individual facts and state-specific laws.

3. Will Focus Primarily on Issues Presented by AFP Staff Presenters will answer • Based on our experience, expertise • Providing references for more information • If outside our expertise, attempt to provide referral for good information What do you think about issue? • How have you resolved the issue in your state?

4. “Legal Capacity” Individual said to have legal capacity: • If he/she has cognitive ability to make decisions • In AFP context – Does individual understand “nature and consequences” of taking out a loan? No legal capacity: • Does not understand “nature and consequences” of taking out loan Limited legal capacity: • Not responsible to take out $20,000 loan. Can make decisions about need for items funded by loan.

5. Substitute Decision Makers- Governed by State Law Legal Guardian (usually by court order) • Full or total guardianship – guardian can make any decision that the individual could have made • Limited guardianship – guardian’s powers specifically limited by the guardian papers/court order • “Of the person” – e.g., guardian can decide matters relating to medical care, where person resides • “Of the estate” – decisions on matters related to money, buying/selling property

6. Guardian’s Liability for Loan A guardian may have authority to sign loan documents. • Depends on terms of guardianship Does guardian assume legal obligation for loan? • What does state law say about this? • Guardian can probably avoid liability by insisting on non-liability language in loan agreement. What is the goal of the AFP? • If looking to make guardian legally liable should have a candid discussion with guardian.

7. Substitute Decision Makers- Governed by State Law Power of Attorney • Person with legal capacity appoints another to take actions of their behalf • Example: Individual appoints family member to deposit and withdraw money. • General power: can do anything individual could do. • Limited power: defined by a list or checked boxes on form. Since this is voluntary it can be withdrawn.

8. Substitute Decision Makers- Representative Payee for SSI/SSDI Social Security Administration (SSA) appoints: • When beneficiary not capable of handling benefit payments. • Payee entrusted with paying bills, providing spending money to beneficiary, conserving unspent money • Payee periodically reports how funds have been managed. Powers payee does not have: • Responsible for Social Security/SSI only. • No power over other money, like wages from a job. • Limited ability to contract with vendors. • Probably no authority to take out loan. • Would have power to use SSI/SSDI to make loan payments, if primary needs (food and shelter) are met.

9. Can AFP Accept Fundsfrom Loan Vendors? Referral fees: • Always start with your grant terms. What do they say about accepting this kind of revenue? • Hard to think of a good justification for referral fee. Charitable contributions, support of AFP events: • Again, look at grant terms. • Sending vendor direct solicitation? Or are they showing up at annual agency gala advertised in newsletter? Goal: Avoid even appearance of impropriety.

10. Individual Defaults, Gets Behind on Payments Right to contact individual or guardian: • Assume good AFP practice is to communicate when loan appears to be in trouble. • Contact is legal unless specific law (state or federal) or terms of contract would disallow. Fair Debt Collection Practices Act • This federal law applies to “third party” collectors. • Places many limits on collection activity; probably will not apply to any AFPs.

11. When to Look to Traditional Medicaid vs Medicaid Waiver Looking to make bathroom accessible: • Will be challenge through traditional Medicaid. • Argue it meets state durable medical equipment definition and medical necessity tests. Will every state have a Medicaid waiver? • Every state has one or more home and community based service waivers. • See AT Advocate newsletter on issue - www.nls.org/Disability/NationalAssistiveTechnologyProject/ATAdvocateNewsletters/ATAdvocateFall2007

12. Will HCBS Waiver FundBathroom Modification? Illinois “Persons with Physical Disabilities Waiver” • http://www2.illinois.gov/hfs/MedicalPrograms/HCBS/Pages/disablities.aspx • “Environmental accessibility adaptations” covered Ohio “Individual Options Waiver” • “Environmental accessibility adaptations” specifically include “modifying bathrooms to be wheelchair-accessible” • See “Individual Options Waiver Handbook” at https://doddportal.dodd.ohio.gov/INF/finditfast/publications/Documents/IO%20Waiver%20Handbook,%20New%20Rev.%207-15-11.pdf

13. Educate Yourself on HCBSWaivers in Your State • Who qualifies? • Often targeted to a specific population (e.g., developmentally disabled, traumatically brain injured) • What AT is covered? • Examples: home and vehicle modifications, environmental adaptations, blind/visual disability aids • Unlike traditional Medicaid, waiver can set dollar limits • Limits may be by service category or include all services • May be dollar limits for the year or lifetime limits • Waiver policy may allow exceptions to dollar limits

14. Identifying the HCBS Waivers in Your State Go to State Medicaid Website: • Look for waivers in menus or use search function Kaiser Family Foundation Website (www.kff.org) • Go to www.statehealthfacts.org • Select state from map • From menu, select “Medicaid and CHIP” • From new menu, select “Home and Community-Based Services” • Should give you detailed information on HCBS waivers.

15. Loans for Person on SSI Will loan proceeds count as “unearned income”? • No! SSI regulations make this clear. Will loan proceeds count against $2,000 asset limit? • If still in account as of first of next month, yes! Avoiding $2,000 asset limit: • AFP hold money in escrow, pay vendor(s) directly. • Other lender pay vendor(s) directly. • If there is approved Plan for Achieving Self Support (PASS), deposit in the separate PASS account.

16. Key Exempt Assets in SSI Program • Full/partial ownership of home beneficiary resides in. • Vehicle, of any value, if used by beneficiary or household member for transportation. • All household goods and personal effects. Up until 2004, there was $1,500 limit. • Tools needed in trade or business

17. SSI’s Plan for Achieving Self Support (PASS) Karl’s need for van and modifications: • Karl is disabled, uses a wheelchair, and receives $620 in Social Security, $97 in SSI. • He needs a modified van to travel to and from work after college graduation in 4 years. • The van will cost $24,000 and the modifications will cost $28,000. • Assume the state vocational rehabilitation agency will fund the modifications but not the van purchase. • Is there a way for Karl to use the PASS to pay for the van?

18. Karl’s Use of the PASS Karl proposes a PASS: • He will place $600 per month into a special bank account to save toward the van purchase. • His goal is to become an elementary teacher. • With 40 months of savings he will have enough to purchase the van (40 x $600). • He will purchase the van during the spring of his last year of college, having saved the full $24,000. • Social Security approves the PASS. How can Karl purchase the van much earlier to drive to internships or summer jobs?

19. Using a PASS in Combinationwith an AFP Loan Karl goes to the state AFP after saving $9,000. • Karl qualifies for a $15,000 loan to purchase the van. • Will no combine the PASS savings and the proceeds of the loan to purchase the van after only 15 months of savings. The need for a revised PASS: • Karl must submit a revised PASS proposal. • He proposes to use the AFP loans and PASS savings to obtain the van earlier. • He proposes to use PASS savings to pay off the loan. • The VR agency will pay for the van modifications.

20. The PASS and Other Benefits • Medicaid – If person not on SSI before PASS approved, Medicaid now automatic for SSI recipient in 39 states. • Food stamps, section 8 housing – money set aside in PASS account will not be counted by either program. • So $600 in Social Security that goes into PASS account is invisible for both programs.

21. SSI’s PASS – What if BeneficiaryDefaults on Loan Payments? Consider practical solution: • This would be benefits counselor’s job if available.* • If individual has hit a bump in the road, PASS terms can be altered to make PASS more realistic. Can AFP work with individual and benefits counselor? • Renegotiate payment schedule? • Rescue payments? *Effective 8/1/13, Social Security once again funding Work Incentives Planning and Assistance (WIPA) projects.