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Accessible Assets

Accessible Assets. Chicago’s Tax and Asset Building Work for People with Disabilities. Karen Harris Supervising Attorney . Shriver Center. The Sargent Shriver National Center on Poverty Law

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Accessible Assets

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  1. Accessible Assets Chicago’s Tax and Asset Building Work for People with Disabilities Karen Harris Supervising Attorney

  2. 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. • Asset Opportunity Unit • Takes action against poverty by advocating for policies that expand asset-building opportunities for all. www.povertylaw.org

  3. 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

  4. Asset Poverty • 1 in 5 U.S. families are asset poor and in Illinois it is 1 in 4. • 1/3 of U.S. households have zero or negative assets. • 60% of African Americans and 54% of Hispanic households experience asset poverty. • As many as 80% of households with a disability have zero assets.

  5. Selected Disability Measures By Selected Age Groups 2005 (numbers in thousands) Source: http://www.census.gov/prod/2008pubs/p70-117.pdf

  6. 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.

  7. Existing Barriers Multiple barriers exist for people with disabilities to participate in asset building opportunities: • Policy barriers that preclude saving, restrict earnings, and complicate even low levels of employment • Programmatic barriers include design structures and lack of accommodations • Psychosocial barriers of stigma, discrimination, and individual’s misconceptions about their own abilities to work, earn, and save

  8. Asset Limit Rules • AABD - $2,000 per individual, $3,000 per couple • GA - $2,000 per individual, $3,000 per couple • HBWD - $25,000 per household • LIS - $8,100 per individual, $12,910 per couple (full subsidy); $12,510 and $25,010 (partial subsidy) • SSI - $2,000 per individual, $3,000 per couple • TANF - $2,000 per individual, $3,000 per couple

  9. Federal Asset Limit Reform • SSI Savers Act of 2010 (H.R. 4937) • Introduced by Rep. Niki Tsongas (D-MA) • Revise Asset Limits: • $5,000 per individual, $7,500 per couple • Index to inflation • Education savings accounts excluded

  10. 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

  11. Lack of Access to the Financial Mainstream • 68% of SSDI recipients & 51% of SSI use direct deposit • 39% of SSI recipients reported never having a bank account • 68% of SSI recipients are unbanked compared to the national average of 8% • SSI recipients represent the largest percentage of federal benefit recipients that receive their payment via check

  12. Asset Building Strategies for the Disability Community • PASS Plan • Individual Development Accounts • Homeownership Coalition • Assistive Technology Financial Loan Programs

  13. PASS Plan • Beneficiaries can write a plan that SSA approves to set aside earned or unearned income to meet an occupational goal, such as starting a business, attending school, or supporting their current or prospective employment • The income or resources set aside for this goal will not count to determine the amount of SSI monthly benefits

  14. PASS Budgeting • Total Income $700 (SSDI) - Income not counted -300 (PASS) - 20 (exclusion) ___________________ _____ = Countable Income $380 • SSI Federal Benefit Rate $694 - Countable Income -380 ____________________ _____ = SSI Benefit $314

  15. Individual Development Accounts • Matched savings accounts (1-4 times) operated by service providers or institutions • The income limit to participate is usually 200% of FPL • Typically savings are designated for a goal of either purchasing a home, starting a business, or attending school • Participants receive financial literacy training

  16. Combining IDAs and PASS Plans Hector receives $700 in SSDI benefits. He writes a PASS Plan which SSA approves that includes setting aside $300 per month in an IDA to start a business. Hector receives a 2:1 match in his IDA program. The PASS Plan will allow for Hector to receive a total monthly benefit amount of $714 and he will have $600 per month of savings for his goal.

  17. Federal IDA Reform • Assets for Independence Reauthorization Act of 2010 (H.R. 6354) • Raises the authorization limit to $75 million • Simplifies asset purchase processes • Expands eligibility standards • Allows matches to be placed into a 529 college savings account • IDA Protection Act of 2010 (H.R. 6067) • Increase federal funding available for IDAs by $25 million • Eliminate requirement for state matching funds

  18. Homeownership Assistance • Illinois Assistive Technology Program (IATP) is a statewide not-for-profit agency • IATP has a Homeownership Coalition for People with Disabilities • The Homeownership Coalition is committed to providing a comprehensive pre- and post-purchase support system to ensure eligible people with disabilities successfully purchase and maintain their homes

  19. Homeownership Assistance • Homeownership Coalition Eligibility: • First-time homebuyer (cannot have owned a home in the last three years) • Income 80% or less of the Area Median Income to be eligible for grant assistance • Home will be primary residence • Contribute at least $500 towards down payment • Willing to work to improve credit, if needed • Attend home buyer education classes

  20. Assistive Technology Loans • Illinois Assistive Technology Program runs the ILoan Program, Illinois Loans for Independent Living • Loans can be used to purchase assistive technology for daily living and assistive technology and other equipment for self-employment and home-based employment

  21. Assistive Technology Loans • Maximum loan amount is $35,000 • Home modification loans cannot be more than $5,000 • Maximum loan term is 10 years for all loans • Variable interest rate of 5.5% - 7.5% based on term • Down payment equal to 3 months payment for all loans • Anyone with a credit score below 560 must go through credit education and/or find a qualified co-borrower

  22. Achieving a Better Life Experience (ABLE) Act of 2009 • H.R. 1205 & 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

  23. 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

  24. 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

  25. Asset Building Resources • Accessible Assets Webinar Resource Page - http://www.povertylaw.org/clearinghouse-review/web-extras/asset-building-disability-webinar • Asset Coalition Toolkit for States www.assetcoalitiontoolkit.org

  26. Upcoming Webinar Fair Treatment of Low-Income, Disabled, and Elderly People During Modernization of Electricity Distribution Wednesday, December 1, 2010 12:00 PM - 1:00 PM CST Register at https://www2.gotomeeting.com/register/860972730

  27. Thank YouKaren Harriskarenharris@povertylaw.org

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