Michael Morris - Asset Strategies (.ppt)


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Michael Morris - Asset Strategies (.ppt)

  1. 1. Center for Workers with Disabilities Conference Linking Asset Development Strategies for People with Disabilities Michael Morris Associate Director, Law, Health Policy, and Disability Center (LHPDC) University of Iowa Director, National Disability Institute NCB – Development Corporation [email_address] (202) 521-2930 November 2004
  2. 2. Law, Health Policy, and Disability Center <ul><li>Established 10 years ago to improve understanding and impact of employment and related public policy. </li></ul><ul><li>Particular focus on the relationship of federal and state policy to advance individual self-determination, personal , and economic freedom. </li></ul><ul><li>Study of the impact of the ADA on business practices and culture. </li></ul>
  3. 3. National Disability Institute <ul><li>Established in November 2001 as part of National Cooperative Bank and NCB Development Corporation. </li></ul><ul><li>NCB has directed more than $1.5 billion in loans or investments to low-income communities nationwide. </li></ul><ul><li>Particular focus on affordable housing, small business development, access to health care and educational choice through charter schools. </li></ul>
  4. 4. National Disability Institute -- Vision <ul><li>To provide leadership nationwide for innovative capital development and other capacity building strategies that expand social and economic options for low-income Americans with Disabilities. </li></ul>
  5. 5. The Challenges <ul><li>One out of every three adults with disabilities live in very low income households as opposed to one of every eight non-disabled adults (NCD 1996 Report) </li></ul><ul><li>Lack of money is a serious problem among people with disabilities: </li></ul><ul><ul><li>68% say it is a problem </li></ul></ul><ul><ul><li>39% say that the lack of financial resources is the most serious problem they face. (NOD/Harris Survey 2000) </li></ul></ul><ul><li>Only 37% of adults with significant disabilities are participating in the nation’s workforce. (National Health Interview Survey, 2000) </li></ul>
  6. 6. The Challenges, continued <ul><li>Even when people with disabilities are employed, they earn substantially less than their non-disabled peers, roughly 72% to the dollar (NCD 1996 Report) </li></ul><ul><li>Public assistance represents 59% of the total income of people with significant disabilities and only 8% of the total income of people who have no disability. (Harris Survey 2002) </li></ul><ul><li>On a National level, 1.8 million SSI recipients with disabilities between the ages of 18 and 64 have no banking relationship; 50.7% of SSI recipients do not currently direct deposit their monthly checks. (SSA 2002) </li></ul>
  7. 7. The Challenges, continued <ul><li>Less than 10% of people with disabilities own their own homes compared with 70% of Americans with no disabilities. </li></ul><ul><li>One-third of students with disabilities do not finish high school. </li></ul><ul><li>People with disabilities enroll in post secondary education at half the rate of the general population. </li></ul>
  8. 8. Asset Poverty Varies Significantly by Race and Gender <ul><li>33% of all American households have zero or negative net assets. </li></ul><ul><li>54% of Hispanic households have a similar status. </li></ul><ul><li>60% of African American households have no net assets. </li></ul><ul><li>For persons with disabilities, estimates are as high as 80%. </li></ul>
  9. 9. Current Picture People with Disabilities <ul><li>Less Educated </li></ul><ul><li>More likely to be dependent on fixed income and government benefits </li></ul><ul><li>More likely to live below poverty levels </li></ul><ul><li>Less likely to have assets </li></ul><ul><li>Less likely to be employed full time </li></ul>
  10. 10. Introduction to Asset Development Strategies
  11. 11. Definition of Assets <ul><li>Capacities and resources that enable individuals to identify, choose, and implement activities that enhance the quality of life experience. </li></ul><ul><li>Capacities and resources can be further explained by defining individual assets. </li></ul>
  12. 12. Definition of Individual Assets – Three Parts <ul><li>Individual financial assets (money, stocks, real and personal property) </li></ul><ul><li>Income Assets (job) </li></ul><ul><li>Human capital assets (skills, knowledge, and experience gained from education and training) </li></ul>
  13. 13. Strategies that Promote Asset Development <ul><li>Individual Development Accounts (IDAs) </li></ul><ul><li>Financial Literacy </li></ul><ul><li>Affordable Financial Services </li></ul><ul><li>Tax Policies </li></ul><ul><li>Self-Directed Accounts </li></ul>
  14. 14. Private and Public Initiatives <ul><li>Assets for Independence Act of 1998, Federally funded initiative; </li></ul><ul><li>American Dream Demonstration (“ADD”) of 1997, Corporation for Enterprise Development Foundation Site Demonstration </li></ul><ul><li>Multiple State and local initiatives; </li></ul><ul><li>Over 25,000 Americans are saving money in IDAs and there are an estimated 500 IDA projects nationwide. </li></ul>
  15. 15. Assets for Independence Act <ul><li>Congressional Findings </li></ul><ul><li>Economic well being does not come solely from income, spending, and consumption. It also requires savings, investment and accumulation of assets. </li></ul><ul><li>Assets can improve economic stability and independence, connect individuals with a viable and hopeful future and stimulate development of human and other capital. </li></ul>
  16. 16. Individual Development Accounts <ul><li>Matched Savings Accounts – match earned income; </li></ul><ul><li>Two Thousand Dollars Per Individual – Federal IDA; </li></ul><ul><li>Required Financial Literacy Training; </li></ul><ul><li>Targeted Goals for Savings; </li></ul><ul><li>Managed through CBOs, Banks, Faith Based Organizations. </li></ul>
  17. 17. How IDAs Work <ul><li>$1 of savings could = $2 to $4 in matched by private and public institutions. </li></ul><ul><li>IDAs managed by community organizations, and the accounts are held at local financial institutions </li></ul><ul><li>Participation includes economic literacy training to improve credit, to create a budget and savings schedule and to develop long-term management skills </li></ul>
  18. 18. Individual Development Accounts: Eligibility and Uses <ul><li>200% of poverty level – $18,000 for a family of three; EITC, TANF eligible. </li></ul><ul><li>Uses for home ownership, post-secondary education and small business start-up. </li></ul><ul><li>Some other uses – home repair, vehicle ownership [state IDAs]. </li></ul><ul><li>Working people with disabilities eligible for SSI and SSDI are participating in IDAs in small numbers. </li></ul>
  19. 19. Activities <ul><li>Individuals create personal savings plans; </li></ul><ul><li>IDA accounts established; </li></ul><ul><li>Money management courses completed; </li></ul><ul><li>Establish and save at or above monthly targets; and </li></ul><ul><li>Meet asset goals. </li></ul>
  20. 20. Early Research Findings <ul><li>Low income individuals can and will save and accumulate assets; </li></ul><ul><li>Participants in ADD save an average of $25 per month; </li></ul><ul><li>IDAs have been successful in promoting economic stability and educational attainment; </li></ul><ul><li>Data collection has not focused on identification of IDA participants with disabilities; </li></ul><ul><li>Not a target population for current IDA demonstrations. </li></ul>
  21. 21. Financial Literacy: Five Principles for Successful Financial Education Programs <ul><li>Seek behavioral change not just improved knowledge; </li></ul><ul><li>Focus on practical information; </li></ul><ul><li>Address values as well as knowledge; </li></ul><ul><li>Provide opportunities to learn by doing; </li></ul><ul><li>Coordinate and collaborate to meet those with the most pressing needs. </li></ul>
  22. 22. What is the Earned Income Tax Credit <ul><li>Federal tax benefit designed to assist low and moderate income workers in increasing their financial stability </li></ul><ul><ul><li>Reduces taxes for workers </li></ul></ul><ul><ul><li>Supplements wages </li></ul></ul><ul><ul><li>Makes work more attractive </li></ul></ul>
  23. 23. EITC Facts and Figures <ul><li>Provides a maximum credit of up to $4,300 for working families with less than $34,458 in earned income </li></ul><ul><li>Over 21 Million working families and individuals received over $37 billion in EITC in 2002 (average refund of $1,770) </li></ul>
  24. 24. Refundable Credit – EITC <ul><li>Credit offsets any tax liability </li></ul><ul><li>Excess received as refund </li></ul>
  25. 25. Why is EITC Education & Outreach Needed? <ul><li>25% of families fail to claim the credit. </li></ul><ul><li>Limited education, language & financial abilities; </li></ul><ul><li>IRS efforts in the past have failed to reach all eligible families; </li></ul><ul><li>Affirmative Action is required to access EITC and other tax credits. </li></ul>
  26. 26. Why Free Tax Preparation Services are Needed <ul><li>Inability of families to prepare own return. </li></ul><ul><li>Nationally, 61% of EITC recipients used paid preparer. </li></ul><ul><li>Potential link to asset building opportunities. </li></ul>
  27. 27. Link to Assets <ul><li>“ Unbanked” </li></ul><ul><li>Financial Literacy </li></ul><ul><li>Other Family Support Programs </li></ul><ul><li>Investment Opportunities </li></ul>
  28. 28. Linking the Pieces <ul><li>Outreach – Reach eligible families not currently claiming the credit. </li></ul><ul><li>Free Tax Preparation – Preserve the value of the credit. </li></ul><ul><li>Asset Building – Introduce financial literacy and link to other supports at tax preparation sites. </li></ul>
  29. 29. Community Based Partnerships Awareness and Education Tax Preparation Asset Building Community- Based Coalitions
  30. 30. Next Generation Opportunities <ul><li>Historical Context </li></ul><ul><li>Realign Social Policies and Practices </li></ul><ul><li>Next Generation Self-Directed Accounts </li></ul>
  31. 31. Historical Context <ul><li>1990 Passage of the Americans with Disabilities Act </li></ul><ul><li>End isolation and segregation </li></ul><ul><li>Promote full community participation </li></ul><ul><li>1999 Olmstead Supreme Court Decision </li></ul><ul><li>Title II of the ADA requires States to expand support for community options </li></ul><ul><li>2001 New Freedom Initiative </li></ul><ul><li>Tear down barriers to equality </li></ul><ul><li>Build systems capacity </li></ul>
  32. 32. Historical Context, Continued <ul><li>2001-2004 CMS Real Choice Systems Change Grants </li></ul><ul><li>Improve Community Based Service Systems </li></ul><ul><ul><ul><ul><li>Transition from institution to community </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Expand personal assistance services </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Respond to direct service worker shortages </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Promote consumer direction </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Improve agency collaboration </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Focus on quality improvement </li></ul></ul></ul></ul>
  33. 33. Three Goals for Systems Change For Children and Adults of Any Age Who Have a Disability <ul><li>Live in the most integrated community setting appropriate to their individual support requirements; </li></ul><ul><li>Exercise meaningful choices about their living environment, the providers of services they receive, the types of supports they use, and the manner by which services are provided; and </li></ul><ul><li>Obtain quality services in a manner as consistent as possible with their community living preferences and priorities. </li></ul>
  34. 34. Principles of Self-Determination <ul><li>Person centered plans; </li></ul><ul><li>Individual budgets; </li></ul><ul><li>Individual choice of supports and providers; </li></ul><ul><li>Financial management services. </li></ul>
  35. 35. New Strategies <ul><li>Individual Budgets – CMS </li></ul><ul><li>Individual Development Accounts – HHS </li></ul><ul><li>Work Incentives – SSA </li></ul><ul><li>Cash-Out Benefits – VR, MH, Education </li></ul><ul><li>Individual Training Accounts – Labor </li></ul><ul><li>Housing Choice Vouchers – HUD </li></ul><ul><li>Use of Earned Income Tax Credits – IRS </li></ul>
  36. 36. Blended Self-Directed Account <ul><li>Bundling public benefits across the domains of: </li></ul><ul><ul><li>Housing; </li></ul></ul><ul><ul><li>Personal assistance; </li></ul></ul><ul><ul><li>Social security; </li></ul></ul><ul><ul><li>Employment; </li></ul></ul><ul><ul><li>Skills development; and </li></ul></ul><ul><ul><li>Asset building. </li></ul></ul>
  37. 37. Collaboration Across Systems <ul><li>Multiple points of entry to start an account. </li></ul><ul><li>Benefits specialists are available who are knowledgeable about multiple public benefits and successful approaches to bundling in a self-directed account. </li></ul><ul><li>Fiscal intermediaries are available to offer efficient financial management. </li></ul>
  38. 38. Collaboration Across Systems, continued <ul><li>Opportunities are created to encourage private match to earned and unearned savings with direct tax benefits to the donor and account holder. </li></ul><ul><li>Individual self-directed budget is personal and portable. </li></ul>
  39. 39. Agreement on Account Objectives <ul><li>Respond to multiple personal, individualized goals including: </li></ul><ul><ul><li>Self-employment; </li></ul></ul><ul><ul><li>Employment related supports; </li></ul></ul><ul><ul><li>Affordable housing and homeownership; </li></ul></ul><ul><ul><li>Education and skills development; </li></ul></ul><ul><ul><li>Health care and emergency needs; and </li></ul></ul><ul><ul><li>Savings for specific short and long-term needs: (a) Transportation, (b) Technology, and (c) Retirement. </li></ul></ul>
  40. 40. Recommendations
  41. 41. Recommendations <ul><li>Establish an Interdepartmental Work Group with consumer and family participation to design a policy friendly environment and infrastructure to support pilot testing of IDAs and blended self-directed accounts. </li></ul><ul><li>Reach agreement on the scope and boundaries of each program/benefit that may be bundled in a self-directed account. </li></ul>
  42. 42. Recommendations, Continued <ul><li>Simplify and coordinate procedures for application, determination of eligibility, development of people centered budgets, and multiple points of entry. </li></ul><ul><li>Identify potential pilot sites at a community level and public-private partner work groups to realign roles, relationships, and responsibilities. </li></ul>
  43. 43. Recommendations, Continued <ul><li>Focus on: </li></ul><ul><ul><li>Capacity building; </li></ul></ul><ul><ul><li>Education and training; </li></ul></ul><ul><ul><li>Policy alignment; </li></ul></ul><ul><ul><li>Private sector participation; </li></ul></ul><ul><ul><li>Interdepartmental collaboration; and </li></ul></ul><ul><ul><li>Needed coordination and technical assistance. </li></ul></ul>
  44. 44. Recommendations, Continued <ul><li>Build on existing relationships </li></ul><ul><ul><li>State IDA Network; </li></ul></ul><ul><ul><li>Microenterprise Loan Providers; </li></ul></ul><ul><ul><li>Financial Education Providers; </li></ul></ul><ul><ul><li>BPAO Benefit Specialists; </li></ul></ul><ul><ul><li>Disability Program Navigators; and </li></ul></ul><ul><ul><li>Other Service Coordinators. </li></ul></ul>
  45. 45. Evaluation <ul><li>Quantitative and qualitative research needs to answer several questions. </li></ul><ul><li>When current resource tests are altered or waived, what improvements result in social and economic status for individuals with disabilities? </li></ul><ul><li>What outcomes result from self-directed accounts related to savings, asset building, employment status, community participation, housing choices, and other quality of life issues? </li></ul><ul><li>What permanent policy and infrastructure changes are needed to support self-directed accounts? </li></ul>
  46. 46. Evaluation, continued <ul><li>What oversight and quality control mechanisms are needed to minimize risk, protect public resources, and improve consumer satisfaction? </li></ul><ul><li>What incentives can be offered to improve multiple public system coordination and private sector investment in self-directed accounts? </li></ul><ul><li>Do self-directed accounts reduce dependence on government benefits, encourage income generation, and asset building? </li></ul><ul><li>Does financial education and benefits counseling support informed decision making and improved management of resources? </li></ul>
  47. 47. Unprecedented Opportunities <ul><li>Make a commitment to self-direction and asset building objectives; </li></ul><ul><li>Reduce disincentives to work; </li></ul><ul><li>Increase individual choice and control; </li></ul><ul><li>Align policy and infrastructure to support informed decision making and efficient financial management; and </li></ul><ul><li>Advance social and economic independence. </li></ul>
  48. 48. Further Information <ul><ul><li>Private Sector Groups </li></ul></ul><ul><li>The New America Foundation’s AssetBuilding.org – www. assetbuilding .org </li></ul><ul><li>The Corporation for Economic Development – www. cfed .org </li></ul><ul><li>CFED’s IDA Network – www. idanetwork .org </li></ul>
  49. 49. Further Information, Continued <ul><ul><li>Private Sector Groups, cont. </li></ul></ul><ul><li>The Center on Budget and Policy Priorities – www. cbpp .org </li></ul><ul><li>National Community Tax Coalition – www.tax-coalition.org </li></ul><ul><li>National Cooperative Bank – Development Corporation – www. ncbdc .org </li></ul>
  50. 50. Further Information, Continued <ul><ul><li>Private Sector Groups, cont. </li></ul></ul><ul><li>National Disability Institute – www.nationaldisabilityinstitute.org </li></ul><ul><li>Law, Health Policy, and Disability Center – disability.law.uiowa.edu </li></ul><ul><li>Master My Money – www.mastermymoney.org </li></ul>
  51. 51. Further Information, Continued <ul><ul><li>Research Centers & Email Newsletters </li></ul></ul><ul><li>Law, Health Policy, and Disability Center of the University of Iowa – Disability.law. uiowa . edu </li></ul><ul><li>One-Stop Toolkit – www. onestoptoolkit .org </li></ul><ul><ul><li>Resources of the Week e-newsletter– www.onestoptoolkit.org/resourceoftheweek.cfm </li></ul></ul><ul><li>The World Institute on Disability – www.wid.org </li></ul><ul><ul><li>Equity e-Newsletter -- www.wid.org/publications/?page=equity </li></ul></ul>
  52. 52. Further Information, Continued <ul><ul><li>Federal Government Sites </li></ul></ul><ul><li>The Internal Revenue Service – www. irs . gov </li></ul><ul><ul><li>Earned Income Tax Credit information -- www. irs . gov /individuals/article/0,,id=96466,00.html </li></ul></ul><ul><li>The Federal Deposit Insurance Corporation – www. fdic . gov </li></ul><ul><ul><li>The Money Smart Program – www. fdic . gov /consumers/consumer/ moneysmart /index.html </li></ul></ul>