Building a Financial Future for Transition Students Abby Cooper Kennedy Douglas Consulting Marc Gold & Associates February 26, 2013

Building a Financial Future for Transition Students

Abby Cooper

Kennedy Douglas Consulting

Marc Gold & Associates

February 26, 2013

TACE Center: Region IV, a project of the Burton Blatt Institute.Funded by RSA Grant # H264A080021.

Abby Cooper Kennedy Douglas Consulting/Marc Gold & Associates © 2013

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“The premise that we want to be a nation of owners is attractive and deeply rooted in the American psyche” (Brown, Kuttner, and Shapiro, 2002) http://iasp.brandeis.edu/pdfs/Ownership.pdf

http://iasp.brandeis.edu/pdfs/Ownership.pdf

http://iasp.brandeis.edu/pdfs/Ownership.pdf



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What is the financial mainstream?

• Having a bank account

• Having a good credit score

• Being able to take out a loan

• Buying a house, a car• But how true is that for

students?

• How many of your transition students will participate in the financial mainstream?



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What are Assets?• Strictly speaking, assets are a stock of capital,

including savings, financial securities, owning a business or property. Other less tangible forms of assets include educational achievement, job skills, training and access to credit.

• Part of the problem

• Frequently we assume these items will not be part of an individual’s life who has a disabilities.

• We do not help students plan for a future with assets.



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Employment will be the answer

• Welfare policy for the poor and disabled has tended to focus nearly exclusively on income support. Disability policy for the last 30 years has focused on employment not a combination of employment, living wages and assets development.

• Many students are not leaving school with the expectation that they will earn a living wage.

• Some students are leaving school with limited understanding of the connection between money and work



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Our Current Approach Has Resulted In

• 54% of persons with disabilities have no savings account

• 75% of persons with disabilities do not have any loans with financial institutions

• 10% of persons with intellectual disabilities own their own home

• 39% of persons with disabilities indicate that lack of financial resources is the most serious problem they face



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Need to Change Assumptions

• Frequently there is the assumption that the wage doesn’t matter because the person doesn’t understand money and they have public benefits.

• Yet how many of us really understand money?

• Most people only understand what they need to know to function.



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What You Want From a The System



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Assumptions that should be embedded

• People should always be better off financially by working.

• If we are serious about individuals with disabilities being fully involved in their community then we must implement strategies that enhance financial stability and employment alone is not enough.

• Everyone should be part of the financial mainstream



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Assumptions that should be embedded (cont.)

• Work Incentives connected to public benefits are tools that can be used strategically to help position people to be better off financial.

• Incorporating into vocational planning:

• Financial literacy,

• Steps that create a pathway of financial stability

• Financial goals



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Three Theories

• Aversion Theory – people tend to be more afraid of what they will lose then what they will given. Need to think about how this shapes our thinking.

• Money and benefits are emotional topics for most people.

• How people define themselves and how their family, and others define them impacts if they think money applies to them.



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Money - The last Taboo

• Talking about money is difficult

• Trust is required

• Conversations need to happen repeatedly. A person’s ability to hear the information changes over time.



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Need More Conversations About MoneyThere are limited conversations about money:• On the amount of money people need to be financially

stable. Or how they define financial stability?• How to use their public benefits strategically?• What public benefits are essential to them and why?• What their lives could look like with a little more money?• What they would like to buy now and what they would

like to save for?• What a bank does? Who not to trust with your money• The more complex a person’s disability is, the less

conversations occur.



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No One Learns about money in a Vacuum• We need to have conversations that start early.• View the person as a wage earner and someone

who will be part of the financial mainstream. • Need to curative the belief that the person will not

only obtain employment but a living wage. What does that mean to how jobs are secured? Work experiences ?

• We have learned how to look at tasks a person can do and start to customized a job that fits who that person is. We need to start thinking about money in the same way.



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Employment is a Perfect Time to Talk Money if Not Before• People and their families think about what are essential

benefits for now and overtime.• Essential benefits are what the person and family have

decided are needed and can put a person on a pathway to financial stability.

• Wee need to dispel misinformation about benefits and start thinking how work incentives can be used strategically.

• Create a financial plan that is a living document. Could include: what work incentives to utilize, when, where to open a bank account, financial literacy that is available online or in the community, wages, savings, using the Earn Income Tax Credit (EITC), community resources.



16Topics that Could be Explored During Transition by Both the Teacher and VRC• That people work for pay. What minimum wage is and

what it can buy.• A plan for saving towards a goal that matters to the

person.• When to open a bank account, checking account or an

alternatives like prepaid debit cards. • Why a relationship with a credit union or bank is

important.• The Real Cost of Credit and credit scores• Taxes – people get their first introduction into the world

of taxes when they discover their paycheck was less than expected.



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Discovery and Money• Many VR program in the SE have started to use

discovery as a positive assessment tool.• If your agency does use discovery then there are some

things to think about when doing discovery.• The following questions can be at the beginning of the

process:• Related to desired salary – how much do you want to

earn? What would you do with the money your earned? • Do you need any help with money? Who helps you now?• Do you earn money now? How?• Do you want any help in understanding benefits and

working? In managing money?• Do you have a bank account?



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Need to Learn During Discovery• What does financial security look like for the individual?

Is family’s vision the same?• What behaviors does money encourage?• What does status mean and how does it play out in

financial behavior?

Why do they want to work? To be able to buy things To take a vacation Have something to do Be involved Be helpful



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Sample Questions to Ask or Observations to make• What would change in your life if you had more money?• What would you buy?• Would you be willing or want to save for that?• What part of your money do you manage?• Have you ever earned money?• Who would you help if you had more money?• When do you find it the most difficult to say “no”?• Is there anyone you really want to impress with money?• Is there anything you like to know about in regards to money?



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During Discovery

• What observations are noted around money that might later translate into the type of wage a person would need.

• Financial interests that translated into preferences concerning wages, hour worked, insurance

• Conditions Frequency of Raises Supported needed from the employer around

Wages- automatic deposit, or deductions.



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Asset Building Approaches

Need to start thinking about how we bundle approaches together to help people be on a pathway to financial Stability.



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Individual Development Accounts (IDAs)What are IDAs?• Matched savings accounts- matches range form $1.00 to $9.00• The match comes from Asset for Independence (AFI) and

private donations • Federal IDAs can save for education, homeownership, or

starting own business.• Account holders receive financial literacy training and

counseling.Who Qualifies for an Individual Development Account? • In Federal IDAs it must be Earned income• 200% of poverty level• Other requirements (vary by program)



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IDAs

• Federally funded IDAs are exempt from asset calculations on ALL benefit programs- SSI, Medicaid, food stamps, etc…

• Contributions deduct from countable income

• Non-federally funded IDAs count as a resource unless in a custodial account

• http://idaresources.org/afigrantees

http://idaresources.org/afigrantees

http://idaresources.org/afigrantees



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Number of IDA Providers By State

• Alabama- 2• North Carolina- 5• Mississippi-2• Georgia-5• Florida-9• Kentucky-6• Tennessee-6



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Student Earned Income Exclusions

• This work incentive allows a student who is under age 22 and regularly attending school to exclude up to $1,7300 per month with a yearly maximum of $6,960 .

• That means for a student on SSI, SSA will not count up to $6,960 of their earnings.

• This work incentives should be part of any students work plan



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Trial Work Period

• Trial Work Period (TWP): The Trial Work Period applies to you only if you receive SSDI or SSDAC.

• Trial Work Period is a nine month period with three additional months called the cessation and grace period.

• For a full year you can try working without losing your benefits. During the Trial work period you can earn as much money as you can and still receive your full Social Security check.



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Income-Related Work Expenses

What are Income-Related Work Expenses (IRWEs)?

• Items or services that are related to the student’s disability and are needed in order to work

• Cost must be paid for by the student

• Can decrease countable income and help increase or maintain benefits

• Can provide the student with another saving opportunity



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Earned Income Tax Credit (EITC)

• Federal income tax credit for low-income workers

• Reduces the amount of tax an individual owes, and may be returned in the form of a refund

• Does not count as earned income

• Must have earned income

• Must file a return

• Cannot be a qualifying child of another person



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The Alliance for Economic Inclusion (AEI)• (AEI) is the FDIC's national initiative to establish broad-

based coalitions of financial institutions, community-based organizations and other partners in markets across the country to bring all unbanked and underserved populations into the financial mainstream.

• AEI's focus is on expanding basic retail financial services for underserved populations, including savings accounts, affordable remittance products, affordable small-dollar loan programs, targeted financial education programs, alternative delivery channels and other asset-building programs.

• What alternative products do persons with intellectual disabilities need?



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Attitudes are changing• Disability Policy makers are starting to think about the

importance of financial stability for individuals who have a disability

• As a country as a whole we are thinking about financial stability

• 13 states require students to take a personal finance course or include the subject in an economics course before they graduate from high school, according to the Council for Economic Education.

• 34 states (including those 13) have personal finance within their curriculum guidelines, up from 28 states in 2007.

• How are our students with disabilities included?

http://www.councilforeconed.org/



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Achieving a Better Life Experience (ABLE) Act of 2009

• Able was Reintroduce in November. This reflects the attitude shift.

• 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.



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• 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 & community-based supports; respite care; clothing; assistive technology; home modifications; out-of-pocket medical, vision, or dental expenses; transportation vehicle purchases or modifications; insurance premiums; habilitation and rehabilitation services; funeral and burial expenses; and other services or products allowed by regulation.



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Resources• Financial literacy information for youth including

curriculum www.jumpstart.org/• Asset for Independence Resource Center http://

idaresources.org/• The Corporation for Enterprise Development

(CFED) is a national nonprofit based in Washington, DC dedicated to expanding economic stability. http://cfed.org/

• http://wid.org/publications • Southeast TACe Asset Development Exchange:

http://www.tacesoutheast.org/network/ax/index.php

http://www.jumpstart.org/




http://idaresources.org/



http://cfed.org/

http://cfed.org/

http://cfed.org/

http://wid.org/publications







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Comments & Questions



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Contact Information

Abby Cooper at:

[email protected]

mailto:[email protected]



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THANK YOU!

The value of an idea lies in the using of it. Thomas A. Edison

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http://www.brainyquote.com/quotes/quotes/t/thomasaed136633.html



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Education CreditsCRCC Credit - (2.0 - pending)Pending approval by Commission on Rehabilitation

Counselor Certification (CRCC) • By March 11, 2013, participants must score 80% or

better on a online Post Test and submit an online CRCC Request Form via the MyTACE Portal.

My TACE Portal: TACEsoutheast.org/myportal



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Southeast TACE Region IV

Toll-free: (866) 518-7750 [voice/tty]

Fax: (404) 541-9002

Web: TACEsoutheast.org

My TACE Portal: TACEsoutheast.org/myportal

Email: [email protected]



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Disclaimer

This presentation was developed by the Southeast TACE Center: Region IV ©2013 with funds from the U.S. Department of Education, Rehabilitation Services Administration (RSA) under the priority of Technical Assistance and Continuing Education Projects (TACE) – Grant #H264A080021. However, the contents of this presentation do not necessarily represent the policy of the RSA and you should not assume endorsement by the Federal Government [34 CFR 75.620 (b)].

Documents

Building a Financial Future for Transition Students Abby Cooper Kennedy Douglas Consulting Marc Gold & Associates February 26, 2013