Workers with disabilities—just like everyone else—not only have the right to work, they also have the right to self-sufficiency. For many people that involves asset building, or the use of strategies that can increase wealth and savings and that can improve the possibility of owning things of value, such as a home or a business. Asset-building programs focus on long-term development for individuals and families. For more information on assets and asset building, see Prosperity Now’s frequently asked asset questions.
Improving on the Piggy Bank
Fortunately, there are now several savings programs and work incentives designed just for workers with disabilities to help them develop their wealth, save for emergencies, move up the economic ladder with an education, own a house or a business, and become more stable and independent.Here are a few ways a job seeker can save money for future investments or self-sufficiency goals:
- A Plan for Achieving Self-Support (PASS) is a work incentive designed to help Supplemental Security Income (SSI) recipients work. It allows people with disabilities who receive SSI to set aside resources and/or various kinds of income for a specified period to use toward a work goal or to start a business. To qualify for a PASS, an individual must:
- have a realistic work goal,
- have a specific savings/spending plan for work-related items or services and specify how those items or services are related to employment,
- have a clearly identifiable accounting of the funds set aside in the PASS, and
- follow the PASS plan as agreed upon with SSA.
- An Individual Development Account (IDA) is a special savings account matched by federal and state dollars ($4 to $1). IDAs can help low-income individuals and families save money for training or education, purchasing or rehabbing a home, buying a vehicle, or starting a small business. An individual who has a job, earns income, and who is a member of a household with an annual household income of less than 200% of federal income poverty guidelines is eligible for an IDA account. For more details and resources, see the Indiana Housing & Community Development Authority’s webpage on IDAs.
- An ABLE account is a special savings account that allows individuals with disabilities to save up to $15,000 per year while still keeping their Medicaid and other benefits. Eligible individuals who are working may be able to keep more of the money they earn by saving to and spending from an ABLE account. See the ABLE fact sheet for more information and resources. Indiana’s ABLE program is known as INvestABLE ( there are now ABLE programs available in many states). Find details about INvestABLE fees, investment options, and benefits at https://savewithable.com/in/home.html
- A Special Needs Trust is a trust that allows people with disabilities to save assets. There are different types of Special Needs Trusts. Some are funded through an inheritance, back payment from Social Security, or money from a personal injury settlement. Other trusts can be funded by workers with disabilities themselves, with their own earnings. Special Needs Trusts are often set up by an attorney, but for Hoosiers, the Arc of Indiana also has a Master Trust I and II. Just as with ABLE accounts, Special Needs Trusts can allow people with disabilities to maintain their eligibility for government benefits. For more information about minimum deposits, how funds can be used, and the difference between trusts, see the Arc Master Trust guide or consult an attorney.
We Knew You Would Ask
There has been some question as to whether a person should choose an ABLE account or a Special Needs Trust. People with disabilities who are eligible may be able to have both! Some advisors recommend that ABLE accounts, many of which have a debit card option, be used for smaller savings amounts and for routine spending, and that Special Needs Trusts be used for longer-term savings.If you are working with families or individuals, help them ask questions when they’re comparing and contrasting savings and investment options.
And While We're on the Subject
April is Financial Capability Month (who knew?). The National Disability Institute, the LEAD Center, and the Municipal Securities Rulemaking Board (MSRB) are joining forces to present a webinar, "Advancing Financial Literacy for Individuals with Disabilities." Per NDI's website, participants will learn about:
- Consumer protections provided by MSRB rules for ABLE tax-advantaged savings accounts
- New materials from the FDIC to build financial capability for adults with disabilities
- Favorable tax benefits for people with disabilities from the IRS
- Financial literacy requirements in the Workforce Innovation and Opportunity Act (WIOA) from the Office of Disability Employment Policy (ODEP)
- Challenges and opportunities to improve financial capability and inclusion for individuals across the spectrum of disabilities from disability leaders
Advancing Financial Literacy for Individuals with Disabilities
1-3 p.m., Eastern Time
For more information and to register: https://www.realeconomicimpact.org/news/?id=1665
