A Wealth of Savings Options

Until recently, people with disabilities had very few options for saving money. To protect their supports or health care from Medicaid or Social Security, individuals would choose not to work or would opt to work minimal hours. Sadly, we were keeping people poor. 

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. 

         See the PASS fact sheet for more details.

• 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

The details:
Advancing Financial Literacy for Individuals with Disabilities

April 18
1-3 p.m., Eastern Time
For more information and to register: https://www.realeconomicimpact.org/news/?id=1665   

Bubbling Up New COLA Info

Every year, usually in October, the federal government announces the latest Cost of Living Adjustment, fondly referred to as COLA. The new rates are based on the Consumer Price Index, which is really a measure of the average change in prices for the nation’s goods and services. 

Ah, but why should you or your consumers care? 

It’s because Social Security’s substantial gainful activity (SGA) level and many of its work incentives are based on the annual COLA rate. In 2017, for instance, that means a consumer eligible for Social Security Disability Insurance (SSDI) earning less than $1,170 per month may still be eligible for benefits after his or her Trial Work Period. The new 2017 SGA level for workers who are disabled is $1,170; it’s $1,950 for workers who are blind.

The recent COLA increase led to a modest increase in the SGA, which means your consumer can now earn $40 more per month ($480 per year) and still qualify for benefits. The bottom line: When the SGA increases, many consumers can earn more and continue to be eligible for benefits.

COLA also affects recipients of Supplemental Security Income (SSI). In 2016 the maximum SSI payment did not increase, but for 2017 it rose a modest .3%, to $735, due to the new cost-of-living rate. 

Students with disabilities who are working make up another group affected by COLA if they’re using the Student Earned Income Exclusion. In 2017, Social Security ensures that working students can keep more of their SSI check by not counting up to $1,790 per month ($7,200 annually) of earned income when calculating a student’s monthly SSI payment. 

Why, you ask, is the rate increase so small if the economy has improved? Okay, let’s get a little benefits nerdy here. COLA is based on “quarters of coverage” and is averaged over two years. In October 2016, when they set the new rate, it was based on the third quarter of 2014 through the third quarter of 2016. Improvements to the economy (and therefore increasing prices for goods and services) that have occurred more recently won’t be reflected in the COLA rates until 2018 or 2019. 

We get it: It’s complicated. That’s why Indiana has resources for workers with disabilities and the people who support them. That means you!  

Benefits Information Resources

• 2017 Changes to Social Security (including COLA)
• 2017 Work Incentive Fact Sheets
• Need a refresher on all-thing-benefits?  Check out the Center on Community Living and Career’s Benefits Information Network trainings page. There you’ll find a save-the-date flyer for all of our 2017 certified BIN trainings and a link to registration for our February 22-23 workshop, “Social Security and Other Federal and State Benefits: Learning the Basics.” 

Have more questions? Contact a Benefits Information Network (BIN) liaison. There are now certified BIN liaisons in place at 62 of Indiana’s 96 community rehabilitation providers. For a referral to a BIN liaison, contact the Center on Community Living and Career’s Kelley Land (our benefits guru) at kelland@indiana.edu.