Saving Options for Individuals with Disabilities
As if having a disability isn’t challenging enough, often individuals with disabilities are not familiar with all the savings options available to them. Many times they may be afraid to save money in fear of jeopardizing their public benefits. However, there are a wide variety of saving strategies that individuals with disabilities can potentially access to achieve their savings goals and improve their financial well-being.
In spite of the challenges facing them, a disabled individual and their family can build a life of work, savings, and asset development by utilizing the following five key strategies.
Benefits Planning and Work Supports
There are savings options available to individuals who are receiving a needs-based benefit, such as Supplemental Security Income (SSI), through the Social Security Administration (SSA). The SSA offers work incentives that support an individual to go back to work and maintain employment while receiving a public benefit; and an example of this is the Plan to Achieve Self-Support, often referred to as PASS. PASS is a plan for an individual’s future and allows an individual to use income or other assets to help them reach their work goals. An individual could, for example, set aside money to go to school to get specialized training for a job or to start a business. To learn more about PASS or other work incentives, review the SSA’s Red Book at https://www.ssa.gov/redbook/documents/TheRedBook2016.pdf.
Employment is important to improving financial well-being. Employment services are available to help individuals with a disability to obtain, maintain, or enhance their employment status. A great starting point is a visit to a local American Job Center (AJC), also called Workforce Centers or One-Stop Centers. AJCs are designed to provide a full range of assistance to job seekers under one roof. They offer training referrals, career counseling, job listings, and similar employment-related services.
Tax time is an ideal time to encourage individuals with disabilities to save money. Often, individuals with disabilities will not file a tax return either because of low wages or in fear that if they file and receive a tax refund, they will lose their public benefits. It is important for these individuals to know that refunds received from the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), or other refundable credits are not considered income. In addition, these refunds are not counted as a resource for at least 12 months from when an individual receives it for benefits or assistance under any federal program or under any state or local program financed in whole or in part with federal funds. More information about disability and free tax services is available online at https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/disability-and-earned-income-tax-credit.
Financial education is a critical first step on the road to financial stability. National Disability Institute (NDI) has several initiatives dedicated to understanding and implementing key financial concepts to help people with disabilities take hold of their financial futures. FDIC’s Money Smart, for example, provides an accessible curriculum that is frequently used by disability organizations. To learn more about NDI’s financial education tools and resources, visit http://www.realeconomicimpact.org/financial-education/financial-education-toolkit.aspx.
Individuals may not be aware of programs that can assist them to save money to buy a home, go back to school, or to start a business. Individual Development Accounts (IDA) are a savings option for individuals with disabilities. If an individual saves money in a federally matched IDA program, the funds will not impact their eligibility for federal benefit programs. Similarly, ABLE Accounts are a savings option for individuals with disabilities who qualify. ABLE Accounts allow an individual to save up to $14,000 per year without these funds impacting a needs-based benefit such as Supplemental Security Income. Money saved in an ABLE Account can be used to pay for qualified disability expenses.
Michael R. Roush, Director, Real Economic Impact Network, National Disability Institute. National Disability Institute is the first national organization committed exclusively to championing economic empowerment, asset development and financial stability for all persons across the full spectrum of disabilities. We affect change through public education, training, technical assistance and policy development to help the one in three Americans with disabilities living in poverty take steps toward creating brighter financial futures. To learn more, visit www.realeconomicimpact.org. If you have specific questions on savings options for persons with disabilities, please send an email to firstname.lastname@example.org. Engage with NDI on Facebook: RealEconImpact or follow NDI on Twitter: @RealEconImpact.