Johnette Hartnett, Ed. Dⁱ

As Americans with disabilities enter the new millennium, they are healthier, living longer and more independent and educated than a century ago. This is due to the relentless efforts of our forbears with disabilities who braved the new frontier of civil rights, equal education and independent living. This EQUITY summer issue represents an important milestone on this journey because it recognizes that access to financial knowledge and services and products is essential for individuals with disabilities to build true economic security in the new century.¹ However, in order to build true economic security federal disability benefits policy must be transformed into the 21st century culture that honors work and asset growth and full participation for all Americans with disabilities.

The disability community's strategic vision over the past 50 years focused resources and research that provided the current blueprint for Americans with disabilities to live as full citizens.² Yet, the topic of financial education and asset development was not part of the original blueprint because the concept and potential of work for someone with a disability was and is still not fully realized.

Although there is some research being conducted that can be read about in this issue, little federal or private attention has been given to the study of financial education for individuals with disabilities. Financial education is understudied, un-funded and mainly unrecognized as a piece of the puzzle in reducing poverty and building economic independence and self-sufficiency for working Americans with disabilities.

In our research for this issue, we were hard pressed to find accessible research-based curricula that addresses the complex array of issues that face working Americans with disabilities who are recipients of public benefits. For example, unlike their fellow working Americans without disabilities, many people with disabilities face hidden or "gateway costs" just to enter the workplace. Many pay-out-of pocket expenses related to their disability just to enter the workplace because of various accommodations or services needed such as personal assistance, special transportation, or adaptive technology. Some of these expenses are tax deductible, but many are not.

The need to negotiate earnings with income and resource eligibility limits from federal and state policies that discourage work and penalize assets is reported as overwhelming for the millions of Americans on public benefits who are working even a few hours a week. Recent research conducted in four cities demonstrates that few workers with disabilities understand how these rules interface when they earn income or gain resources. In addition, many providers of services, family members, payees, tax preparers and employers have asked for education and training on these issues to better serve their clients with disabilities who are working but still need some level of public benefit support. Even though there are a number of federal programs and pilots that encourage work (Ticket to Work, PASS, PESS, Life Accounts) their underutilization is troubling.³

The strong federal pull to penalize work and asset growth for individuals receiving public benefits has not stopped Americans with disabilities determined to work and carve out meaningful lives. However, without reliable and accurate financial education our next generation of individuals with disabilities who want to work may find it too difficult to negotiate the "gateway costs" associated with their disabilities and to manage their budgets, control debt, understand tax filing obligations and benefits, find accessible financial institutions that accommodate their needs such as ATM's for people who are blind, and negotiate internet banking requirements when systems are not adapted for individuals with visual or hearing impairments. And finally, as the trend to manage individuals budgets and individual accounts continues to grow families interested in managing their own budgets need to be the given the necessary tools and skills to do it successfully.

National Focus on Financial Education

The recent focus on financial education for low-income Americans is a response to a number of disturbing trends such as America's negative savings rate, high growth in personal bankruptcies and high fiscal debt. Some even argue that it is not just low-income Americans that need financial education but, the country as a whole. When you combine these trends with the facts that Americans are living longer and having less children it suggests that Americans need a master plan for increasing positive financial behavior.

The issue of financial education is not new and has been around for over a 100 years in the United States. However, it is new for low-income working Americans with disabilities. Recent data from a national study that focused on four of 30 cities participating in the TaxFacts+ Campaign found that only 21 percent of 649 working individuals with disabilities earning $35,000 or less had participated in a class or workshop on how to handle their money.⁴ In a focus group discussion of 83 working individuals from the same study, 28 percent reported participating in a class or workshop on how to handle their money. Participants reported teaching material used for financial education was not understandable or accessible. Many participants talked about needing relevant material that were specific to their filing needs. For example - one individual who was on Supplemental Security Income and working part time wanted advice on filing for the Earned Income Tax Credit but her payee did not know about it and wasn't sure if it would effect her benefits or if it was retroactive (it is). Others talked about needing money management skills and others voiced their fear about using online banking for fear of losing their money due to computer hackers. Virtually none of the participants used a gift card or stored valued card.

We asked if participants had a personal relationship with someone where they did their banking transactions and most did not. When asked how they acquired information about finances or benefits most reported from their friends and family members. This finding is reminiscent of the findings from a study done by MetLife on financial services for families with disabilities that reported over 60% of families with members with disabilities asked their physician about financial planning because they had no relationship with a financial advisor or banker.

In the TaxFacts+ Study 30 percent of 3,199 working individuals with disabilities reported having a checking account and 12 percent a savings account.⁵ As the data analysis on this ground breaking research continues we will better understand the financial and tax services needs of working individuals with disabilities in order to better inform research in the development of a financial education agenda for working people with disabilities.

CHALLENGES FINANCIAL EDUCATION FOR PEOPLE WITH DISABILITIES IS UNDERSTUDIED

• Little research is found on the success of existing financial education programs for low-income Americans. The field is still struggling with how to collect outcome measures. Part of the issue could be that many of the community-based organizations providing free financial education are without the necessary resources to design a study and collect data. Much of the data currently being used is based on transactions - the number of individuals banked, the number of benefits screened, number of hours of financial education, number attending home ownership etc. Although these numbers are important they do not describe success overtime.

• Southern New Hampshire School of Community Economic Development through a grant from the National Institute on Disability and Rehabilitative Research Law, Health Policy and Disability Center, University of Iowa, is following a cohort of working individuals with disabilities who are filing taxes to study their financial and tax service needs.

• The outcome research over the last few years on financial education for low-income Americans is limited but one three year evaluation from the Center on Poverty and Law in Chicago conducted by Dory Rand found that the best outcomes resulted in a limited number of hours (around 10 hours) combined with a financial incentive like a matched savings plan opportunity where participants could participate. As one leader in a national EITC campaign leader told me when I asked what type of financial education program they were using, "Right now our major focus and requests center around debt counseling. So many people are struggling just to stay afloat."

NEED WORKING DEFINITION

• The disability community must develop a comprehensive research-based curricula and definition for financial education for American's with disabilities.

• The National Endowment for Financial Education offered the following definition for "financial literacy"⁶ at a national symposium:" Personal financial literacy is the ability to read, analyze, manage and communicate about the personal financial conditions that affect material well being. It includes the ability to discern financial choices, discuss money and financial issues without (or despite) discomfort, plan for the future, and respond competently to life events that affect everyday financial decisions, including events in the general economy."

• Obviously, this definition was not written to reflect the continuum of abilities of the millions of Americans with disabilities who may need assistance in understanding, managing, communicating, making choices and planning for the future.

ACCESSBILITY AND ACCOMMODATION

• Existing financial education curricula should include information for instructors in working with students with different physical and cognitive abilities.

• There are no national curricula that are totally accessible and available in alternative formats (Braille, on tape) for individuals with sensory and cognitive disabilities.

• Issues of access and accommodation are the law and should not be considered burdens or too much trouble.

DISABILITY POPULATION INVISIBLE

• Financial education for people with disabilities has received little federal or private support or recognition. Disability groups have approached a number of foundations about the need to either augment existing curricula or develop new ones that meet the needs of the different stakeholders with disabilities with little success. Many disability groups have booklets targeted to their specific populations on the fundamentals of financial literacy but there is no comprehensive, curricula designed for working Americans with disabilities that include the myriad of benefit issues common for working Americans with disabilities.

• National non-profits focusing on asset building for low-income populations including minority and immigrants have been slow to identify disability as a major market segment even though 24 percent of people with disabilities are poor compared to 8 percent of people without disabilities and 29 percent of American families have a member or head of household with a disability.

EDUCATION FOR INDIVIDUALS, FAMILIES AND EMPLOYERS

• Individuals with disabilities and their families participating in national initiatives to manage their own budgets need a framework for building financial relationships with non-traditional partners in the community.

• Professionals in financial services need education about the specific needs of individuals with disabilities on public benefits who are working.

• Employers of individuals with disabilities need information and guidance in assisting workers with various options for employee benefits.

• IRS/SPEC division providing support to hundred of free volunteer income tax assistance sites through the TaxFacts+ initiative are finding that many volunteers as well as their own staff are interested in learning more about the interaction of federal benefits with receipt of various credits for working individuals with disabilities.

OPPORTUNITIES NATIONAL RECOGNITION OF GROWING NEED

• The Federal Deposit Insurance Corporation (FDIC) was first on board to review the applicability of their comprehensive ten module curricula, the Money Smart Program, for persons with disabilities. In July of 2006 the FDIC will be releasing a new instructor's guide that will include information for working with individuals with disabilities.

• The April 2006 release of the National Strategy for Financial Literacy, Taking Ownership of the Future by the U.S. Treasury Financial Literacy & Education Commission recognized taxpayers with disabilities. The report acknowledges that financial literacy and education is essential for working Americans with disabilities as in the underutilization of tax benefits. As workers with disabilities continue to strive toward full citizenship and equitable treatment in work and community life full knowledge of financial service options and favorable tax provisions and credits is critical.

• The President's Committee for People with Intellectual Disabilities (PCPID) hosted a round table discussion in March of 2006 on asset development and explored a number of initiatives both from a federal and state perspective for individuals with intellectual and developmental disabilities. Although financial education was not a central topic, an emerging theme identified the need for more communication and transparency and education across the public and private sectors about what is currently going on for low-income individuals with and without disabilities. A working individual with a disability may have additional "gateway costs" just to go to work that could require a personal assistant or specialized transportation or an interpreter or adapted computer technology. How this affects their income if on public benefits and annual tax filing requirements is complicated and emerging as an important area for study and focus.

• Grants from the Ford Foundation and the National Cooperative Bank to the National Disability Institute and the NCB Development Corporation has allowed for the first time in the United States to capture data. This data is both quantitative and qualitative about the financial and tax filing needs and behaviors of working Americans with disabilities accessing free tax filing sites in four of 30 cities participating in the TaxFacts+ Campaign. A full report will be released in the fall of 2006.

Concluding Thoughts

As more and more Americans with disabilities join the workplace, it is essential that they have accurate and trustworthy information about accessible financial services and products and tax benefits and filing requirements. Even more important than all of this is a guarantee that if they do work and file taxes they will not be penalized or subjected to loss of benefits- including vital health care coverage. Financial education that is designed for the new century workers with disabilities is the first step in securing the next generation that is truly self-determined and economically secure.

1 Although the issue of financial education for individuals with disabilities is applicable to all income levels, the focus of this article and the research from the TaxFacts+ Campaign is on low-income (under $35,000 a year) working individuals with disabilities.

2 Legislation resulted in a number of areas including: employment and training; deinstitutionalization; transition from school to work; early childhood to post-secondary education; accessible transportation; affordable housing; assistive technology; health research; available and affordable health care; and long-term services and supports.

3 National Council on Disability, November 2005. The Social Security Administration's Efforts to Promote Employment for People with Disabilities. New Solutions for Old Problems. Research from the TaxFacts+ Campaign confirms many of the findings from this NCD report that many individuals with disabilities are afraid to work and to file taxes because of fear of loss of important benefits.

4 Hartnett, J. & Morris, M. (2006). TaxFacts+ Ford Study to be released in Fall of 2006.

5 Ibid.

6 Symposium sponsored by the National Endowment for Financial Education: Financial Literacy in America: Individual Choices, National Consequences. Denver, Colorado, October 9-11, 2002. The State of Financial Literacy in America - Evolutions and Revolutions (Paper). Definition borrowed from Fannie Mae Foundation sponsored field study by Lois Vitt: Personal Finance and the Rush to Competence: Financial Literacy in the U.S. Middleburg, VA 2000.

i Dr. Hartnett is the Director of Research and Strategic Partnership Development for the National Disability Institute (NDI). She is also a senior researcher with the Law, Health Policy, & disability Center (LHPDC) at the University of Iowa, College of Law. Dr. Hartnett provides national leadership in the development of traditional and non-traditional partnerships across Federal agencies, foundations, and the private and non-profit sector on a variety of public policy issues relative to the employment, asset development, and housing and long-term service and support needs of Americans with disabilities.