Working-age Americans with disabilities face significant barriers to economic success - low expectations, discrimination and a complex public support system that often limits employment opportunities and upward financial mobility.
In addition, working age adults with disabilities are twice as likely to live in poverty than those without disabilities, while the poverty rate among people with disabilities (ages 18-56) is 28 percent compared to 13 percent among people without disabilities. Poverty rates are compounded when taking into consideration additional characteristics such as gender, communities of color and level of education.
While these statistics are sobering, changes to existing legislation could help reduce poverty among this vulnerable population. National Disability Institute recommends the following legislative reforms that, if accomplished, could begin to address and mitigate the staggering instances of poverty among Americans with disabilities across the country:
1. Expand the Earned Income Tax Credit (EITC)
Improve the Earned Income Tax Credit by reducing the age of eligibility to 21 and expand the credit for childless low- to moderate-income workers.
2. Allow Loan Forgiveness Funds to Be Disregarded for Tax Purposes
Exempt federal and private student loan amounts, which are forgiven and discharged as a result of meeting the criteria related to disability, from federal income tax. Extend the same tax exemption to parents that have outstanding student loan debt on behalf of a son or daughter that experiences significant disability or death.
- significantly increase eligibility from age of onset before 26 years of age to age 46;
- allow for additional contributions to an ABLE account above the current annual cap of14,000 for earned income contributions by the account owner up to an additional11,770 (Federal Poverty Line); and
- allow funds to be rolled over to an ABLE account from a 529 college savings account to help families with a child with a disability who realize there are other important needs beyond saving for a college education.
4. Begin to Modernize the Supplemental Security Income Program and Criteria
Increase the general income disregard to $112, the earned income disregard to $364 and increase the resource limit to $10,000 for an individual and $15,000 for a couple, respectively.
Repeal the In-Kind Support and Maintenance Rule that results in drastically reduced benefits when a recipient receives help with food or shelter (even from family members) and the transfer penalty which unfairly penalizes people with up to three years of ineligibility if they transfer a resource.
5. Build Financial Capability for Youth and Adults with Disabilities
Add financial health assessment and opportunities to build financial capabilities, knowledge and skills to requirements in Individual Educational Plans (IEP) under IDEA, Individual Employment Plans under WIOA and Individual Community Inclusion Plans under Home and Community Based Services (Medicaid).
6. Create Financial Incentives to States that Actively Pursue Opportunities for Competitive Integrated Employment
Create a pilot program to incentivize states to transition away from subminimum wage segregated employment and to increase opportunities for competitive integrated employment for youth and adults with disabilities.
7. Market and Educate People with Disabilities about Plan to Achieve Self-Support (PASS) and Ticket to Work (TTW) Programs
Implement measures to maximize utilization and decrease perceived complexity of PASS and Ticket to Work TTW programs for Social Security beneficiaries to reduce dependence on public benefits and advance economic stability.
8. Create a National Medicaid Buy-In Program
Medicaid buy-in allows states to offer Medicaid to individuals with disabilities for a monthly premium. Implement a national Medicaid buy-in program which would allow individuals with disabilities, regardless of the state they live in, to buy into Medicaid to meet healthcare needs and be competitively employed with asset and income limits over $25,000. Expand opportunities for individuals with disabilities to pursue meaningful employment without fear of losing the ability to address their special healthcare needs.
9. Strengthen the Volunteer Income Tax Assistance (VITA) Program
Direct the Internal Revenue Service (IRS) to establish a Community Volunteer Income Tax Assistance Matching Grant Program (VITA grant program) for the development, expansion or continuation of volunteer tax preparation programs to assist low-income taxpayers and members of underserved populations, including individuals with disabilities. Require a financial literacy component and a link to mainstream banking.
These proposed policy reforms are just the beginning of a national dialogue about strategies to reduce poverty for working age adults with disabilities. There can be no meaningful conversation regarding poverty in America absent the voice of the disability community.
Since its inception in 2005, National Disability Institute (NDI) remains the first and only national nonprofit organization dedicated exclusively to designing pathways to economic stability and mobility for persons with disabilities. Through public policy research and development and customized training and technical assistance, NDI has become a recognized leader nationwide demonstrating that individuals across the spectrum of disabilities can work, save for the future and advance their financial capability and economic stability. To learn more, visit www.realeconomicimpact.org. Take the DISABLE POVERTY pledge at www.disablepoverty.org.