The straightforward solution for many people living in poverty is building savings. For the 9 million disabled Americans living in poverty, the answer isn’t as simple.
“The poverty rate among Americans with disabilities is nearly double that of persons without disabilities, and while there is a complex web of federal and state-based programs offering financial assistance to eligible persons with disabilities, policy rules often preclude the accumulation of assets, which are often key for exiting poverty,” says Michelle Putnam, Ph.D., assistant professor of social work at Washington University in St. Louis.
“New research and public policies have the potential to help people with disabilities to have greater economic resources and become more integrated into their communities,” Putnam suggests.
Putnam notes that increasing the financial power of lower-income people with disabilities will allow them to purchase homes, obtain advanced education, develop small businesses and procure assistive technology and environmental modifications.
This important issue affects everyone in the United States and around the world, Putnam contends. “The onset of disability can happen at any stage in life and is often unpredictable,” she says.
Barriers to building wealth
There are a number of barriers to building wealth among the disabled. “This population faces asset rules of Supplemental Security Income (SSI), food stamps and Medicaid programs that substantially limit the amount of assets an individual may hold and still retain program eligibility,” Putnam says.
“Beyond these financially restricting factors, there are also many social and environmental hurdles. First and foremost is the commonly held belief on the part of policy makers, financiers and the general public that poor people with disabilities don’t have the ability or the knowledge to save.
“Second, the numerous environmental barriers to participation in savings programs include a lack of accessible buildings, services and assistive technology as well as insufficient accommodations and public services such as accessible transportation,” Putnam adds.
“Finally, many low-income people with disabilities themselves, like their non-disabled peers, may need to build financial skills and knowledge to support utilization of financial services and asset development programs.”
Putnam and colleagues give the following recommendations for furthering the research agenda on asset development for disabled people:
• Increase the understanding of asset ownership among persons with disabilities.
“Very little is known about asset holdings and wealth accumulation patterns of people with disabilities,” she says. “Research aimed at remedying this lack of information, by analyzing the asset holdings of persons with disabilities and their families, must include an examination of the types of assets held, the accumulation of assets over time and include comparison of asset holdings among persons with disabilities and those of similar persons with disabilities.”
• Develop an understanding of the relationship of income, employment, health and tax policies in relation to asset building.
According to Putnam, tax policies can encourage as well as discourage behavior or activities and are used in tandem with policies that create social programs or provide income transfers.
“Tax policies can encourage or discourage saving — 401K policies permit pre-tax saving, mortgage deductions encourage home purchasing, child credits allow families to deduct ‘costs’ of raising a family,” she says. “Tax policies may help or hinder people with disabilities, but they are often not analyzed in the “mix” of disability policies.”
• Examine the capacity of current asset-building programs to meet the needs of people with disabilities.
“We need to look at the effectiveness of programs such as Individual Development Accounts (IDAs),” Putnam says. “There are only a small number of IDA programs that permit disability-specific savings goals such as the purchase of assistive technology or home or vehicle modifications.” IDAs are matched savings accounts that allow people to build assets for the purpose of buying a first home, going to college or starting a small business.
• Examine the theories of disability and the place of assets in the disability equation.
“Asset accumulation itself has the potential of empowering individuals financially and increasing economic resources,” she says. “As people use their savings to enhance their own capabilities, it seems likely they may reduce the level of disability they experience in specific circumstances and in their lives overall.
“Additionally, those individuals who are able to maintain assets over their life course may have an increased likelihood of sustaining levels of economic empowerment, (delete: self-sufficiency) and community integration and decreasing the amount of disability experienced over their lifetime.”
An in-depth discussion of these research recommendations can be found in “Building Financial Bridges to Economic Development and Community Integration” in the current issue of the Journal of Social Work in Disability and Rehabilitation.
Putnam’s co-authors are Michael Sherraden, Ph.D., professor of social work at Washington University; Karen Edwards, project director for the Center for Social Development (CSD) at Washington University; Shirley Porterfield, Ph.D., assistant professor of social work at the University of Missouri-St. Louis; David Wittenburg, Ph.D., Urban Institute; Karen Holden, Ph.D., associate director of the LaFollette School of Public Affairs at the University of Wisconsin; and Patricia Welsh Saleeby, social work instructor at Washington University.
Last month in Washington, D.C., Putnam presented her and her co-authors’ research agenda as well as findings from related studies she’s led through the CSD at a “Round Table Discussion on Personal and Economic Freedom for People with Intellectual Disabilities: An Exploration of Asset Development,” sponsored by the President’s Committee for People With Intellectual Disabilities.