FAQ: Finances
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National
Financial Education
Credit Counseling
- I need help with debt. Are there inexpensive ways to get debt management help?
- How do I find out if I have established a credit record?
- What do I do to establish a credit report?
Financial Assistance- for financial assistance for adaptive technology, health care, transportation -go to topics
- What Federal Financial Assistance is available for people with disabilities?
- I am having a difficult time financially. How can I find financial assistance?
Income Taxes
- If I earned income, can I receive money back on my income taxes even though I received Social Security or SSI Payments?
- Where can I find help with my income taxes?
- What tax deductions are available for families with family members with disabilities or individuals with disabilities?
Financial Planning
- What YOU NEED TO KNOW AND DO NOW to ensure that your assets will not jeopardize your special needs child's eligibility for needed public assistance.
- How do I structure my will and provide a special needs trust for my child with special needs?
Savings Accounts
Utility Bills
State Listings
Wisconsin
National
Financial Education
- Q: I am a person with special needs and I need to know more about financial options available to me?
- A: Financial Education Reference Guides
National Disability Institute and Wells Fargo�s Hands on Banking (see below) have partnered to provide financial education reference guides.
The new guides are designed to provide financial educators, American Job Centers, Vocational Rehabilitation and community-based organizations access to resources and tools specifically for persons with disabilities. Topics include: Credit, Employment, Entrepreneurship, Homeownership, Medical Benefits, Money, Older Adult, Part-Time Work, Savings, Spending, Student Loans, Taxes, Transportation, and Work Expenses.
- Hands on Banking is a free, fun, non-commercial financial education program from Well's Fargo available in both English and Spanish that teaches people, in all stages of life, about the basics of responsible money management, including how to create a budget, save and invest, borrow responsibly, buy a home and establish a small business.
Credit Counseling
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Q: I need help with debt. Are there inexpensive ways to get debt management help?
- A: Visit our NHU page on community and Internet resources on Credit Counseling, with a list of non-profit organizations which offer free or low cost financial consultation, counseling, education and debt management.
- A: Your first step should be to request your credit report from each of the three consumer credit reporting companies - Equifax, Experian and TransUnion.
Under the Fair and Accurate Credit Transactions Act you are entitiled to receive one free copy of your credit report each year. To simplify the process of obtaining your report from each company, Equifax, Experian and TransUnion have created a website, AnnualCreditReport.com, through which you can securly request and view your credit report online.
If you prefer to contact each credit reporting company separately, you may call:
- Equifax, 1-800-685-1111
Experian, 1-888-397-3742
TransUnion, 1-877-322-8228
Your credit score will range from 300 to 850. Typically, a person with a credit score of 620 or lower is considered a credit risk.
If you have had past, serious credit problems you must take steps to repair your credit score before applying for a loan. While increasing your credit score will take time and require an ongoing effort from you, you can see quick improvement by paying down your past debt and by successfully disputing negative information on your credit report.
To learn more about the steps you can take to improve your credit score, visit the myFico.com Credit Education Center.
- A: One issue that may arise is that you have not established a traditional credit record through the payment of credit cards or traditional (bank-provided) loans.
The Federal Housing Administration (FHA) has long permitted mortgage lenders to establish a borrower"s credit history through nontraditional means, including the compilation of performance on rental payments, utility bills, telephone and cellular phone services, cable television service, payments to local stores, etc.
Such records must typically track payments for no less than 12-months and must be supplemented by at least three credit references/ payment verifications from your landlord, utility company, cable company, home telephone provider, etc.
To learn more about how nontraditional credit is treated by lenders, visit the Nontraditional Credit Verification and Evaluation Letter issued by the Federal Housing Administration. Under 2008, find this item at 08-11.
Q: How do I find out if I have established a credit record?
Financial Assistance
- Q: What Federal Financial Assistance is available for people with Disabilities?
- A: There are two basic federal programs that provide direct and continuing financial assistance to people with disabilities:
- Social Security and Disability Insurance Benefits (SSDI) - the amount of your cash benefit is determined by oyour earnings and the number of quarters you worked prior to applying for benefits. This will be different for every person. If an SSDI recipient becomes and employee and earns over a specified amount (changes possibly yearlythey begin a nine month Trial Work Period. Substantial Gainful Activity (SGE) - amount of money an SSDI recipient can earn before losing their benefit. This amount also can change yearly. Medicare Part A and B assist an SSDI recipient with health insurance and these premiums can also change.
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- Supplemental Security Income (SSI)
- For more information on these programs see Pocket Guide to Federal Help for Individuals with Disabilities
- For information about applying or appealing for SSI, go to Disability Secrets.com which provides tips, advice, explanations and answers for working with Social Security. Meeting the definition of disability used by Social Security, applying and qualifying for monthly or past due disability benefits, and appealing disability denials are some of the topics on this informative website.
- The federal government through the Internal Revenue Service also allows Tax Benefits for the individual with disability or his or her parents. When you compute your income tax there are many allowable expenses that can be deducted from income provided you itemize deductions on Schedule A. Some of the deductible items may include:
- Adaptive equipment for mobility or using the telephone.
- Medical equipment.
- Installation of special adaptive equipment for the home.
- Payments to a special school.
- Tax credit for care.
- For more information on what items you can specifically be allowed deductions, contact the "Federal Tax Information and Forms" number listed under the "Internal Revenue Service" in your telephone directory.
- A: Find resources and programs to help with bills and expenses such as Energy Bill Assistance, Low Interest Loans, Debt Relief, Foreclosure Prevention, Budget Counseling and Emergency Financial Assistance, Free food and access to pantries, Medical Assistance and Legal consultations and tips through Need Help Paying Bills. Use this website to locate resources in your area or state.
- A: Find resources and programs to help with bill and expenses on our NHU page on General Financial Assistance. For programs geared toward specific topics such as Arts, Adaptive Technology, Education, Health Care, Housing, Independent Living or Recreation, go to Financial Assistance: by Topic
Q: I receive SSI benefits, however, I am having a difficult time financially. How can I find financial assistance?
Income Taxes
Q: If I earned income, can I receive money back on my income taxes even though I recieved Social Security or SSI Payments
- A: Yes! Many people with disabilities may not owe tax or not earn enough money to file tax returns but they may be missing out on receiving money back from the government for their earned income.
People with disabilities can qualify for the Earned Income Tax Credit (EITC). Visit the IRS Publiction 596 to see if you qualify.
The person with a disability or family must meet the following requirements:
- 1. The person earned income, not including Social Security or SSI.
- 2. Makes less than the qualifying amount allowed, less than $11230 for the single person living alone, married couple without children, $12230, working parent with adult disabled child who lives with parent and household income is less than $29666 and so on.
- 3. You can claim EITC, even if no income tax is shown on the Employer W-2 Wage and Tax Statement
- 4. You will receive a check for $386 or more depending on your situation.
- 5. This refund will not count as an asset or income for SSI purposes.
- 6. If you did not file in prior years, returns for EITC can still be filed within three years of the original due date. There is no penalty for filing late if the government owes you money. To obtain prior returns call (800)TAX-FORM.
Q: Where can I find help with my income taxes.
- A: The Volunteer Income Tax Assistance (VITA) and Tax Counseling For the Elderly provide free tax preparation for people with disabilities. For more information call the IRS at Free File is provided through the IRS on-line. A Tax Wizard will help you find a company. Enter the company's website and prepare and file your federal return without charge.
Q: What tax deductions are available for families with family members with disabilities or individuals with disabilities?
- A: 10 Major Tax Credits and Deductions for Disabled Tax Filers
This guide is provided by gobankingrates.com. It is a guide on exemptions for families with members with special needs, most commonly overlooked tax deductions and other issues such as tax credits, for Veterans and Military members with disabilities, caregivers, adults caring for disabled adult children or disabled parents, tax considerations for specific disabilities and special education concerns.
- A: Financial Planning and Assistance for Families with Special Needs
This guide is provided by militaryonesource for families of U.S. military personnel so the forms may only be for military families but some information covers financial planning for any family with a member with special needs.
Financial Planning
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Q: What YOU NEED TO KNOW AND DO NOW to ensure that your assets will not jeopardize your special needs child's eligibility for needed public assistance.
- A: There are things YOU NEED TO KNOW AND DO NOW to assure your assets as parents, grandparents or other family members do not jeopardize your special needs child's eligibiliy for public benefits. See our NHU Guide on Special Needs Trusts for People with Disabilities
- A: Financial Planning for a Special Needs Trust:
You must plan for the inevitable time when you as parent or guardian may not be around for your child with special needs, remember although they may not be able to handle their own finances, the individual with special needs can be included in the financial plans.
- The purpose of the Special Needs Trust will be to protect assets to improve the quality of life for the individual with disabilities and to provide supplemental assistance for them as long as they live.
- The structure of a trust should allow the child to qualify from programs such as Title 19 or other public benefit funds.
- The special needs trust can only be used to supplement public assistance funds and not supplant them. (To find out what can be funded and the rules on disbursements, see below.)
- You do not have to be wealthy to set up a special needs trust but some trust programs require a minimum amount for the fund.
- You must set up a special needs trust before the person with a disability (the beneficiary) turns 65 years old.
- A special needs trust is funded from cash assets, personal injury settlement, proceeds from life insurance, proceeds from a will, portion of an estate or contributions from family and friends.
- Communicate your wishes for your child or family member with a disability through a letter of intent and a financial plan.
- Include your child or family member as the center of planning.
- Gather a team of advisors and family members in the planning process.
- Select a caring person to manage your Special Needs Trust with a successor if possible.
- Assess your current financial situation and develop a plan. The following documents may be able to guide you in the planning process.
Planning Documents for Special Needs Trusts - the following are excellent guides on the process of planning for leaving assets for your child with special needs so that the child can continue or be able to apply for benefit programs in the future.
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For more information visit the ARC (Advocates for Retarded Citizens) and their guide on Future Planning: Making Financial Arrangements with a Trust by Rick Berkobien and Theresa Varnet.
- Planning Now: A Futures and Estate Planning Guide for Parents of Children and Adults with Developmental Disabilities from the Maryland Developmental Disabilities Council. This guide is very informative and a thorough planning document including a planning check list from the state of Maryland. If you do not live in this state, be sure to check with a special needs trust advisor in your state for any legal statements presented in this document.
- The Special Needs Planning Guide created By Cynthia R. Haddad, CFP & John W. Nadworny, CFP ChFC This book is the definitive guide to special needs planning and offers a check list of what to include in the letter of intent.
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Financial Estate Planning Forms from the office of Ron Graham and Associates LTD, this website offers comprehensive forms to financial estate planning that you can print and use.
All documents are in PDF format, and require the Adobe Reader program
Living Trusts guide covers the Living Trust which is not the same as the Special Needs Trusts. As a parent you may wish to use this tool to outline how you will leave your assets.
For more Special Needs Trust resources for people with disabilities and their families including organizations offering community and pooled trusts throughout the United States, visit our NHU Community and Internet resource page on Financial Planning (Trusts) .
Savings Accounts
The important thing to remember if you wish to keep your SSI benefits and Medicaid that there is an asset limit of $2000. Because having a disability can be expensive for families and individuals, new legislation offers some new tools for people with disabilities to help to pay for disability related expenses.
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Q: What is and how can I set up an ABLE account?
- A: The ABLE account is a way to save money for "qualified disability expenses," without losing certain benefits such as SSI or Medicaid because of their asset limits. Resources and information about ABLE accounts follows:
- A: Individual Development Account (IDA) an account that helps you save money for a special need, education, a home or to start a business. Although you receive SSI this account will not affect your benefits. You contribute money from your earnings from work. With an IDA, your contributions
are matched with money from your State's TANF (Temporary Assistance for Needy
Families) program or from special funds called "demonstration project" money. The matching money may help you reach your goal sooner. To find out more, contact your state TANF agency or local Social Security Office.
1. Only individuals with an age onset of disability prior to turning 26 are eligble. A new bill reintroduced in the U.S. Senate ABLE Age Adjustment Bill S. 651 would increase the age limit up to 46 years of age. Check back here to see if this becomes law.
2. Each state is allowed to set up an ABLE account plan, so you have to check to see if your state has set up an ABLE account system. If your state has not set one up, check to see if it allows people with disabilities to set up an account in a different state and whether the other state allows people to participate from other states. Some states offer state income tax incentives to residents, so if yours does, look at your state plan first. To learn more about ABLE in your state or all the other states, visit ABLE: National Resource Center
3. The ABLE account is an investment plan through the state you choose. Be sure to read the plan documents or get financial advice on what plan would be best for you. Investment plans are not insured and carry risks, charges, and expenses. Fees vary by state so compare costs. Each state's plan offers different investment choices also so try to find low-fee investment options.
4. Earnings from the account are usually tax free as long as you spend the earnings on Qualified Disability Expenses, but if you do not live in the state of your plan, check with your state if earnings are tax free and/or whether the account will affect any state-based benefits or check with your financial advisor.
5. You can contribute to your ABLE account from your own earnings after taxes and so can parents, relatives, which are considered gifts. Because the state of Wisconsin does not have an ABLE program, parents and relatives can claim a deduction for contributing to your ABLE account that you have in another state. Not all states will have a tax incentive. In 2018 the limit for contribution for each calendar year was raised to $15,000. If however you have more than $100,000 in your account, your SSI benefits may be suspendend. You may have to keep track of what is being contributed so it does not go over. Some plans will return the overage to the gifter.
6. If you use the money in your account, you must use it for "Qualified Disability Expenses." It will be required of you as beneficiary to keep track and maintain documentation to prove your expenses are qualified. To understand what is considered "Qualified Disability Expenses," visit Ohio's list of possible qualified expenses. If you withdraw and pay for a nonqualified expense, the amount will be considered income, subject to a 10% penalty, you will have to pay income tax on the earnings and you may jeopardize your means-tested federal benefits programs such as SSI or state based programs.
7. It is a myth that in all circumstances, the account must pay Medicaid the remaining balance upon the death of the beneficiary. Funds remaining in the ABLE account after an individual dies may be used to pay Qualified Disability Expenses, including funeral and burial expenses. Then the amount of any Medicaid payback is calculated based on Medicaid payout after the ABLE account was created and excludes amounts paid by the beneficiary as premiums to a Medicaid buy-in program. Some states prohibit this Medicaid payback provision. Be sure to ask about these laws when you enroll for an ABLE account. Any remaining funds can be designated to the heir under one's estate.
The ABLE National Resource Center (ABLE NRC) is still awaiting guidance from Medicaid on how Medicaid costs will be recouped if the ABLE account owner dies and had lived in one state and had an account in another. The ABLE NRC will publish any updates in their monthly newsletter.
8. Another item in question is whether the interest, earned dividends would count as earnings or income that would affect an individual's SSI, SNAP or HUD benefits.
According to the SSA Program Operations Manual System (POMS), “[t]he funds in an ABLE account can accrue interest, earn dividends, and otherwise appreciate in value. Earnings increase the account's balance. Exclude earnings an ABLE account receives from the income of the designated beneficiary.” Earnings in an ABLE account will not affect SSI, SNAP or HUD (see attached HUD document) eligibility unless the account balance exceeds $100,000.
Treatment of ABLE Account in HUD programs. Section 103 of the ABLE Act mandates that an
individual’s ABLE account (specifically, its account balance, contributions to the account, and
distributions from the account) is excluded/disregarded when determining the designated beneficiary’s
eligibility and continued occupancy under certain federal means-tested programs.
9. For more detailed information on What is an ABLE Account, Eligibility, Who can contribute and how to keep records, balances, distributions, what cannot be included and what can, go to the Social Security website for ABLE Account - Program Operations Manual
Utility Bills
- Q: I am having difficulty paying my monthly utility bills. How can I prevent late charges or disconnection of services of electricity, gas or other utilities?
- A: Utility companies may offer early identification programs that allow you to set payment arrangements based on income and your ability to pay your utilities. If you contact the utility company early that you are having difficulty paying your utilities, you may be able to prevent late charges or being disconnected. You will need to apply to the program. A report of your household income will be required and then call a customer counselor to go over the guidelines of the program.
For more information, contact your local utility company and ask what programs they offer for people with disabilities for payment arrangements.
State Listings
Wisconsin
Q: How can I contact the Wisconsin Electric Power Company Early Identification Program to apply to a payment program to prevent late charges and disconnection of my utilities?
Q: I live in Milwaukee County, Wisconsin. I receive SSI benefits, however, I am having a difficult time financially. How can I find financial assistance?
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