A new report from the Financial Health Network details the perilous financial state of many people with disabilities. The Financial Health of People with Disabilities: Key Obstacles and Opportunities was produced by the Financial Health Network in partnership with National Disability Institute (NDI), The Harkin Institute, and Principal Foundation.
Nine out of every 10 working-age people with disabilities are financially unhealthy, compared to seven out of 10 without them. One-third are deemed “financially vulnerable.” The financially vulnerable often struggle to meet expenses, have little to no emergency savings and have “burdensome” debt levels. The research also discovered that 93% of people with disabilities are unfamiliar with ABLE Accounts, a popular tax-advantaged asset-building tool available to them.
The results suggest that barriers to financial health for people with disabilities are intertwined and multifaceted. Solutions include greater inclusivity in employment, better financial services and public benefit design, improved credit access, and asset-building opportunities.
“Thirty-three years have passed since the Americans with Disabilities Act, yet it is an unfortunate reality that financial health remains inaccessible to so many people in America,” said Jennifer Tescher, founder and CEO of the Financial Health Network. “This study represents both a first-of-its-kind deep dive into the financial health challenges faced by the disability community and a wake-up call to business leaders, financial services organizations, and policymakers that we’re not doing enough.”
Almost 50% of working-age people with disabilities have annual household incomes below $30,000, more than double the 21% rate of working-age folks without disabilities. Motivation isn’t a factor, as 40% of unemployed people with disabilities want a job, and 23% of those working would like to work more.
The employment barriers are many. They include negative workplace attitudes, insufficient workplace accommodations, transportation difficulties, a lack of education and training, and concern about losing benefits.
People with disabilities are more likely to use costly alternative credit services like payday loans, pawn, title loans, and tax refund anticipation loans than people without disabilities, even after accounting for income differences between the two groups. ABLE accounts – designed to allow eligible disabled individuals to accumulate assets without losing public benefits – remain rarely used and poorly understood.
“These findings confirm empirically what we had already suspected anecdotally – that ABLE accounts are not reaching nearly as many people as who could benefit from this life-changing program,” said Thomas Foley, executive director of NDI. “We hope service providers and policymakers are motivated by these findings to expand the reach and impact of ABLE accounts.”
“The ADA changed the landscape of workplace accommodations in the United States,” said Daniel Van Sant, director of Disability Policy at The Harkin Institute. “However, these data show that there is still so much more that employers could do to make their workplaces and the benefits of work fully accessible.”
A combination of solutions is suggested, beginning with improved public benefits, expanded access to affordable borrowing and increased use of ABLE accounts.
“This report reveals a concerning gap in financial opportunity between people with and without disabilities,” said Jo Christine Miles, director of Principal Foundation and Principal Community Relations. “For Principal Foundation, this emphasizes the need for further investments to both meet the essential needs of people with disabilities and empower this community to achieve greater levels of financial health in the long term.”
“There are over 40 million people with disabilities in the United States,” added Andrew Warren, research lead and Senior Associate, Policy & Research at the Financial Health Network. “And despite the ubiquity and diversity of the disability community, they are still so often marginalized. Our data show that the structural barriers people with disabilities face in earning income, saving, and borrowing have profound implications for their financial health.”