Most low-income familes have few, if any, assets to help them weather even a short-term loss of employment. Policies designed to assist low-income families can contribute to this problem by penalizing those who accumulate assets. In Michigan, asset limts apply to certain assistance programs, most notably the Financial Indepence Program (FIP) which provides temporary cash assistance for families in poverty. Current asset limits are $2,000 for an individual and $3,000 for a family. Participants, with few exceptions, are required to work while receiving assistance and are limited to a life-time limit of 48 months of assistance. Removing or increasing asset limit would require a rule change by the Michigan Department of Human Services.

Helping families become self-sufficient isn't just about encouraging savings or creating more jobs, it's also about helping them become life-long savers, keeping them employed and permanently preparing them for future changes in the labor force. Current initiatives in Michigan designed to address job training and skill development include No Worker Left Behind and Jobs, Education & Training (JET). Michigan must continue to support these efforts and promote life-long learning along with life-long savings.

Every year, millions of dollars in federal assistance designed to help low- to moderate- income workers are left unclaimed by Michigan families. By some estimates, this amounts to more than $900 million in Michigan alone. Benefit access calculation and coordination software is designed to address this problem and make benefits more accessible for eligible recipients and the process of obtaining them to be more efficient. Michigan does not have such an application. Other states like Ohio, Florida, Oklahoma, New York, Arkansas and Pennsylvania do.

This is why the ABPP is supporting the coodinated Michigan Benefits Access Initiative to help bring such a tool to Michigan. To learn more about coordinated benefits calculation and access tools, click here and read the report by the National League of Cities.

Every year in Michigan, more than 600,000 low-wage taypayers are eligible to recieve an Earned Income Tax Credit (EITC) on their federal income taxes. On average, an EITC return puts roughly $1,800 into the hands of a low-wage Michigan consumer. This amounts to nearly $1.2 billion of federal money. To help individuals claim their EITC credit, Michigan appropriates $500,000 to help coordinate the organization of free tax assistance sites (know as Volunteer Income Tax Assistance, or VITA sites) and outreach for the ETIC. Unfortunately, this may not be enough.

Many individuals still do not claim their EITC return, leaving millions of dollars in federal money on the table. In fact, as of September 2008, more than 100,000 Michigan residents had still failed to claim more than $35 million in federal money from the Economic Stimulus package (Center for Budget and Policy Priorities - in addition to doing EITC filings, VITA sites also do stimulus filings). Making matters worse, many of those who do claim an EITC do not utilize or have access to VITA sites, leaving them vulnerable to high fees and predatory Refund Anticipation Loans (RALs).

Michigan could to more to support EITC outreach efforts and free tax preparation assistance, like VITA sites.

For more information on the Michigan EITC, a statewide coalition of VITA sites, click here.

Millions of dollars every year are spent by low-wage consumers for check-cashing services, pay-day lending and on high-cost, rent-to-own products and services. To counter this, initiatives are in place to help bring thousands of Michigan residents into the financial mainstream. Two current initiatives, "Bank on Detroit" and "Bank on Lansing," are modeled after "Bank On San Francisco" and the FDIC's "Alliance for Economic Inclusion." These efforts should be supported and expanded to include other regions thoughout Michigan.

Since they were first established in Michigan through the Michigan IDA Partnership, IDAs have proven to be successful tools to help low-wage workers build and develop assets. Michigan also has successfully established long-term educational savings accounts (MESP) that include a match (up to $200) for eligible households and is a pilot site for CFED's Saving for Education, Entrepreneurship, and Downpayment (SEED) project. Other matched savings account initiatives include the federal America Saving for Personal Investment, Retirement, and Education Act (“The ASPIRE Act”) championed by the New America Foundation, Life-Long Learning Accounts (LiLAs), and universal retirement saving accounts. Michigan should support existing matched saving accounts and expand its toolkit to help working families save and invest in, and for, their future.