RRTC ON WORKPLACE SUPPORTS SEPTEMBER 20, 2004 PRESENTER: DAVID HAMMIS CAPTIONING provided By: Caption First, Inc. >> DAVID HAMMIS: Good afternoon. It's a pleasure to be here. I want to thank VCU, ODEP, T-TAP and the projects that promote information about self-employment. We probably just need to get moving. It's a short 45 minutes. I could spend two days with all of you, but I think we'll get some pretty good information today. The topic is Using Work Incentives to Fund Micro Enterprises. It's just a bit more than using work incentives, but it combines other types of funding sources for small businesses owned by people with disabilities. I'm David Hammis, with Griffin-Hammis Associates, senior partner. And my other business partner, Cary Griffin, works out in the Montana. I'm based in Ohio. We have been working in this field 20 years each, Cary longer and myself less. And of that, probably in the last ten years or so, a bit more focus on self-employment. And the last five years, increasing focus in that area. Today's topic, I'll break it into three main parts. An overview, where I'll look at the key SSI and SSDI work incentives. A bit on voc rehab, workforce investment act. Housing. But since it was marketed as work incentives to fund business, I'll stay in that area. Also, part 2, blending and understanding multiple level financial systems, by combining voc rehab, Social Security, Medicaid, et cetera, in the starting of a small business. And then kind of the final section some recommendations. In part 2, I'll present an example of an actual situation and a family that created a short four-minute video, to show that example. To start with the overview, first I think it's important to understand that the social systems and IRS, basically all systems, look at small businesses based on net earnings from self-employment. In this case I'm defining small businesses as self-employment, in the true sense of self-employment, which is not a corporation, not an S corporation, but any business that is not incorporated, such as a limited liability company that files as a sole proprietorship , a partnership or limited liability partnership, any entity that produces income that folks look at as owners draws. Owners are not paid wages in businesses that are not corporations. They are not taking wages out of the business, but they are being paid the net earnings of the business. For SSI and SSDI purposes, the gross sales minus your IRS deductible business expenses, basically is your net profit. It is the way the IRS looks at it, and then SSI and SSDI multiply 9.235 times that amount. If you had $20,000 in gross sales, $10,000 of business expenses, that would leave you with $20,000 minus the $10,000 expenses, $10,000 of net profit. For SSI and SSDI purposes, they would then multiply that by .9235 to reduce it a bit further. Which means they are giving you a break and not counting all of the net earnings that you make. In that case, that would be $9,235 that SSI and/or SSDI would count, depending on if you were receiving those benefits. That is a derivation of one-half of the self-employment tax that employers normally would pay. But since the self-employed person pays both halves, the Social Security is accommodated by discounting one-half of the self-employment taxes paid. Another key factor, I'm laying ground rules, which is what is net earnings from self-employment, before you pay taxes, after business expenses, times that multiplier of .9235. Another key point for small business and work incentives, or Social Security, SSI, SSDI, Medicaid related systems, is something called Property Essential to Self Support. That is a powerful work incentive in the Social Security system. It carries over into the Medicaid systems of this country and food stamps and Section 8. It says that basically anything that you have in your business or use in your business is not counted as a resource for SSI and Medicaid purposes, including operating cash in your business account. If your business account had $20,000 of cash in it, and normally people that are on SSI or Medicaid can only have $2,000 of total cash resources to keep an SSI check monthly, the $20,000 in their business account wouldn't be counted as a resource. Be careful that Social Security is not counting it as income. But resources, how much would be in that account would be excluded and there are no upper limits. I included the POM citations in these overheads, so you can print these out later and for your reference. I won't read them line by line, but I think it's important that you have the policies. POMS, Policy Operational Manual System in the Social Security world of acronyms, is basically the Social Security day- to-day policies that they use to make decisions on SSI benefits, SSDI. The next key point, following this line of thinking, as far as work incentives for funding a small business, is a Plan for Achieving Self Support. PASS is the acronym for that. In the generalist term, that's a way of getting funding from Social Security to help start a business. It works for a lot more people than most people think. It doesn't work for everyone. When you use PASS funding in a small business, strategically, it's different than wage employment uses of PASS funding for assisting somebody to get a job in a small business. In the business, PASS, not necessarily by intention, infuses operating cash into a business. No matter how you write it or submit it, if it's paying for business expenses or capital expenses, deductible expenses, anything involved with the business, the PASS in the long or short run just basically pushes cash into a business account. If a business makes at least a dollar of profit in a year, the amount of the PASS plan will eventually become the operating capital of the business. If you are approved for $500 a month PASS plan, say for 18 months, at the end of that you'd have $9,000 of operating capital in your business. People often look at a PASS as what it will pay for in a business, such as it will pay for the phone bill for the business startup, or it will pay for a piece of equipment for the business, or marketing, or business insurance, or any number of possible business expenses. But the real effect of a PASS isn't so much what it pays for, it's the fact that you're actually putting $500 of your own money into the business account. The Social Security views a PASS and so do the other related systems, such as the IRS, as your own money going into a business account each month. I'll belabor this just a bit. It's so critical. Over and over I find that it's not understood clearly, even though a PASS is being used to pay for various expenses for a business, its real net effect isn't so much which business expense it paid for, but the fact that it's basically just putting cash into your business each month. To summarize that, the effect of that from an accounting standpoint is a good accounting outcome in the fact that it does not affect profit and loss. It does significantly affect cash flow where people that are resource poor already because of staying under $2,000 in their personal lives, generally don't have a lot of operating cash for a business and come out ahead by using a PASS to help fund their business. It's a powerful funding source. I included a series of these program operation manual system regulations today. Quotes from them, as accurate as I could get the quotes. Again these are out on Social Security's website. They are just the quotes for public use, which means Social Security could update them tomorrow. There could be some corrections, so it's always good to keep track of any of these policies. Just a few excerpts that affect self employment, basically, Social Security is going to need a detailed business plan. One of the files included in the Web handouts on this webcast is the business policy requirements for a PASS plan. It's clear, which makes it easier to understand. It's not ambiguous. If you don't have your business plan done, Social Security will allow you to submit the PASS. And it's possible to use a PASS, depending on the mathematical combination of benefits, that it maybe works out for you to have someone write the business plan. So PASS can be used to write a business plan, feasibility study. You don't have to have a business plan right away when they are submitted to Social Security for approval for a PASS, but eventually you'll need a detailed business plan for a business. Start-up costs. It's important to understand how PASS policies address start-up costs. The biggest change and the most important one is that the PASS policies allow for up to 18 months as an assumed minimum number of months to start a business. The reason I mentioned change is years ago PASS policies had a maximum of 6 months just for a business to get started, even though Social Security approved them often longer than six months, because six months was kind of an unreasonably low number of months in order to start a successful business. In policy, it used to say a maximum of 6 months. A significant change since around July of 2000, when Social Security altered that policy to say a minimum of 18 months, a PASS could be approved for a longer period of time. Another big change that occurred in that time frame is that a PASS expense used to not be used both as a PASS and a deductible business expense. It didn't make sense. Because if a PASS was used to fund your business, it would be used as a business expense. Even a capital item would be depreciated as a business expense. That was changed. Now it says that a PASS expense can be used for starting a business and as an excludable business expense. I'm not sure excludible is the right word, but it can be used as a business expense from an IRS perspective. PASS POMS on self employment. Just a reiteration of a minimum of 18 months to start your business. If 18 months isn't long enough, and you can show a good reason why you would need 22 months or 29 months or 27 months or whatever, you certainly could request a longer PASS. Often if you're doing well with your business and need some reason to go, you know, a bit longer, Social Security is pretty open and flexible at this point in trying to work with people with PASS's. Not every PASS specialist or approver in the country shares that view, but for the most part these are all general terms. Social Security has been great at working with people trying to figure out how to create an employment goal or self-employment goal that actually really works for someone, instead of trying to stick too closely to the policy guidelines. Other related work incentives. The PASS work incentive is probably the whole focus of today, but I just covered some of it. I'll cover a few others. PASS is probably the system that I've been involved in the most as far as funding small businesses along with voc rehab funds and some work investment funds. Probably in the last year we have had hundreds of thousands of dollars of PASS's approved and if you add in the VR funding, various businesses that we work with, probably in the last few years in the ranges of millions over probably the last ten years or so, it's hard to calculate the exact numbers, but it's a powerful tool as a stand-alone business funding tool, too, to some degree. Because it simultaneously pays for expenses that you need for your business, but mostly what it does, at the same point in time it infuses cash into your business each month or builds operating capital. And businesses generally suffer from lack of operating funds. A few other work incentives. Impairment related work incentives don't work very well with small business, generally because you used that expense in the business to get from gross sales to your net earnings. These are called IRWEs. They tend to not work well with businesses, but sometimes they apply. Again it's simply because you used that expense to deduct from your gross sales to get to the net earnings. Occasionally it might be for medications, which wouldn't be a deductable business expense. Impairment related work expense would be an ongoing cost associated with each month of the business or each year. But it wouldn't really be how to get funds initially to start a work. Blind work expenses, the next category, are powerful tools when they apply and someone is blind and they can use them. It's an SSI work expense only. It doesn't work for SSDI. If it fits the operation in the person's situation, then use blind work. They can allow for an SSI check to basically not be reduced due to earnings, because you are able to write-off quite a bit of expenses that are very generous in a sense, you can write-off taxes paid to the IRS, state and local as a business expense -- as a blind work expense, and in a sense not have to work before tax income but actually after tax income. So blind work expenses are powerful. Following that line of thinking, all the SSI work incentives, 1619 B, student earned income exclusion, the general income exclusion, earned income exclusion, impairment related work expenses, basically, all of the SSI work incentives apply to self employment in some frame or another and work well with small business income. They just don't particularly fund the business to start up. The only one that really funds a small business startup is a PASS plan. SSDI, the Social Security Disability Insurance, has two other kind of additional work incentives that relate to self employment. In that system, by design, it's constantly trying to figure out, or assuming you're working, are you earning over SGA or are you not earning over SGA? SGA stands for substantial gainful activity, a legal premise of the Social Security system. In that context, these two work incentives could provide an approach where if you earned over SGA this year, which is $810 a month of net earnings of self- employment, and you earned a thousand dollars, $1500, or higher, and you had something called unpaid help. Unpaid help in the simplest terms would be someone, a friend or relative assisting you with your business that normally any other business owner would have to pay someone to assist them. In that case if you could assign a value to that, my husband or my wife drives me to and from customer appointments, because I can't drive, and I don't pay them, that is basically unpaid help. It's worth $200 a month, $150, or $25 a car ride. Or, you can assign a fair value to that, based on fair labor rates. You could deduct that from your net earnings to see if you're over the $810 per month SGA figure. If you earn a thousand dollars a month net, but you have $300 a month of expenses that were unpaid help from family members, friends, or even just a group of local students who came over and helped move everything around in your business that any other business might have had to pay quite a bit of money to have someone move furniture in their business, you could assign a value and it could allow you to earnings less than $810 per month figure. The other expense is unincurred business expenses. That traditionally applies to voc rehab as an expense that the business owner doesn't really incur. VR incurs the expense. It pays for the expense of your business. It buys your business a piece of equipment and the VR traditionally has what they call a per vendor. They have a contract that provides that equipment. They send an invoice; they pay the bill and keep the receipt. Your business wasn't able to write that equipment off as an expense nor was it able to depreciate it, because VR purchased and owns it. Social Security said VR incurs the expense, so it's unincurred to your business. VR paid the expense. VR is basically artificially inflating the profits of your business. The result is that you have a more profitable business and you pay higher tax, and other interesting things. The other results is that Social Security says that's not really what you earned. We will allow you to deduct that, not for purposes of paying taxes, but for purposes of trying to figure out if you're over SGA, $810 a month. The $810 per month is higher if you're blind. The number this year is $1350. Those numbers change each year. Next year they will be indexed a bit higher. Be careful with this webcast five years from now thinking it's still $810 per month. It's actually indexed by cost of living now every year. Other self employment. I briefly touched on voc rehab. To summarize that briefly, the VR, basically. I'm using words like "basically" and "generally," because VR in each state varies so widely. It's hard to say here is exactly how VR does this. But generally, they tend to fund equipment purchases as a priority for a business startup. Often as a secondary policy, they also fund some beginning operating expenses and sometimes operating expenses even as long as 2 or 3 years out. But, those are more the extremes, and generally what VR is doing is funding equipment expenses, if they can. VR tends to retain ownership of that equipment, in some States, I've been told forever. By a VR director at one state, they never release equipment purchased for a business. In other states, I'm told that the local VR counselor can release it as quickly as they want, while the case is opened or as soon as it's closed within 3 months. There is a huge range that we never give the equipment to anyone to the day after we give it to you, it's yours. As a rule, the VR tends to retain the ownership of the equipment for a few years, not as a rule, but as a generalization around the country. Often tied to some kind of not real, but some fictitious depreciation schedule to say the equipment is only worth so much three years from now, so then we will give it to you for your business. The problem with that is that you can't depreciate equipment that you own or deduct it, so the VR purchases directly impact profit and loss. Whereas earlier I mentioned how PASS doesn't affect profit and loss. It's a very equitable type of funding. But VR purchases tend to, again, I'll use the word "tend To, not always" have very direct impacts on profits and loss. The impact usually is that the VR funds artificially inflate your profits quite a bit, because they basically removed an expense from your business. VR paid for your business rent for 3 to 6 months. Any other business would have had to pay that. But if they paid for your business rent, and you can't deduct it as a business expense, they paid for it and they kept the receipts. Normally you would have had $3,000 worth of profit, but VR paid for $6,000 worth of expenses, they just inflated your profits to $9,000 by the fact that you didn't have to pay for those expenses. So VR is very, significant in direct funding impacts on profit and loss. Workforce investment act. To date in my experience, I am constantly doing business plans for support, PASS support, and funding support. Flying to VCU, I had two business plans sent to me in e-mail this morning. I worked on one last night until 1 o'clock, and on another one in Arizona. There's just a continuous flow of business plans and support. There are a number of people trying to figure out how to do this in all types of agencies around the country. But workforce investment act related ones, from my direct experience in Georgia, Montana, Indiana, and a number of states, tends to not own equipment. If they purchase equipment through demonstration, innovation grants, or customized employment grants, by the Department of Labor, Workforce Investment Act, simply buy the equipment, give it to the person, and don't retain any type of ownership for the equipment. It's somewhat limited and some of the grants are new, so it could be possible that some Workforce Investment Act Grants are keeping ownership of the equipment for a number of years or three years, but I haven't seen that. I haven't seen it in policy. I'm trying to slowly work with those systems to understand that if there is even a higher level policy involved at the Department of Labor at some point, technically states are supposed to have an integrated kind of workforce, Department of Labor and VR higher level one stop policies that mesh with each other. But, I'm not sure they are that integrated yet. I hope they are, but I haven't seen that yet. Not to belabor the Workforce Investment Act, because probably a lot of you are not involved in those grants, they are not as widespread as most of us would love them to be. But, when VR purchases deductible business expenses or Workforce Investment Act does, they tend to keep the receipts for those expenses, which again tends to inflate your profit and loss. The Workforce Investment Act tends to have that effect of inflating profits, similar to voc rehab. But, they also have the opposite effect of holding onto the equipment where VR tends to have some policies around keeping the equipment. Self-employment social system startup resources. SBA guaranteed loan, bank loans, non-bank loans, family loans, credit cards. Those types of loans have the same impacts as they would for any business whether you have a disability or not. There is no intrinsic effects or indicator on SSI that are negative or positive. They are just standard business practice. Medicaid funding has had interesting experiences around the country and vary widely, but it's supposed to be a fairly uniform system. There are a number of waivers, grants, Medicaid infrastructure grants, and Medicaid policies in general that still seem to be fluctuating. I've seen Medicaid in one state pay for equipment for a business with Medicaid funds that had nothing to do with any medical need. At a higher level in Medicaid, that is usually not a very sound concept. But it seems to be working for some states and some small business funding. It's fairly unusual that Medicaid would buy equipment that wasn't medically related, but simply business related and needed for a business. Medicaid funding when it's used in a business, if it was accounted for properly, a lot of these are not accounted for properly, but if they were, in the person's personal world and business worlds they would inflate profits. But since the Medicaid funds are generally keeping the receipts for the business expenses, buying them directly and not going through the business and just basically giving the business or paying the business's bills, without the business being able to deduct it, so again it would inflate profits. Other grants, Native American, Developmental Disability Planning Council generally artificially seem to inflate profits for businesses. I included self-employment research in the handouts, Rural Institute research and Iowa small business development work and statistics. They say 80 to 90 percent of small businesses are still in business after five years. That is not particular to people with disabilities. That is kind of a national average. It does help dispel some of the myths that 9 out of 10 businesses fail. If 80 to 90 percent of the small businesses were started and five years from now are still in operation, it would seem like they haven't failed. There are some strong myths that businesses tend to fail quite a bit. There is a study attached that the President's Committee did that talks quite a bit about percentages of grants that have been studied probably for the last four or five years, seven years, somewhere in there, looking at small business and people with disabilities and choice type grants. In the 20 to 30 percent of people with disabilities, given the informed choice that you could actually start a business and it would be something that you could own, would prefer a business. Yet in the statistics, and there are not a lot of statistics on the developmental disability system, for instance, but it does seem that maybe even less than 1 percent of people with developmental disabilities are assisted or own businesses in some sense. There is a big gap between less than 1 percent even maybe knowing that they have a choice to start a business let alone starting one. Yet, the other national data shows that 20 to 30 percent of people with disabilities would choose to own a business if they could. I don't have the latest data, but data that probably in the last five years or so, from VR national statistics show 4 to 5 percent of their closures involve small businesses. 5 percent is better than 1 percent, but a ways away from the 20 to 30 percent that people might choose. There are wide variances in VR policies nationally, too. Some experiential assumptions. I struggle with or keep trying to figure these out as I go along. Families taking lead for small businesses seem to have a higher success rate. That is true in regular small business. I'm not sure if this is the right word, but if you ignore the whole notion of disability, the Small Business Administrations top 100 businesses of the year I think posted this 60 or 70 percent of those businesses were family owned. Certainly that follows the field of disabilities, too, in the sense that I find that there are more businesses being started when families are involved than there are when families are not involved. Some of the frustrations of that in our system is the number of people that are served by the social service systems that don't have any family involvement at all. The tough challenge for us is how to help people, where the family passed away or whatever, to have the same choices as people who have strong family supports. Is self-employment a cop-out? Is training and technical assistance needed? Certainly, ongoing training for any skill set is important around the country. I'll go through an example, this is about a 4 minute video. Take a look at a business funded by voc rehab about a year and a half ago for $18,000. Also, they used $10,000 PASS to not only pay for business expense, but also to increase some operating capital and Medicaid waivers involved with this business. (Videotape.) >> I have always thought that Nick would do well having his own business. Because Nick has a skill, but he doesn't fit into the social norm of a job. The person with a disability often times would like to do things, number one, on their own, or they would like to do things for other people. They want that, that “feel good” feeling also. When I went to a conference, I heard about a business. And from that moment on, I felt this was something that I wanted to pursue for Nick. It took almost a year. There are a lot of resources out there for a person with a disability to start their own business. You do, though, have to go through the regular channels and write a business plan, work with your local vocational rehabilitation center. Also, you also have to be willing to contribute a lot of your own time and energy to making a plan that is viable. Bridges of Indiana, my business, needed a lot of copy services. We began to think about what Nick likes to do, and what he can do. He has a digital copier, and inserter folder. And he loves to shreds. He has a shredder. And he does all of our in-house printing. We are trying to teach Nick that when he works, he earns money. It's a concept that people with disabilities are not taught that when you work, you earn money. And, they don't get a work ethic. It's hard to connect the two. It's been interesting to watch him finally grasp some idea of, “When I make more copies, I make more money.” Nick's interaction with people here at the office has been interesting, because it's evolved. At first he was very shy and very quiet. He would come in and go downstairs. And when he was picking up his shredding, he would poke his hand around a corner and ask. Now he says, “I'm after so-and-so's shredding.” He is very interactive. He has his favorites that he likes to tease! >> No. You can't take my drink. I'll be thirsty. >> He just enjoys working here and being here, and I think he enjoys being part of something. >> He brings so many gifts to all of us, especially when we have an office that can be stressful. You stop and remember this is why we are here when we see the progress that he makes on a daily basis. He is a joy and treat to be around. >> People need to know that Nick is not just a disabled person. You can't look at a person with a disability and just label them. You have to know them individually. And if you didn't get to know Nick, you'd be missing out on a lot. >> Interacting with a person with a disability is no different than interacting with anybody else. Some people talk a lot, some people don't. Some people make eye contact, some people don't. It does take a little effort to get a response from Nick or a response you're used to seeing. It's just that you can't be scared of people that are different. I think the most important thing with a person with a disability being out in the community and being there for the people to interact with is that people realize they are not scary; they are not dangerous; they are just different. Nick's disabilities will always be a challenge for him. But they are part of who he is. They are more a strength than they are a weakness at this point in his life. Many people think of people with disabilities as not being able to do things. All the things why they wanted to put Nick and a lot of people with disabilities in a box are now the reason he is getting out of the box. I'd like to encourage parents or other responsible people to look outside the box. Look at what struggles are there. Believe in that person with a disability. If you think they can do it, they probably can. (End of video clip) >> DAVID HAMMIS: I thank you for letting me show that video. It's about four minutes. I think Peggy did a fantastic job of putting that together. She was pretty excited with her son Nick and putting that business together for her son. She is also a business owner, as she mentioned, of several businesses. This is a summary of some things that maybe were or were not clear in the video. Some of the issues that Peggy was concerned about or struggled with, Nick is at that $564 per month of SSI, which is basically the maximum single SSI rate without a single supplement that they can get in the state that they are in. After high school, he never had any employment for two years. Peggy approached VR at different points, trying to figure out if self-employment was an option. From her perspective, there was some initial resistance, or maybe not resistance, but maybe not understanding how her son could own a business. Nick expressed this to VR, too, in the ways that he could. There seemed to be some resistance when we met Peggy. Medicaid supported living waiver. Nick receives some of his personal support services during his day through kind of an individual budget. There was strong fears of losing SSI or Medicaid, which is common concerns in situations like that. There was this kind of barrier, “What if I had over $2,000 in cash resources? I'd lose my Medicaid. What if I had a business that was too successful?” Again, low assets, too, below $2,000 that we're kind of struggling with, which is typical of SSI, Medicaid. At that point in time, no local community rehab provider would even consider self- employment or spending time or energy trying to pursue small business options, in Nick's case. The solution from Peggy's, and I think she summarized this better in the video than I, but to some degree, it's not said, but a family developed business plan. Peggy spent time. As a business owner, she knew how to write business plans. She needed help with the VR and Social Security issues - unlimited cash and property assets. She, Nick, and the rest of their family understood that Nick's business could own an $18,000 copier machine and could have $20 or $30,000 in the business account. There was a business analysis that helped reveal that through the Social Security planning and outreach services around the country, that Nick's high Medicaid use afforded him an individualized Medicaid threshold, through the traditional 1619 B policies. It's a longstanding policy. It's not a new, radical new Medicaid waiver that that state has. 1619 B applies throughout the country. It has since the mid '80s. This he could earn up to $64,000 of net earnings in his business and still be eligible for Medicaid and SSI. He couldn't get a cash check each month making that kind of money, but he would continue to receive Medicaid. That certainly influenced Peggy and Nick to go forward with their business plan and request a voc rehab and Social Security. I like to show this scenario quickly as an example. These are better in the handouts. The actual spreadsheet from Nick's business plan, the actual business plan, and the PASS plan are attached, if you want to look at those. I recommend it. At the end of 2004, the gross sales were roughly $32,000 and the net profit around $21,000. The starting cash at beginning of that year without a PASS was $255. And the ending cash was a minus $1,095. If we looked at that scenario, having an ending cash of minus a thousand dollars is not healthy for the business. That means that the business had to get another loan or put something on a credit card. He is not paying his bills. By adding a PASS into this situation, what changed and generally changes for businesses that involve PASS’s, whether you have SSI and SSDI or just one or the other, and you put that in a PASS, no matter how you spin those numbers, the net result is more operating cash. A comparison of the same numbers with the PASS is having More cash at the end of the year, more operating capital. Gross sales are the same, the business expenses, net earnings are the same. But the operating cash goes from a minus $1,000 to almost $9,500. So the PASS has a significant effect on creating operating capital or cash. All the various funding tools that I'm aware of, VR, Workforce Investment Act grants, PASS is probably the most solid in clearly infusing operating capital into a business, often in the disguise of paying for this business expense, business equipment, business rent, or business insurance. It doesn't matter what is assigned for PASS to pay for. The real result is an increase in the operating capital. Highlights in this scenario. Some people say you can't write a PASS when you have no other income. Nick had no other income. From a business perspective, starting a business, you have to project that you'll earn money. When you project that, each year you have to give SSI a yearly projection of income. They average things yearly. They don't apply it monthly like they do in wages. SSI is going to reduce your SSI check whether you earn the money or not. One of the interesting advantages of that is it also creates the opportunity for this PASS or this work incentive funding tool to be used, based on projected earnings, even though you haven't actually earned them yet. Higher ending cash directly due to a PASS. I summarized that a moment ago. Just a couple quick highlights, both scenarios with or without a PASS indicates that the business owner would be paid all the profits. It's a bit of nontraditional business planning. It works best because of the second point on that slide that talks about the IRS attacks you on your net earnings whether you take them out of your business or not. The SSI will reduce your SSI check based on the earnings. Section 8 rent will go up. If you don't take out the net earnings, if you haven't figured that out well, you won't have enough money to pay the personal bills. As a worst case scenario, will your business survive if we take out all the net earnings each year and still have operating capital? That's a good planning approach that we have developed over the years. Finally, I have a couple minutes of recommendations. If I could have my wish in this field of work, I would think some kind of directive to disability employment service providers, maybe from self advocates or organizations that promote opportunities for people with disabilities to provide self-employment as an employment option. If you serve hundreds of people in your agency, and it's not allowed as a choice, then I would think that is a concern that you should maybe look at. Is it possible to provide that option to people? It would be a legal option in the world of this country of being a citizen. If you're a citizen and you want to start a business, you can start one this afternoon. Participate in training and TA. I think ongoing training and technical assistance is good in any field and any case. But the business field is a fairly involved set of information that generally doesn't just kind of tick itself off the pages of a book and work for you. You need a mentor, training, something ongoing, similar to the way that the training and technical assistance has been provided throughout this field by universities. Demonstration grants and system change grants that have gone on for years and years, certainly a focus on self-employment and disability would be one of my recommendations. Coordinate with Social Security's benefits, planning assistance and outreach, technical assistance and training, outreach staff and the country, voc rehab, Medicaid, food stamps. BPAO staffs are listed on VCU's benefits center resource site, the University of Missouri, and also at Cornell's website. Free training centers for Social Security. All states have those, and certainly understanding the benefits and implications would be important to any business owner involved in those systems. National state sponsored self-employment efforts. I would think that similar to other large initiatives or minor initiatives after all the years, a coordinated national state grant funding approach will continue to promote self employment so that people can choose an option that maybe in a lot of cases is less than 1 percent or less than maybe a 10th of a percent. It seems unfair in a world that has much higher percentages of self-employment in the general population. Fourth would be to develop capital cash loans, guaranteed employment loans, for people who don't fit well into work incentives, like PASS plans, to help provide operating capital. Often there is a huge number of people who clearly don't fit in the boxes that PASS plans and work incentives fit well. Yet, there is not a lot of operating capital or some way to get cash for a business. VR has the authority according to RSA technical assistance circulars to guarantee principle payments on small business loans. Similar, to guarantee student loans, I would promote guarantee self employment loans. Guaranteed student loans have been accepted by the country for decades, and guaranteed employment loans which could include self-employment, would seem like a natural fit to that. Ticket to work long term payment approach could be used for people with ticket to work. If you got a loan, and the ticket is working, it could pay back the loan over a time frame like 60 months which could fit a lot of small business loans. Develop a professional national trade organization. Provide structure to professional development and creditability. People with disabilities actually stated in some of the President's Committee's work that they didn't want a people with disabilities small business trade organization. They thought professionals ought to have that so that they could understand their own skills and contributions and continue to build their credibility. Blended funding, ongoing training and TA, all the funding sources I named this afternoon. Develop a Medicaid waiver task force. This is to try to figure out the self-employment provision, if they are there, how clear they are, what could be done to enhance them with Medicaid? Medicaid is generally mirroring Social Security policies, but it would be good to make sure that some state didn't create some nuances that doesn't work well for someone in those states. Finally, to create baseline data, don't spend years collecting it, but get something. Again the assumptions are less than 1 percent usage, a lot of disability arenas and subsets. Try to figure out if we can hit some of those 20 to 30 percent targets at the President's committee. Within existing employment services, I think certainly possibilities exist with tools and the services we have now. To close, thank you very much. I hope this is useful. And certainly feel free to e-mail, based on the website links or anything that would work for you in the next week or whatever if there is something useful we can do. Thank you very much.