VITA Plus: Linking Tax Clients to Benefits Screening

This commentary is part of a series highlighting the work of the 2013-14 Ideas for Action Award winners, sponsored by The Northwest Area Foundation, University of Minnesota, and University of Washington. This award recognizes organizations that take practical and innovative approaches to helping low-income individuals.

Tax season has long been an important time for low-income households, who get crucial support from a variety of tax credits. And Volunteer Income Tax Assistance (VITA) sites provide an essential service by helping these people file their taxes and claim crucial tax credits. Building off the success of these programs, the First Nations Development Institute has worked to expand the array of services and assistance offered at these sites. These new “VITA Plus” programs offer a powerful new tool for helping poor Americans build the assets necessary to move up the economic ladder.

Between 2011 and 2013, the First Nations Development Institute helped pilot VITA Plus sites on American Indian reservations. These initial programs showed substantial promise, with at least 25 percent of clients receiving access to asset-building and public benefits programs. Our successes with VITA Plus demonstrate that taking full advantage of existing intervention opportunities, streamlining benefits screening, and connecting people directly to social services can deliver big returns for vulnerable populations.

One successful VITA Plus trial took place on the Northern Cheyenne Indian Reservation, in southeastern Montana. The reservation is centered around the town of Lame Deer, the tribal and government agency headquarters and home to the Chief Dull Knife College, which for years has sponsored a VITA site through the college۪s cooperative extension program. More than 40 percent of the Lame Deer population lives below the poverty threshold, and research conducted by the First Nations Development Institute found the area had high rates of expensive refund-anticipation loans that were draining hard-earned money from taxpayers.

Chief Dull Knife College۪s VITA program has already had success in helping residents file Earned Income Tax Credit and Child Tax Credit returns. However, the high poverty rate coupled with the refund-anticipation loans made this an ideal location to test the new VITA Plus program. The goal was to screen community members for additional public benefits and steer them toward asset-building and financial empowerment programs. In 2013, the Chief Dull Knife extension program partnered with a local nonprofit, People۪s Partnership for Community Development, and a statewide development organization, Rural Dynamics, Inc., to help get the project up and running.

An intake form developed by extension staff to collect information about each client۪s family structure and annual income was a key element of the program۪s success. With this information in hand, a newly hired assets liaison helped client families using an online benefit screening program called Bridges to Benefitsa multi-state project connecting individuals and families to support programs and tax credits. The online screening tool takes into account variables related to income and family structure and then provides information about whether an individual is eligible for a wide range of programs, including Medicaid and child care scholarships.

While there were some challenges to implementation, in the end, the program was successful on many levels. As a VITA program, more than 500 returns were filed, and more than $1.1 million was brought into the community in tax refunds. One hundred thirty-five clients completed intake forms, all of whom were found to be eligible for at least one benefits program. The assets liaison assisted 18 individuals with benefits applications, and an additional 13 took applications home to prepare.

The VITA sites also linked clients to financial empowerment programs. Of the 135 clients who filled out the intake form, 96 were referred to the People۪s Partnership for Community Development to learn more about financial empowerment programs, where more than two-thirds of them signed up for services. All of these interested individuals attended a financial education class, and many have started an individual development account program, become active in a credit-builder loan program, or completed an entrepreneurship class. One participant even submitted his completed business plan to the Montana Indian Equity Fund program and received a grant to start a small business.

Success like this in a high-poverty community underscores the importance of continuing to invest in and expand the VITA program model in a way that leverages the intervention opportunity. It also illustrates the value of an online screening tool that facilitates easy access to eligibility information. But, those tools need to include tribal benefit programs that may be available to tribal citizens. Montana has seven tribal nations, each with its own benefit programs, but the Bridges program did not list tribal benefits. Further investment in this promising model can help address this shortcoming and ensure that low-income individuals are receiving the best possible assistance.

Streamlining access to benefits and services meant coordinating the expertise and capacities of a number of organizations. We have effective programs in place to assist those in poverty and a number of organizations committed to assisting those in need. Through the VITA Plus model, we have a tool to help bring this assistance together effectively and efficiently.

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Sarah Dewees is the senior director of research, policy, and asset-building programs at the First Nations Development Institute.

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