The Loretta Example

Read Loretta’s story and learn about her financial situation. Then see what financial services and resources may be helpful to her family. 

Four years ago, at age 32, Loretta was in an automobile accident that left her with paraplegia. Ever since, she has wanted to regain her independence so that she can support her family and make a better life for her children and herself.  

Kentucky’s Office of Vocational Rehabilitation (OVR) is helping Loretta find a full-time job. With her skills and experience, she can likely earn between $28,000 and $30,000 annually.

Loretta is excited about returning to work, but she has some concerns. First, she has three children, ages 5, 7, and 9, who will need after-school care. How can she afford it?

The Child Care Assistance Program ( and helps eligible families pay for child care. Families who meet income limits and several other criteria (which may include a single parent working at least 20 hours per week) can receive financial aid to help pay for licensed child care.

Loretta also is concerned about what will happen to the Social Security benefits she and her children receive, and to her Medicare, if she goes to work. Currently, she receives $725 a month, and her children receive a combined total of $362 a month. Their family relies on this money to pay bills and provide food, shelter, and other necessities.

Loretta can receive free benefits planning from OVR (by asking her OVR counselor) or from the Work Incentives Planning and Assistance (WIPA) project: in western Kentucky, contact the Center for Accessible Living; in eastern Kentucky, contact Goodwill Industries of Kentucky. Working with a benefits planner will give her access to personalized benefits counseling, which will show how she can keep the full Social Security benefits for herself and her children during the first 12 months she works full-time.

After that initial trial period, the family’s Social Security payments will stop. However, Loretta can probably get those benefits back quickly if needed. Even after her Social Security benefits have stopped, she can keep her Medicare for years after.

Loretta doesn’t own a vehicle. Without one, she faces a two-hour commute by bus. This not only reduces her time with her children, but also results in significantly higher childcare costs.

She needs a car with hand controls to get to and from work, but she’s unsure how she can afford an adapted vehicle with her income.

Goodwill Kentucky Cars to Work sells donated cars, at a very low cost, to families in need who are referred by government or social service agencies. They provide 12- to 24-month loans.  

Additionally, OVR may be able to cover the cost of adapting the vehicle and adding hand controls. If not, Loretta can apply for a low-interest loan from the Kentucky Assistive Technology Loan Corporation. This program has much more flexible criteria than banks, so many applicants may qualify for loans who would be denied by banks. 

Loretta is pleased to see that it may be feasible for her to work. However, she’s thinking about other financial issues. After two years of legal action following her accident, she was awarded a $55,000 settlement. Since that settlement was awarded, however, she had to spend all but $15,000 on living expenses for her family. 

She also still owes a lot of money for medical bills related to her accident. “I need to learn how to live on a budget and clean up my credit,” Loretta says, “but I’m unsure where to start or what to do.”

A financial education program can help Loretta develop a budget. She has a number of options, including Bank On Louisville, Money Smart, My Money, Cents and Sensibility, Financial Freedom, and Finance 4 U. All these programs provide training on money basics, including budgeting, banking, borrowing, saving, managing debt, and building credit.

Credit counseling may help Loretta resolve outstanding debts and improve her credit scores. Nearly half of employers check credit reports for potential hires, so improving Loretta’s credit could help her land a job. Working with a financial counselor, she can create a plan to pay down her credit card debt without draining her remaining settlement money.

She also can take a “Credit as an Asset” workshop (, or meet with a credit counselor from Apprisen.

There are a number of other financial programs that may help Loretta. Along with financial education and benefits planning, it’s possible for her to find tax credits, free tax preparation assistance, medical benefits planning aid, and savings programs.

The Earned Income Tax Credit and the Child Tax Credit can give Loretta a large income tax refund, equal to all the taxes taken out of her paychecks, plus an extra $2,600. She needs to file a tax return to qualify for these credits, but she’s eligible for free tax preparation help from a Volunteer Income Tax Assistance program.

A benefits planner (through OVR or a WIPA project) can check Loretta’s eligibility for Medicaid, which could eliminate some out-of-pocket costs she would otherwise need to pay for Medicare. Medicaid can even provide her with access to a personal care attendant to help her get ready for work each day.

Loretta’s income from Social Security Disability Insurance ($724 per month) is low enough for her to qualify for a little Supplemental Security Income, or SSI (which would give her Medicaid). Because her savings are too high, she does not qualify for SSI or Medicaid.

However, if Loretta transfers her savings into an ABLE account from Kentucky’s STABLE program, these assets will not be counted by the SSI program. That would enable her to be eligible for SSI and Medicaid while earning income on her savings.

When she starts working, her SSI payments will stop, but a rule called 1619(b) will let her keep Medicaid. A Kentucky resident who receives SSI can qualify for 1619(b) if she earns less than $29,954 per year in wages.

Loretta dreams of buying a home for herself and her children. Currently, all four of them live in a small home they share with the owner that offers them little privacy. At $600 a month, the rent is all they have been able to afford.

Several programs might help Loretta qualify for a mortgage and provide assistance for a down payment and closing costs. These include Kentucky Housing Corporation Loan Programs, Rural Development Housing Loans, or Habitat for Humanity.

She might also participate in an Individual Development Account (IDA). This is a program that lets families with limited incomes save their own earnings toward an asset goal, like home ownership, and receive matching funds from the program.

The Center for Women and Families hosts an IDA program that would let Loretta save money toward a down payment or closing costs.

For the last four years, Loretta has wanted to return to work. She knows that she needs a job to provide for her family, but that she would also benefit greatly from other financial services.

By working with OVR, Loretta can access resources that will allow her to work to reach her goals. She will be able to:

  • Afford child care and an adapted vehicle so she can return to work.
  • Manage her Social Security and medical benefits.
  • Qualify for Medicaid to reduce her medical costs and provide her with personal care attendant services.
  • Live within a budget, while she saves money and rebuilds her credit.
  • Access free tax preparation and qualify for a big tax refund.
  • Make progress toward buying a home.

These services will make it easier for Loretta to regain her independence and provide for her family.


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The SGA Project is funded by the Rehabilitation Services Administration (RSA), Office of Special Education and Rehabilitative Services, U.S. Department of Education Grant # H235L100004