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Individual Development Accounts (IDAs) are
optional, dedicated savings accounts that provide incentives for
asset-building investments (Flacke, Grossman, and Jennings, 1999). |
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The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (PRWORA) authorizes states to create
community-based IDA programs with TANF block grant funds. |
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IDAs are managed by community organizations and
accounts are held at local financial institutions. |
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Contributions from lower income participants are
matched using both private and public sources. |
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Money set aside in IDAs is disregarded in
determining individual assets. |
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June, 2000: CO, CN, VT recently passed IDA
legislation (May-June). VA began implementing a state-supported
program. CN and VT received
appropriations from SGF for match and administration. VA approved TANF MOE
funds for IDAs, and CO, CT, and HA approved IDA tax credits for match
contributors. MD’s legislation did not pass but gained support. |
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32 states include IDAs in plans for using TANF
funds |
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29 states have passed IDA legislation for TANF
recipients and/or low-income citizens |
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7 states have created pilot programs for IDAs by
administrative rule |
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NJ and NY have pending IDA legislation. FL, MD, and DC will re-introduce IDA
legislation in the upcoming legislative session. |
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Currently over 350 community-based IDA programs
exist |
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And, non-profit organizations in at least 47
states are implementing or planning IDA programs, with or without state
support. |
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Refundable individual tax credit, tax exemption
of deposits in IDA, and tax exemption for withdrawals |
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Tax credit to contributors |
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Direct match from state, required match from
employer who receives wage subsidies, voluntary employer match |
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Introduce legislation to add purchase of
assistive technology as protected savings goal |
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Flacke, T., Grossman, B., &
Jennings, S. “Individual Development Account Program Design Handbook: A
Step-by-Step Guide to Designing an IDA Program,” (1999). Corporation for
Enterprise Development, 777North Capitol Street, NE, Suite 410, Washington,
D.C. 20002, (202) 408-9788/
Sherraden,M., Page-Adams, D., Johnson, L. (1999). Downpayments
on the American Dream Policy Demonstration: A National Demonstration of
Individual Development Accounts, Start-up Evaluation Report. St. Louis, MO:
Center for Social Development at Washington University.
www.gwbweb.wustl.edu/csd/ida
www.welfareinfo.org/individu.htm |
