IDAs

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IDAs
INDIVIDUAL DEVELOPMENT ACCOUNTS September 2006
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IDAsA Hand-up to Self-Sufficiency
Self-Sufficiency
Transform to Assets
Save
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IDAs

• Matched restricted savings accounts designed to
• help low-income and low-wealth persons
• accumulate a targeted amount of funds
• to use for a specified purpose
• -- Asset Building --

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IDAs

• Enables participants to
• Set a savings goal
• Save on a regular basis
• Obtain an economic asset for the long term

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Restricted Savings Goals for MDRS IDAs

• Acquire a First Home
• Access Higher Education or Training
• Start or Support a Small Business

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Benefits of Economic Assets

• Stronger, healthier families
• Long-term thinking and planning
• Enhanced self-esteem
• Sense of pride
• More community involvement
• Hope for the future

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IDA ParticipantEligibility Rules
1. TANF eligible OR 2. EITC eligible or
annual income less than twice the poverty level
AND Net worth less than 10,000
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Eligibility (Continued)
2006 Guidelines 200 of Poverty - 19,600 Family
Unit of 1 - 40,000 Family Unit of
4 Earned Income Tax Credit - 11,750 if no
children, 31,030 if one
child, and 35,263 if more than one
child. Net Worth of 10,000 determined as of the
end of the calendar year preceding the
determination of eligibility, excluding the asset
portion of the primary dwelling unit and one
motor vehicle owned by a member of the household.
Net worth is only considered at the time of
application.
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Eligibility (Continued)
Household, not individual, income is used to
determine eligibility. Household refers to all
individuals who share use of a dwelling unit
as primary quarters for living and eating,
separate from other individuals. Income
changes are not tracked for eligibility after a
person is enrolled as a participant.
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IDAs
Participants must have EARNED income!
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Savings Plan Agreement/Contract

• Asset to be purchased
• Amount to be saved
• Schedule of Deposits
• Match Rate
• Financial Literacy Training
• Asset-Specific Training

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IDA Training Requirements

• Financial Literacy
• 8 hours required per year
• Asset-Specific Training
• 4 hours required per year

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IDA Matching Structure

• Participant IDA deposits are matched equally with
  Federal and non-Federal funds.
• Match Rate 4 to 1 saved
• Maximum Savings Goal to be matched
  1,000
• Federal - 2,000 maximum per individual
• Non-Federal -2,000
• Total Available for Goal Up to 5,000

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Monthly Savings Goals

• Monthly Savings Amount Required to
  Reach Goal of 1,000 in
• 2 Years - 42 per month
• 1 ½ Years - 56 Month
• 1 Year - 83 per month

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IDA Savings Accounts

• Interest bearing
• Deposit only accounts
• No monthly handling fees
• Required monthly deposit amount determined in
  Savings Agreement
• Must save for a minimum of six (6) months prior
  to requesting fund disbursements for asset
  purchase

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IDAs

• Short-term gratification is key to helping youth
  see the benefit of saving.
• Monthly Statements showing participants deposit
  and matched savings

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IDA Partners

• Mississippi Department of Rehabilitation Services
• Providing the non-federal match
• Mercy Housing and Human Development
• Administrative services
• Financial literacy and asset training
• The Peoples Bank of Biloxi
• Project Reserve Account
• Individual IDA Savings Accounts

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SSA Waiver for IDA Participants

• Extend current SSI policy regarding the treatment
  of federally-supported Individual Development
  Accounts (IDAs) to non-federally supported IDAs.
  That is
• Deduct from countable earned income any earnings
  that a participant deposits into an IDA
• Do not count matching deposits as income and
• Do not count the accounts themselves as resources.

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General Responsibilities

• MYTI Staff
• Identify MYTI participants interested in IDAs
• Help MYTI participant complete an application
• Deliver Application Form to Benefits Specialist
• Benefits Specialist
• Help MYTI participant complete an application
• Coordinate initial Eligibility Determination
  Meeting with Mercy Housing staff
• Provide MYTI participant necessary forms for
  initial meeting
• Accompany MYTI Participant to open IDA savings
  account

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General Responsibilities

• Mercy Housing
• Determine eligibility to participate in IDA
  program
• Develop Asset Plans, Savings Plans, and
  Participant Agreement
• Schedule and provide financial fitness/literacy
  training
• Monthly follow-up with IDA participants
• The Peoples Bank
• Open individual IDA participant savings accounts
• Provide monthly statements to MDRS

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General Responsibilities

• Project Co-Executive
• Orientation and training for MYTI staff,
  teachers, families, MDRS staff
• Reconcile monthly statements from The Peoples
  Bank and prepare matched savings statements for
  IDA participants
• Form and policy development

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IDA Timeframe

• IDA AFI grant ends September 30, 2009
• MYTI demonstration project to end September 29,
  2008 (Could possibly be extended through
  September 29, 2009)
• Savings by MYTI participants for asset purchase
  should be completed by September 29, 2008
• Asset purchases must be made on or before
  September 30, 2009

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Few people have ever spent their way out of
poverty. Those who escape do so through saving
and investing for the long-term. Michael
Sherraden Center for Social Development
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Contact Information

• Direct IDA questions to
• Rebecca Doyle, MYTI Co-Executive
• [phone] or [phone] cell
• Lisa Ladner, MYTI Benefits Specialist
• [phone] or [phone] cell