Savings for Working Families Act Reintroduced

The Savings for Working Families Act was reintroduced in the U.S. Senate by Senators Rick Santorum (R-PA) and Joseph Lieberman (D-CT) last April. The Act would authorize the creation of 900,000 Individual Development Accounts (IDAs) for low-income individuals between the ages of 18 and 61.

IDA program participants would save money in tax-exempt accounts to be used toward asset goals such as home purchase, postsecondary education or training, and business startup or expansion. Participants would be allowed to deposit up to $1,500 in IDA accounts offered by financial institutions. Participants may make withdrawals for specific, goal-oriented purchases, but they must complete financial education courses before making a withdrawal. The Act also would provide for tax credits to financial institutions for administering the program and for matching IDA clients’ fund contributions. With the financial institutions supplying some of the matching funds for IDAs, more state agencies and nonprofit organizations could apply for federal Assets for Independence Act or state IDA funds to offer IDAs to working families.

The bill was read twice and then referred to the Senate Committee on Finance. Funding is the biggest challenge facing IDA programs, and the Act would help many low-income Americans get ahead. Contact your senators and voice your support for the Savings for Working Families Act.

For more information, contact Dory Rand , Sargent Shriver National Center on Poverty Law, at 312.368.2007, or see www.idanetwork.org.