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Friday, October 8, 2010

Individual Development Accounts (IDAs): Background and Current Legislation for Federal Grant Programs to Help Low-Income Families Save

Gene Falk
Specialist in Social Policy

Individual Development Accounts (IDAs) are savings accounts to help low-income families and persons save for specified purposes, usually education, purchase of a home, or to start a business. Current IDA programs match an individual’s contributions, much like retirement 401(k) accounts. The Assets For Independence (AFI) Act, enacted by Congress in 1998, specifically authorizes IDA demonstration programs. Authorization for the AFI programs expired at the end of FY2003, though Congress continued to appropriate money for the program. P.L. 111-117, the omnibus appropriation bill for FY2010, provides $24.025 million for AFI programs. AFI has been funded at that level since FY2008.

States are also given authority to use funds from the Temporary Assistance for Needy Families (TANF) block grant to fund IDA programs. The Deficit Reduction Act of 2005 (P.L. 109-171) “reauthorized” TANF through FY2010, making no changes to TANF’s rules for IDAs.

Date of Report: September 28, 2010
Number of Pages: 9
Order Number: RS22185
Price: $19.95

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