Individual Development Account/Matched Savings Program WVIDA Initiative

Transcription

1 Individual Development Account/Matched Savings Program WVIDA Initiative

2 Presented By: Patricia A. Scott, Program Manager

3 Who are we? 3 Kanawha Institute for Social Research & Action, Inc. Faith-based and community-serving initiative of Ferguson Memorial Baptist Church. 501(c)3, Tax Exempt organization. Established in First KISRA program began in Engaged in community economic development in West Virginia.

4 Our Vision & Mission 4 Vision: Communities in West Virginia will be strong and self-sufficient. Mission: We serve and empower West Virginians through education, employment, economic empowerment and behavioral health initiatives.

5 Our Goal 5 The goal of the WVIDA Initiative is to equip low-income citizens of West Virginia with skills and resources to acquire appreciable assets as they travel on the path to becoming economically self-sufficient.

6 6 Program Overview

7 What is an IDA? 7 Individual Development Accounts (IDAs) are special matched savings accounts designed to help families and individuals of modest means establish a pattern of regular saving and ultimately purchase a productive asset something of value that is likely to return substantial long-term benefits to its owner, like security, stability and opportunities for more income.

8 What is an IDA? 8 Participants will learn about budgeting, saving, banking and more when they open an IDA. Participants attend financial education classes and will also receive one-on-one counseling and other training with their IDAs.

9 Savings Match 9 A savings match is a promise to supplement a WVIDA participant s savings deposits at a specific rate 8 to 1. This means that for every dollar a participant saves, he or she will have another $8 added to his or her total account balance. The maximum match a participant can receive is $4,000. The minimum monthly savings amount is $25.

10 Why a match? 10 Your money is matched to encourage and help you to save enough to buy an asset. Your paycheck helps you to buy food and clothing and pay your bills each month; an asset provides financial security for the future. If you begin to earn less money or lose your job, having an asset will make it easier for you to continue to pay your bills and meet household needs.

11 Time Limit 11 A person can participate in the program for a minimum of six months with a maximum of two years.

12 12 Eligibility

13 Eligibility years of age or older. Be able to open a savings account. All applicants must document their income level and meet household income and net worth eligibility requirements to participate in the program. A household consists of anyone living in the same primary dwelling - this includes spouses, children, parents, siblings, etc. who share an eating and living space.

14 Eligibility 14 Household earned income shall not exceed 200% of the federal poverty level. TANF recipients are automatically eligible. Household earned income for TANF recipients shall not exceed 150% of the federal poverty level.

15 Maximum Allowable Income 15 Limits (200% FPL) Household Size Maximum Household Income Allowed Annually Maximum Household Income Allowed Monthly 1 $21,660 $1, $29,140 $2, $36,620 $3, $44,100 $3, Income Calculation: All applicants are deemed eligible based on the last twelve months of gross, earned income for the household. 5 $51,580 $4, $59,060 $4, $66,540 $5, $74,020 $6,168.33

16 Maximum Allowable Income 16 Limits (150% FPL) Household Size Maximum Household Income Allowed Annually Maximum Household Income Allowed Monthly 1 $16,245 $1, $21,855 $1, $27,465 $2, $33,075 $2, Income Calculation: All applicants are deemed eligible based on the last twelve months of gross, earned income for the household. 5 $38,685 $3, $44,295 $3, $49,905 $4, $55,515 $4,626.25

17 Household Income 17 Household earned income includes: All Employment (Wages and Self) Workers Compensation Unemployment Spousal/Dependent Income Investment Income Retirement/Pension Income Rental Income Household earned income does not include: Child Support Social Security Benefits Other Benefits (TANF, Food Stamps, etc.) Section 8 Assistance If an employee pays for disability insurance

18 Net Worth ($10,000 or less) 18 The IDA Net Worth Test takes the household s total assets (what everyone in the household owns) and then subtracts the household s total liabilities (what everyone in the household owes) to see if it has a value of more than $10,000. The following are not included in the IDA Net Worth Test: The applicant s primary residence (asset) and associating liabilities (mortgage balance). One vehicle (asset) and associated liabilities (outstanding loan). The asset portion of the vehicle is calculated from the Kelly Blue Book Trade-In Value.

19 Uses of Funds 19 To purchase a primary residence To capitalize a small business To expand or stabilize an existing small business To pay tuition for a post-secondary educational program To cover expenses directly related to postsecondary tuition

20 20 Savings

21 Savings Requirements 21 IDA savings dollars must be derived from household earned income, which includes employment earnings and self-employment earnings. Applicants cannot open an IDA savings account until they verify there is earned income in the household from a job or a business.

22 Savings Requirements 22 An individual who receives only Social Security income (or any other benefit income) cannot be an IDA saver because benefit income is not considered earned income. However, if someone else in the household has earned income, the Social Security benefit earner can save using that other person s earned income.

23 Request Procedure 23 Have sufficient funds in the account Attend financial fitness workshops Save for IDA program's minimum time requirement Attend asset-specific training Develop an asset-plan Qualify for financing Find or shop for the asset Submit qualified asset withdrawal request form

24 Withdrawal Uses 24 Emergency withdrawals will only be approved when, in the judgment of WVIDA staff, IDA funds are necessary: to prevent or forestall the eviction of a participant or a participant's family from their residence to prevent foreclosure on a participant's primary residence

25 Withdrawal Uses 25 to pay for critical health care services for a participant or a participant's family member to pay for critical living expenses, such as food supplies or heating expenses, following a participant's loss of employment for emergency safety needs resulting from domestic violence

26 26 Training Requirements

27 Training Requirements Monthly Financial Fitness 27 Bank On It Borrowing Basics Check It Out Money Matters Pay Yourself First Keep It Safe To Your Credit Charge It Right Loan To Own Your Own Home

28 Asset Specific Training 28 Homeownership Business Planning

29 29 Why should we form partnerships?

30 Why should we form 30 partnerships? Powerful connections are made when partners bring their own and often different skills and perspectives to a partnership. Powerful connections are made when partners bring their own self-interests and engage in a process that is mutually beneficial. Leveraging occurs when powerful connections are made.

31 Why should we form partnerships? 31 Because organizations can achieve more for communities by working together than working alone Synergy!

32 Usual Partnerships Unusual Partnerships 32 Partnerships that by definition of the problem or issue being addressed have a natural affinity. Fairly straightforward in composition, but not necessarily easy to create. Relationships among organizations that at first glace do not share a common purpose. They require more creativity and thinking but often have even greater results.

33 Usual Partnerships Unusual Partnerships 33 E.g. partnerships among training organizations and the job placement service Unusual partnerships are created when organizations examine their larger interests and the larger interests of others and see the connections and synergy that could be created together.

34 Unusual Partnerships & Tips 34 Both approaches make sense. Not easy to do. Examples of Unusual partners: Small Business Owners Private Sector Jobs Coal Mines Green Jobs Re-Entry Programs Hospitals Employer Town Halls Pilot Programs OJT/ Work Experience

35 Benefits of IDA Partnerships 35 Market and promote program. Enroll participants. Financial fitness curriculum implementation. Take the role as a host sites. Liaison between KISRA and participants.

36 Benefits of IDA Partnerships 36 Assist in development of key partnerships. Assist in developing financial institution partnerships. Work together on the design of policies and procedures. Prepare and submit grant applications. Assist in development of other partnerships.

37 KISRA WVCADV Domestic Violence Programs IDA Primary Partners WVASF BB&T Bank WVDHHR 37

38 Patricia Scott CEDFP, CHDFP Manager, Economic Empowerment Initiative Ph: