Individual
Development Account
Question and Answer Sheet
A
Guide for IDA Consumers with Disabilities
Q1.
What
is an Individual Development Account (IDA)?
A1.
Individual Development Accounts, also known as “IDAs”, are a savings
account. What makes it special is you receive an additional deposit each time
you add to your savings. It is called a match and is usually one to four times
the size of each deposit you make. For example, if you receive a 2:1 match, each
time you deposit $25, you will get an additional $50 toward your savings
goal.
Q2.
What can I use an IDA account for?
A2. Each IDA program may
differ slightly and may have their own guidelines for how the savings can be
used. However, in most cases, IDAs are used specifically for three purposes:
1) starting a business,
2) buying a home,
3) or, for going back to school.
Q3.
What is financial literacy training?
A3.
Each participant in an IDA
program must take free financial literacy training. Each IDA program has
its own way of providing this type of training. At a minimum you will learn how
to reduce your debt, develop a savings plan and prepare for your savings goal.
You may also learn about your credit history, banking, investing and money
management. The training can take many forms. You may receive one-on-one
counseling, classroom training or peer support.
Q4.
Can I participate in an IDA?
A4.
Each IDA program may have
slightly different requirements to participate. Generally speaking, you must be
within the income guideline of “200% of poverty”. This means, for example,
that an individual could not earn more than $17,720 and the head of a family of
four could not earn more than $36,200. In addition to income guidelines, you
must also have a job. IDA programs often refer to it as an “earned income”
requirement. Even if you do not meet these guidelines, you should still pursue
participating in an IDA program, because the IDA program nearest you may have
more liberal guidelines.
Q5.
How does an IDA program work?
A5.
As mentioned before, each IDA
program is unique. However there
are some common approaches that are used. You first attend an orientation
meeting. Your eligibility to participate would probably be determined at this
first meeting. You will fill out a number of forms that ask about your financial
history and your personal history. This information is collected so that the
organization can keep records on the demographics of their participants. Once
accepted into the program you open a savings account at a bank that is tied to
the IDA organization. You will likely sign a contract that lays out how much
money you plan to deposit each month. At some point, either before or after
opening the savings account, you will take financial literacy training. You will
also likely have regular meetings with the other participants in the IDA program
who will offer peer support. Once you reach your savings goal, your IDA
caseworker will confirm the purchase (or investment) and your savings will be
released.
Q6.
How much money can I save?
A6.
Many IDA programs last about
two to three years. How much you
save in the end depends on how much you deposit and how much of a match is
offered. For example, if you deposit $25 every month for two years you save $600
on your own. If the IDA organization offers a 3:1 match, you will receive an
additional $1,800 toward your savings goal. In two years you save $2,400.
Q7.
Where is the program nearest to where I live?
A7.
Unfortunately,
there is no national directory of IDA programs. However, you can still find a
list of programs in your state. To find out if there is a program near you, go
to
www.idanetwork.org, click on
"State Pages" on the main (left) navigation bar, select your state
from the drop down menu, and then select "IDA Programs”. Contact
information for all IDA programs in your state will be listed. You may also want
to look in your local Yellow Pages, where there may also be listings.
Q8.
Will
the
program provide special services for my disability?
A8.
IDA
programs want participants to succeed. IDA program staff want to make you feel
welcome and want to give you every chance to meet your savings goal.
You may be asked if you have a disability or if you need any special
services called “accommodations”. Any questions regarding disability are
completely confidential and in no way effect your eligibility to participate or
stay in the program. To make sure that you receive the accommodations you need,
you should bring up any concerns you have with your IDA caseworker. Some
commonly requested accommodations include, large print or audiotaped financial
literacy materials, special seating arrangements in the classroom, an accessible
bathroom, class notes and meeting reminders. You can learn more about different
types of accommodations by going to the Job Accommodation Network (JAN) at
http://www.jan.wvu.edu/media/ideas.html
Q9.
Will I lose my Supplemental Security Income (SSI) if I participate?
A9.
Not all IDA programs allow people who
receive SSI to participate. Typically, if you receive SSI you're not allowed to
have more than $2,000 in assets as an individual or $3,000 as a married couple.
Assets include any readily available cash, like that in a savings account.
However, there are some IDA programs that do allow you to have an IDA account,
and therefore assets, without losing your benefits. It is very important to get
into one of these specifically designated IDA programs. Only federally funded IDA programs under the “Assets for
Independence Act” or under “Temporary Assistance for Needy Families” allow
people who receive SSI to participate in IDA programs without losing benefits.
Before entering an IDA program, it is VERY
important to ask if it is funded by one of these federal programs. Documentation
that you can participate in these particular IDA programs can be found at the
Social Security Administration web site in their “POMS” manual (“Exclusions
Under Other Federal Statutes”)
You
should ask your IDA caseworker to write a letter on their program letterhead
stating that you can participate in the IDA program without losing your SSI
benefits. The letter should specifically mention the “Exclusions Under Other
Federal Statutes” clause that is mentioned above. You should take that letter
to your SSA caseworker for documentation and keep a copy of it for yourself.
Once you are in the program, especially if you are starting a business,
you will need to monitor your earnings. As you increase your earnings, your
benefit will decrease. However, you can earn a net income in the range of
$14,100 - $39,228 (depending on what state you live in), without losing your
benefits or Medicaid.
It is a very
complicated system to navigate.
We
strongly recommend that you meet regularly with an SSI benefit counselor both
during and following your IDA program and as long as you receive SSI.
Q10.
Can I use apply an IDA to a Plan for Achieving Self-Sufficiency (PASS)?
A
PASS is a special program for people who receive SSI that allows them to accrue
savings to start a business without reducing their SSI benefit.
An IDA can be a part of a PASS program.
You
can find more information about PASS plans at the Social Security Administration
web site:
http://www.ssa.gov/pubs/11017.html
Q11.
Will I lose my Social Security Disability Insurance (SSDI) if I participate?
There are no restrictions for SSDI
recipients who want to participate in IDA program. Therefore, if you only
receive SSDI, you can participate in any IDA program nationwide. However,
especially if your savings goal is to start a business, you will need to pay
special attention to your income level so that you do not jeopardize your
benefits. Once you earn over a certain amount, you will no longer receive your
SSDI benefits. The guidelines for how much you can earn is called the
“earnings threshold” and it is fixed nationally (not by state). In 2002, the
earnings threshold for self-employment for an individual is $780 per month and
$1,300 for blind individuals.
Q12.
Will the IDA program provide SSI or SSDI benefits counseling?
A12.
Most IDA providers will not know about
disability related public benefits. You should strike up a good relationship
with your local Independent Living Center (ILC). ILCs, located across the nation
and in every community, offer a broad spectrum of free disability services that
include disability benefit counseling. You should meet regularly with an ILC
benefit counselor as you go through your IDA program.
You can find the ILC nearest you by either looking in your local Yellow
Pages, or by going to the National Directory of Independent Living Center's web
site:
http://www.virtualcil.net/cils/.
Q13.
Can I speak with an IDA participant who has a disability?
A13.
The World Institute a Disability is
developing a database of people with disabilities who have either gone through
an IDA program or who are currently enrolled.
If you would like to be a part of this database so that you can speak
with other IDA participants with disabilities and to share your own story please
forward your name and contact information to
dede@wid.org.
Q14.
Where can I learn more about IDA programs and issues relating to persons
with disabilities?
IDAS AND DISABILITY
World
Institute on Disability
http://www.wid.org/pages/eped/IDA.htm
GENERAL INFORMATION ABOUT IDAS
Corporation
for Enterprise Development
www.cfed.org
Welfare Information Network
http://www.welfareinfo.org/individu.asp#General
Center for Social Development
http://www.welfareinfo.org/individu.asp#General
SELF-EMPLOYMENT AND PERSONS WITH DISABILITIES
Griffin-Hammis
Associates, LLC
http://www.griffinhammis.com
People with Disabilities and Self-Employment
Listserve
http://groups.yahoo.com/group/pwd_self-employment
Self-Employment Strategies for People with
Disabilities
http://www.trninc.com/nomoreinterviews.htm
Small-Business and Self-Employment Service for People with Disabilities
through the Department of Labor's Office of Disability Policy
http://www.jan.wvu.edu/sbses/index.htm
Small-Business Administration
http://www.sba.gov
Social Security Administration Office of Employment
Support
http://www.ssa.gov/work/serviceproviders/contractsbpao
Disabled Businesspersons Association
http://www.disabledbusiness.com
The Abilities Fund
http://www.abilitiesfund.org
PASS Writing Tool at Cornell University
http://www.passonline.org
HOUSING AND
DISABILITY
Center for Housing and New Community Economics
http://alliance.unh.edu/
Fannie Mae
http://fanniemae.com/
U.S. Department Housing and Urban Development
http://www.hud.gov/groups/disabilities.cfm
Opening Doors: A Housing Initiative for the
Disability Community
http://www.c-c-d.org/intro_page.htm
EDUCATION AND DISABILITY
LD Online: Post-Secondary Education
http://www.ldonline.org/ld_indepth/postsecondary/
Post Secondary Education Network
http://www.pepnet.org/
Workforce Recruitment Program
http://www.wrpjobs.org/
* * *
The preceding
information is furnished by the World Institute on Disability.
For
more information contact:
Dede
Leydorf
World Institute on Disability
510 16th Street, Suite 100
Oakland, CA 94612
Voice:
510-251-4340
TTY: 510-208-9493
FAX: 510-763-4109
E-mail:
dede@wid.org
