Working to break the cycle of poverty and help low-income households mobilize their savings, legislation revising certain aspects of the Individual Development Account (IDA) – a program administered by the Department of Community Affairs (DCA) –was approved by the Assembly Financial Institutions and Insurance Committee on Thursday.
The bill (A344) would expand eligibility for an IDA, double the amount of matching funds available to account holders and would further define reasons for fund withdrawal allowing transfers into IDA accounts for a spouse or other dependents. Account holders achieving an annual deposit of $2,000 would also be eligible to receive an additional $500.
The bill’s sponsor Assemblywoman Carol Murphy (D-Burlington) released the following statement:
“This legislation is extremely important for those at risk and those in need of extra help. It is targeted to help individuals throughout New Jersey, but especially those in urban communities where economic and social opportunity has not risen equally.
“When utilized, this program, that’s been around since 2001, has shown tremendous potential in helping families accumulate assets and mobilize their savings. Data from 2015, assessing all IDA accounts, shows total withdrawals of $15,775,101 for home purchases, $12,989,432 for business capitalization, and $28,587,639 for postsecondary education and training.
“Revising the program by extending eligibility to those at 250 percent of the poverty level up from 200 percent, changing the fund matching formula to two dollars for every one dollar saved, and further defining permitted uses for savings would only serve to amplify its positive impact to everyone’s benefit.”
The bill now goes to the Assembly Speaker for further review.