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WASHINGTON, D.C. -- The use of individual development accounts (IDA) by the nation's working poor should be expanded through enhancements, the National Conference of State Legislatures (NCSL) urged in a letter sent to Congress today.

"Individual development accounts are another successful tool for assisting low-income working families," said California Assemblywoman Dion Aroner, co-chair of NCSL's Task Force on Welfare Reform Reauthorization. "Providing the working poor an incentive to save money is a win-win situation for everyone - the individual, the state and the economy."

An individual development account is an innovative approach to encouraging low-income and working poor individuals to save money for post-secondary education, purchase a home or invest in a small-business. Under current law, a state can use a portion of their federal Temporary Assistance for Needy Families block grant to match, dollar for dollar, contributions made by a working poor individual to an IDA. More than 10,000 low-income working individuals in at least 25 states participate in IDA programs.

A measure (S. 1924) currently under consideration in Congress would expand the concept of IDAs by allowing financial institutions, certain non-profit organizations and Indian tribes to invest in their communities through the establishment of IDA programs. The cost of the new programs would be offset through federal tax credits.

Assemblywoman Aroner believes the IDA program can be a vital economic engine during these difficult economic times.

"Individual development accounts generate a great deal more savings than just the money that is deposited into them. IDAs generate new business opportunities, reduce welfare expenditures, stabilize families and much more."

S. 1924, the "Care Act of 2002," also increases funding for the Social Services Block Grant which states use as a source of funds for community and home-based services to the most vulnerable segments of the population including children, the elderly and the disabled.

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