Glossary of Terms: Family OpPORTUNITY PROJECT POLICY

This document contains definitions of terms used in family opportunity policy.

Key Terms Definitions

Assets:  Includes savings, retirement accounts, home and business property and other financial holdings.

Asset Building Strategies: A wide range of policies to increase financial stability, including, but not limited to, the earned income tax credit (EITC), educational savings accounts (ESAs), financial education, individual development accounts (IDAs), microenterprise and predatory lending protection.

Learn more by reading NCSLs LegisBrief, Helping Working Families Build Financial Security.

Asset Deficiency: Generally defined as a measure of whether a household can support itself for 12 weeks at a poverty-level income using savings or other available assets.

Child Care Subsidy: Child care subsidies are provided by states to low-income families and families that receive public assistance to help them obtain child care so they can work or attend training or other classes. The federal government provides funding to states through the Child Care and Development Fund (CCDF). States also may use federal TANF block grant funds and general revenues.

Child Savings Accounts (CSAs):  A savings account established with public or private funds for children.

Earned Income Tax Credit (EITC): The federal EITC for low-to-moderate-income working people reduces the amount of taxes owed, and refunds the difference if the credit is larger than the amount owed. The credit changes every year and is based on earnings, number of qualifying children and marital status. As of January 2014, 25 states and the District of Columbia have and EITC as well as two local jurisdictions.

Learn more by reading NCSL's report, Tax Credits for Working Families: Earned Income Tax Credit (EITC).

Economic Gardening: An economic development strategy that supports the growth of local businesses to boost economic activity and create jobs within a community.

Learn more by reading NCSLs LegisBrief on Economic Gardening.

Educational Savings Accounts (ESAs): A trust or custodial account created or organized to pay the qualified education expenses of the designated account beneficiary.

Federal Poverty Guidelines: The poverty guidelines are the income levels used for administrative purposes such as determining program eligibility. Issued annually by the U.S. Department of Health and Human Services, they are adjusted for various family sizes. There is one set of figures for the 48 contiguous states and separate measures for Hawaii and Alaska. For example, for a four-person family with two children, the 2013 poverty guideline was $23,550. The amount was $29,440 in Alaska and $27,090 in Hawaii.

Learn more about the 2014 Federal Povery Guidlines

Financial Education / Literacy: This term refers to a person’s ability to make informed judgments and effective decisions about money management.

Learn more by reading NCSLs overview, Financial Literacy 2013 Legislation.

Individual Development Accounts (IDAs):  IDA's are matched savings accounts targeted for a specific use— typically home purchase, postsecondary education or small business capitalization. Public or private dollars, or both, are used to match the amount saved by eligible individuals.

Learn more by reading NCSLs LegisBrief, Individual Development Accounts: An Asset Building Tool.

Income: The resources a person or household receives from earnings, unemployment compensation, workers’ compensation, social security, supplemental security income, public assistance, veterans’ payments, survivor benefits, disability benefits, pension or retirement income, interest, dividends, rents, royalties, estates and trusts, educational assistance, alimony, child support, financial assistance from outside the household, and other income.

Living Wage: Living wage laws require businesses that have government contracts or receive government financial assistance to pay wages that enable a worker to provide for a family’s basic needs.

Low-income Working Family: There is no single income threshold for determining whether a family is “low-income.” A commonly accepted definition is a working family with income less than 200 percent of the federal poverty guidelines. 

Microenterprise:   Businesses that employ fewer than five people and require no more than $35,000 in start-up capital.

Learn more by reading NCSLs LegisBrief on Microenterprise Development.

Minimum Wage: The federal minimum wage currently is $7.25 an hour (effective July 24, 2009). Several state laws require employers to pay more than the federal minimum wage.

Learn more by reading NCSL's State Minimum Wage Chart.

Payday Loan: Small-dollar, short-term, unsecured loans based on personal checks held for future deposit or on electronic access to personal checking accounts.

Learn more by reading NCSL's overview of Payday Lending Statutes.

Predatory Mortgage Lending: This refers to abusive lending practices, including providing mortgage loans with unreasonable interest rates or prepayments or with unreasonable or unwarranted charges. Predatory practices also include repeated refinancing of a loan, charging higher interest and fees each time.

Learn more by reading NCSL's overview of Mortgage Lending Practices State Statutes.

Split Refund: A split refund allows federal tax refund recipients to divide their refund, in any proportion, and deposit the funds directly in up to three different accounts with U.S. financial institutions or to purchase a Series I U.S Savings Bond.

Learn more by reading NCSL's report, Encouraging Savings at Tax Time.