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PAMTL 409 (Individual Development Account (IDA) Program)
Public Assistance Manual Transmittal Letter No. 409
October 29, 1999

The rule contained in this MTL is effective December 1, 1999. This cover letter includes a summary statement of the policy and the clearance control number (CCN) assigned when the policy was placed into clearance.

Rule 5101: 1-3-18 - "Individual Development Account (IDA) Program"

Revised Code Section 5101.97 states that the Ohio Department of Human Services (ODHS) shall adopt rules in accordance with Chapter 119 of the Revised Code to govern the implementation, by county departments of human services (CDHS), of an Individual Development Account Program as established in Revised Code Sections 329.11 to 329.14. An "Individual Development Account" means a trust created to enable an individual to accumulate funds for specified purposes. Under an IDA, an individual may deposit earned income with a fiduciary organization, i.e., a nonprofit fund-raising organization that is exempt from federal income taxation. The fiduciary organization will secure matching funds for the money held on deposit at a match rate not to exceed a rate of two to one. The matching funds may be secured from corporations, individuals, other entities or the CDHS. An account may have no more than ten thousand dollars in it at any time.

An individual whose household income does not exceed one hundred fifty percent of the federal poverty line is eligible to participate in an IDA program established by the county department of human services of the county in which the individual resides. An individual seeking to be a participant in an IDA program shall enter into an agreement with the fiduciary organization administering the program. The agreement shall specify: (1) the terms and conditions of uses of funds deposited; (2) financial documentation required to be maintained by the participant; (3) expectations and responsibilities of the participant; and, (4) services to be provided by the fiduciary organization.

The IDA funds may be withdrawn only for specified purposes as established by law. These purposes are: (1) post-secondary education, (2) first-time home purchase, or (3) the establishment of a business. Allowances are made for emergency withdrawal of funds the individual has contributed. However, penalties are imposed for inappropriate use of withdrawn funds. A withdrawal may be made only with the approval of the fiduciary organization.

The CDHS will need to modify the county PRC plan appropriately to include IDA accounts if PRC funds are used for the match. For the purposes of PRC assistance, the match money is considered as non-assistance even if provided on an on-going basis.

According to Section 263.20 of the federal TANF regulations, the funds in an IDA account are disregarded in determining eligibility for, or the amount of, assistance in any federal means-tested program. Therefore, funds in an IDA account are disregarded as a resource for Food Stamps and Medicaid during any period an individual maintains or makes contributions to the account. However, any money paid out of the account directly to the individual is not excluded as income for OWF or food stamps. Any money paid out of the account directly to a third party is excluded as income for OWF and food stamps.

Based on data that the fiduciary organization is required to collect as outlined in the rule, a semi-annual report on Individual Development Account programs is required to be submitted by the CDHS to ODHS. In a letter to be released in the near future, instructions regarding the report will be provided, i.e., due date of the report and how to file the report. The individual CDHS reports will be summarized into a full annual report which will be filed with the governor, president and minority leader of the senate, and speaker and minority leader of the house of representatives. (CCN 4462)


Ohio Works First: Chapter 3000: Please remove Outline of Contents (effective October 1, 1999) and replace with Outline of Contents (effective November 1, 1999).

Ohio Works First: Chapter 3000: Please insert rule 5101-1-3-18, "Individual Development Account (IDA) Program" immediately after rule 5101:1-3-16, "Ohio Works First (OWF) Work Activities."