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Social Security Administration Program Operations Manual System- for AFI IDA Rules

"POMS is intended for SSA employees, and ...contains technical terms and instructions that will likely be unfamiliar to AFI grantees and beneficiaries."

In the process of supporting IDA participants who receive Social Security Disability Benefits, it is likely that AFI grantees will encounter beneficiaries who are interested in seeing the actual Social Security Administration (SSA) program rules pertaining to AFI IDAs. Access to the actual SSA rules in writing validates the information being shared by sources outside of SSA and may help beneficiaries to feel more confident in their decision to pursue an IDA. These rules can also be helpful to beneficiaries in communicating with their SSA Claims Representative and their Work Incentives Planning and Assistance (WIPA) Community Work Incentives Coordinator (CWIC) regarding their IDA participation.

The SSA program rules for the treatment of AFI IDAs are contained in the SSA POMS, or Program Operations Manual System. The POMS is a primary source of information used by Social Security employees to process claims for Social Security benefits. A public version of POMS is available on the SSA web site: https://secure.ssa.gov/apps10/poms.nsf/aboutpoms

The POMS sections pertaining to AFI IDA programs are provided on the following pages. It is important to keep in mind that the POMS is intended for SSA employees, and consequently contains technical terms and instructions that will likely be unfamiliar to AFI grantees and beneficiaries. This POMS excerpt is intended to be a tool that AFI grantees can share with beneficiaries and not a plain language resource document to use in gaining a better understanding of how the AFI IDA provisions are applied.

 

Social Security Administration Program Operations Manual System (POMS) Excerpt: POMS SI 00830.670 Individual Development Accounts (IDAs) - Demonstration Project

CITATIONS: Sections 404-416 of P.L. 105-285 (The Assets for Independence Act); 42 U.S.C. 604 Note; Section 415 of P.L. 106-554 (The Consolidated Appropriations Act, 2001)

BACKGROUND

What is an Individual Development Account (IDA)?

An IDA is a special bank account that helps an individual save for his/her education, the purchase of a first home, or to start a business. He/she uses earnings from his/her work to set up an approved bank account for an IDA.

How Does a Demonstration Project IDA Help an Individual's Money to Grow?

An individual contributes money from his/her earnings to an IDA. His/her contributions are matched with money from special funds called "Demonstration Project" money. The matching money helps the individual reach his/her goal sooner.

Who is Eligible for a Demonstration Project IDA?

If an individual is working and either receiving TANF or has low income and assets, he/she may be eligible for a Demonstration Project IDA.

What is the Statutory Authority for Demonstration Project IDAs?

The Assets for Independence Act (enacted 1/27/98) created a Federal Demonstration Project to test the effectiveness of IDAs in improving the lives of participating low-income persons. This Act provides for Demonstration Project monies to carry out a program to fund IDAs.

Who Determines Whether an Individual Is Eligible for an IDA?

The agency that has been approved to authorize IDAs using Demonstration Project funds decides who is eligible for an IDA.

NOTE: SSA does not determine whether an individual is eligible for an IDA.

What Federal Agency Oversees the IDA Programs?

The Administration for Children and Families (ACF) oversees the TANF and Demonstration Project IDA programs. (TANF IDAs are explained in SI 00830.665.)

What Other Information is Available About Demonstration Project IDAs?

A spotlight on IDAs is in SI 00601.061C.18. See SI 00830.670E.4. for the procedure on responding to inquiries about Demonstration Project IDAs.

DEFINITION OF IDA TERMINOLOGY

The following definitions are for your information only. IDA agencies and organizations will apply these definitions to individual cases and determine IDA eligibility. Note that SSA does not determine whether an individual is eligible for an IDA.

Qualified Entity

A qualified entity is:

  • A not-for-profit organization described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such code; or
  • A State or local government agency or a tribal government acting in cooperation with a not-for-profit organization.

Qualified Purpose

A qualified purpose is one of the following:

  • Postsecondary educational expenses;
  • Business capitalization;
  • First home purchase.

Postsecondary Educational Expenses

Postsecondary educational expenses are:

  • Tuition and fees required for the enrollment or attendance of a student at an eligible educational institution; and
  • Fees, books, supplies and equipment required for courses of instruction at an eligible educational institution.

IMPORTANT: The charge for room and board, if any, is not a "fee" for purposes of this section. However, the charge for room and board can be an approvable expense under a PASS(SI 00870.025B.5.g.).

Eligible Educational Institution

An eligible educational institution is an institution that is described in section 101 or 102 of the Higher Education Act of 1965, or a postsecondary vocational education school (as defined in subparagraph (C) or (D) of section 521(4) of the Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2471(4)).

Qualified Business Capitalization Expenses

Qualified business capitalization expenses are qualified expenditures for the capitalization of a qualified business pursuant to a qualified plan.

Qualified Expenditures

Qualified expenditures are expenditures included in a qualified plan, including capital, plant, equipment, working capital, and inventory expenses.

Qualified Business

A qualified business is any business that does not contravene any law or public policy.

Qualified Plan

A qualified plan is a business plan that:

  • Is approved by a financial institution, a microenterprise development organization, or by a nonprofit loan fund having demonstrated fiduciary integrity, and
  • Includes a description of the services or goods to be sold, or a marketing plan and projected financial statements.
  • May require the eligible individual to obtain the assistance of an experienced entrepreneurial advisor.

Qualified First-Time Homebuyer

A qualified first-time homebuyer is an individual participating in the project involved (and, if married, the individual's spouse) who has had no ownership interest in a principal residence during the 3-year period ending on the date of acquisition of the principal residence.

Date of Acquisition

The date of acquisition is the date on which a binding contract to acquire, construct, or reconstruct the principal residence is entered into.

Principal Residence

A principal residence is a principal residence that costs no more than the limits set by the IDA project.

Tribal Government

A tribal government is a tribal organization, as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b) or a Native Hawaiian organization, as defined in section 9212 of the Native Hawaiian Education Act (20 U.S. C. 7912).

POLICY EFFECTIVE 01-01-01

Contributions

Any earnings an individual contributes to his/her Demonstration Project IDA are deducted from his/her wages in determining countable income. An individual's contributions that are deposited in a Demonstration Project IDA are excluded from resources.

Matching Funds

Any matching funds that are deposited in a Demonstration Project IDA are excluded from income and resources.

Interest

Any interest earned on the individual's own contributions and on the matching funds that are deposited in a Demonstration Project IDA is excluded from income and resources.

Disbursements

Disbursements from a Demonstration Project IDA can only be made for a qualified purpose (e.g., education, business capitalization or first home purchase) or for an allowable emergency (as determined by the IDA agency). Disbursements from a Demonstration Project IDA for a qualified purpose are excluded from income. Emergency withdrawals are loans and therefore are not income (SI 00815.350 ).

NOTE: The Demonstration Project IDA agency determines what constitutes a qualified purpose. Assume that all disbursements follow IDA rules.

POLICY PRIOR TO 01-01-01

Contributions

Any earnings an individual contributes to his/her Demonstration Project IDA are considered as part of his/her wages in determining countable income.

An individual's contributions that are deposited in a Demonstration Project IDA are resources.

Matching Funds

Any matching funds that are deposited in a Demonstration Project IDA are excluded from income and resources.

Interest

Any interest earned on the individual's own contributions is unearned income when received, and becomes a countable resource in the month after the month of receipt.

Any interest earned on the matching funds that are deposited in a Demonstration Project IDA is excluded from income and resources.

Disbursements

Disbursements from a Demonstration Project IDA can only be made for a qualified purpose (e.g., education, business capitalization or first home purchase) or for an allowable emergency (as determined by the IDA agency). Disbursements from a Demonstration Project IDA for a qualified purpose are excluded from income. Emergency withdrawals are loans and therefore are not income (POMS SI 00815.350 ).

NOTE: The Demonstration Project IDA agency determines what constitutes a qualified purpose. Assume that all disbursements follow IDA rules.

PROCEDURE EFFECTIVE 01-01-01

How to Verify Demonstration Project IDAs

In both initial claims and redeterminations, use documents in the individual's possession to verify that the account is a Demonstration Project IDA. If such documents are not available, contact the Demonstration Project agency to verify that the account is a Demonstration Project IDA.

MSSICS Input

On the IWAG screen, input the gross monthly earned income in the "Alleged Amount" or "Verified Amount" field, as appropriate. Input any amounts deposited into a Demonstration Project IDA in that month in the "Amount Not Counted" field. Enter "Demonstration Project IDA" and the applicable months in the "Reason Not Counted" field.

Use the IINT screen to input all interest received on the account each month. Input the total interest in the "Gross Amount" field and the "Amount Not Counted" field. Enter "Demonstration Project IDA" and the applicable months in the "Reason Not Counted" field.

On the RMEN screen, answer "yes" in the "Financial Institution Accounts" field.

On the RFIA screen, identify the type of account and then complete the screen as normally. In the "Alleged Value" or "Verified Value" field, input the balance in the account. In the "Excluded Amount" field, also input the balance in the account. In the "Exclusion Reason" field, list "TANF IDA" or "AFI IDA".

Non-MSSICS Input

Enter in the EN field on the SSA-1719-B, the SSI PE update screens, or the SSA-450-SI, the individual's gross wages minus any contributions to a Demonstration Project IDA in that month.

Do not input any matching funds or interest earned on the Demonstration Project IDA.

Enter "Demonstration Project IDA" and the applicable months in the SSR Remarks field.

Responding to Inquiries About Demonstration Project IDAs

If an individual asks about the availability of Demonstration Project IDAs in his/her area, or about the IDA program's rules, check the listing of grantees at ACF's website at

https://www.acf.hhs.gov/programs/ocs/locate-an-afi-project-near-you.

PROCEDURE - PRIOR TO 01-01-01

How to Verify Demonstration Project IDAs

In both initial claims and redeterminations, use documents in the individual's possession to verify that the account is a Demonstration Project IDA. If such documents are not available, contact the paying agency or the organization in charge of the Demonstration Project IDA.

MSSICS Input

Input the gross wages (including any amounts the individual contributes to his/her IDA) on the IWAG screen.

Use the IINT screen to input all interest received on the account each month in the "Gross Amount" field. In the "Amount Not Counted" field, enter the amount of interest earned on the matching funds. Enter "Demonstration Project IDA" and the applicable months in the "Reason Not Counted" field.

Non-MSSICS Input

Enter in the EN field on the SSA-1719-B, the SSI PE update screens, or SSA-450-SI the individual's gross wages (including any contributions to a Demonstration Project IDA).

Enter in the UM field on the SSA-1719-B, the SSA-450-SI, or the SSI PE update screens, only the interest received on the individual's contributions.

Enter "Demonstration Project IDA" and the applicable months in the SSR Remarks field. If an individual receives interest from an IDA and another source in the same month, in the Remarks field, list separately the month, amount, and source for each type of interest received.


REFERENCES

Exclusion from resources of TANF-funded IDAs, SI 01130.678

Exclusion from resources of Demonstration Project IDAs, SI 01130.679

Exclusion from income of TANF-funded IDAs, SI 00830.665

Temporary Assistance for Needy Families (TANF), SI 00830.403

Excluded funds commingled with other funds, SI 01130.700

RMEN, MSOM 121-A

RFIA, MSOM 121-F

SI 00830.670 - Individual Development Accounts (IDAs) - Demonstration Project - 06/18/2001

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