Ohio Administrative Code
Title 5101:1 - Division of Public Assistance
Chapter 5101:1-3 - Ohio Works First
Section 5101:1-3-18 - Individual development account program
Universal Citation: OH Admin Code 5101:1-3-18
Current through all regulations passed and filed through September 16, 2024
(A) What is an individual development account program?
(1) An "individual development account" (IDA)
is a trust created or organized in the United States to enable an eligible
individual the opportunity to accumulate funds for purposes defined in
paragraph (D)(1) of this rule.
(2)
Pursuant to sections 329.11 to
329.14 of the Revised Code, a
county agency may establish an IDA program for residents of the county. The
program shall provide for establishment of accounts for participants and
acceptance of contributions from individuals and entities, including the county
agency, to be used as matching funds for deposit in the accounts.
(B) How can a county agency establish an IDA program?
(1) The county
agency shall select a fiduciary organization to administer its IDA program. As
described in section 329.11 of the Revised Code, a
"fiduciary organization" is defined as a nonprofit fundraising organization
exempt from federal taxation pursuant to
26 U.S.C.
501(a) and (c)(3)
(1995).
(2) The responsibilities of a fiduciary
organization include but are not limited to:
(a) Ensuring that the organization is bonded
for the amount of money the individuals have contributed plus the amount of
interest generated by the account;
(b) Marketing the program to individuals and
matching fund contributors;
(c)
Depositing the individual's contributions and matching contributions in a
financial institution in accordance with section
329.13 of the Revised Code
within twenty-four hours of receipt of those contributions;
(d) Ensuring that the allowable matching
contribution does not exceed four times the deposited amount and that the
account does not exceed ten thousand dollars at any time. Interest generated by
an IDA is part of the IDA;
(e)
Creating an investment plan to ensure the IDA accounts will obtain a return
with a minimal risk of loss;
(f)
Creating a plan to prevent unauthorized use of matching contributions and to
enforce any penalties pursuant to paragraph (C) of this rule;
(g) Providing financial counseling for
account holders;
(h) Conducting
verification of eligibility for an IDA;
(i) Complying with federal and state
requirements for IDAs; and
(j)
Evaluating the IDA program as required by the county agency and/or the Ohio
department of job and family services (ODJFS).
(3) Matching funds may be provided by or
through a nonprofit, tax exempt organization, or a state or local government
agency that works cooperatively with a nonprofit, tax-exempt
organization.
(4) When a fiduciary
organization participating in the IDA program wants to terminate its
participation in the program, it shall give thirty days written notice to the
county agency. The county agency shall be responsible for selecting another
fiduciary organization to administer the program. In the event the IDA program
is terminated, the funds in any existing IDA, including matching contributions,
will be disbursed to the individual.
(5) When a fiduciary organization does not
fulfill its responsibilities, the fiduciary organization shall not be allowed
to participate in the IDA program until it can prove to the satisfaction of the
county agency that it can fulfill those responsibilities. When the fiduciary
organization misuses the IDA funds, the organization shall be permanently
excluded from participation and shall be referred to the county prosecutor.
Pursuant to section 329.13 of the Revised Code, a
county agency cannot stand alone as a fiduciary organization. It can however,
work in cooperation with a nonprofit fundraising organization.
(C) Who can participate in an IDA program?
(1) An individual whose household
income does not exceed two hundred per cent of the federal poverty level is
eligible to participate in an IDA program established by the county agency that
the individual resides.
(2) An
individual who does not use IDA funds in the manner mandated in section
329.14 of the Revised Code shall
be:
(a) Terminated from participation in the
IDA program;
(b) Denied
participation in any IDA program for a period of six months for the first
occurrence and for one year for the second or subsequent occurrence. The
penalty period shall begin the month following the month of withdrawal of IDA
funds; and
(c) Referred to the
county prosecutor for misuse of the funds.
(3) Any remaining money in the IDA less
matching contributions from outside entities shall be disbursed to the
individual at the beginning of the penalty period. The remaining contributor
matching funds are to be returned to the contributor.
(D) What purposes can an IDA be used for?
(1) The
money from an IDA account can only be used for the following purposes:
(a) Postsecondary educational expenses paid
directly from the account to an eligible education institution or vendor on
behalf of the IDA participant;
(b)
Qualified acquisition costs for a first-time
homebuyer, as defined in 42 U.S.C. 604 (1998), paid
directly from the account to the person or government entity to which the
expenses are due;
(c) Qualified
business capitalization expenses made in accordance with a qualified business
plan that has been approved by a financial institution or by a nonprofit
microenterprise program having demonstrated business expertise and paid
directly from the account to the person to whom the expenses are due.
(2) A fiduciary organization shall
permit a participant to withdraw money deposited by the participant when it is
needed to deal with a personal emergency of the participant or a member of the
participant's family or household. Withdrawal shall result in the loss of any
matching funds in an amount equal to the amount of the withdrawal.
(3) Regardless of the reason of the
withdrawal, a withdrawal from an IDA shall be made only with the approval of
the fiduciary organization.
(E) What IDA reports shall be submitted?
When the county agency establishes an IDA account(s) the fiduciary organization is to collect and maintain information regarding the IDA program pursuant to the provisions of section 329.12 of the Revised Code. The fiduciary organization is to report account information to the county agency on the JFS 05101, "Individual Development Account Report."
Disclaimer: These regulations may not be the most recent version. Ohio may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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