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What if you want to try to save money?

Produced by Deborah Harris, Massachusetts Law Reform Institute
Created December 2017

DTA is required by a 2014 state law to allow you to save money for specified purposes and not have the savings count towards the $2,500 asset limit. The 2014 law calls these accounts “economic independence accounts.” The specified purposes include saving for first and last months' rent, a security deposit, education or training, or any other expense that DTA determines will help you get off benefits, including paying off your debts. G.L. c. 118, § 16.

Under the 2014 law, you have to put some of your TAFDC benefits into the account, but DTA could make the required contribution only $1. That would allow you to save other money such as your tax return, the earned income credit, gifts from family members, or money that would otherwise be countable under the lump sum rule. See What assets count?, Do gifts count?, Do gifts count as income? and What is lump-sum income?. It would allow you to participate in a savings program for your children’s education without having the money count against your asset limit.

A separate law allows recipients to put money in a college savings in a plan created pursuant to or consistent with section 529 of the federal Internal Revenue Code. St. 2016, c. 133, §123 (July 1, 2016)

DTA has not yet implemented either of these laws. Consult an advocate if you would like to establish a noncountable savings account or DTA is counting savings that you intend to use for one of the allowable savings goals.

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