Prosperity Now Applauds Introduction of CSA Opportunity Act
Bipartisan Bill Would Encourage More Families to Save
Prosperity Now (formerly CFED) today applauded the introduction of the CSA Opportunity Act in the U.S. House of Representatives. This bipartisan bill was reintroduced by U.S. Reps. Matt Cartwright (R-PA-17) and Charlie Dent (R-PA-15), and, if passed, will allow families to save for their children's future without fear of losing the benefits that help them make ends meet.
CSAs, or Children’s Savings Accounts, are long-term savings or investment accounts that help children and their families, especially those from low-income families, build savings for the future. They are primarily used for postsecondary education. 529s are tax-advantaged plans administered by states or educational institutions that are also used help families save for higher education.
The CSA Opportunity Act (HR 5738) would allow low-income families to save for their children’s future without penalty. Savings penalties, sometimes called asset limits, cut families off from public benefit programs once they hit a threshold savings limit. The Act exempts CSAs and 529 plans from savings penalties in several public benefit programs. Currently, money set aside in a CSA can prevent families from accessing Supplemental Security Income (SSI), the Low Income High Energy Assistance Program (LIHEAP), the Temporary Assistance for Needy Families (TANF) program and Supplemental Nutritional Assistance Program (SNAP), discouraging some families from saving for higher education expenses. Funds in 529s can force families off of SSI, LIHEAP and TANF. With this proposal, families can save for their children’s postsecondary education without fear of losing access to food, energy assistance and other crucial supports. For more information, read our latest blog post.
Prosperity Now is deeply invested in efforts to expand CSAs to every child in the United States through its Campaign for Every Kid’s Future. More than 382,000 children now have CSAs through 54 CSA programs operating in 32 states and the District of Columbia. And recent research by the Annie E. Casey Foundation demonstrates that CSAs can shrink the racial wealth divide in the United States.
“Today, many families need to choose between receiving public benefits to help them get by and savings to help them get ahead,” said Andrea Levere, President of Prosperity Now, “Right now, others in Congress are trying to make it even harder for families to escape poverty. Fortunately, Rep. Cartwright and Rep. Dent have reintroduced commonsense bipartisan legislation that will encourage families to save for their children’s futures without being in fear of losing access to nutrition, energy assistance and other benefits.”
Prosperity Now believes that everyone deserves a chance to prosper. Since 1979, we have helped make it possible for millions of people, especially people of color and those of limited incomes, to achieve financial security, stability and, ultimately, prosperity. We offer a unique combination of scalable practical solutions, in-depth research and proven policy solutions, all aimed at building wealth for those who need it most.