President Tsai Ing-wen in June signed into law the Act on Savings Accounts for the Education and Development of Children and Teenagers. The legislation encourages disadvantaged families to save for their children’s future by creating publicly subsidized saving accounts.
The scholar Li-Chen Cheng, who earned her PhD in Social Work at Washington University, has spent decades testing Child Development Accounts and antipoverty measures in Taiwan and advising government officials. She is now discussing with national policy officials how to increase enrollment for the accounts under the new act.
Cheng is a professor at National Taiwan University, one of the McDonnell International Scholars Academy partner universities. She received a Brown School Distinguished Alumni Award in 2015 and was one of the speakers at the 2017 International Symposium on Inclusion in Asset Building: Policy Innovation and Social Impacts in Singapore organized by the Next Age Institute.
“The most exciting thing for a policy scholar is to see something you work on for such a long time finally realized or practiced,” Cheng said. “It does not mean your work is done. In metaphor, it means a baby is just born, and raising it up just begins.”
The idea of matched savings has been included into Taiwan’s Social Assistance Act since 1994, Cheng said. It requires each local government to launch some sort of antipoverty program to help the poor families accumulate savings. But the programs had been sporadic and small, she said. Then, in 2000, the Taipei City Government set up saving accounts for poor families. The idea of matched savings has been included into the Social Assistance Act since 1994. Luckily, President Tsai included the policy idea in her most recent election platform, Cheng said.
Here is how the accounts work: For each annual deposit that parents put in their child’s account, the government adds a matching sum. The government will cap its annual matching sum per account at the equivalent of US$500. Under the plan, a child could save enough to cover four years of college tuition in Taiwan.
The trial version of the program implemented last year led to savings of more than $2 million for 3,000 participating families, President Tsai said at the signing ceremony.
“Above all, the program encourages families to confront temporary economic hardships with a positive attitude that would help carry the family through and keep the children on the right path,” Tsai said, according to the Taipei Times.
“Signing the act into law is a new beginning and we will surely forge a path forward,” she said.