Adi Talwar

The homeless shelter system's PATH intake center in the Bronx.

The city is proposing a savings program where employed homeless persons who reside in a shelter will be mandated to hand over nearly a third of their earned monthly income. The de Blasio administration says the savings will aid those residents in their eventual transition out of the shelter system.

As part of the proposed Income Savings Plan program, New Yorkers experiencing homelessness and residing in a shelter will be required to deposit a portion of their earned income, generally 30 percent, to a savings account.

The first phase of the program will begin with employed single adult individuals residing in the city’s Department of Homeless Services (DHS) shelters with earned income high enough to make them ineligible for cash assistance.

As the program continues, DHS plans on applying the program to additional populations with earned income such as families with children, a move tentatively scheduled for next year. The savings would be maintained by the Department of Shelter Services (DSS) and would become available once program participants exit the shelter. The savings amount is based on earned income adjusted by how much time the participant spends in the shelter.

“Our goal is to assist New Yorkers with saving in order to more effectively help them plan for the future and get back on their feet, ensuring they can utilize savings from earned employment income to move out of shelter into housing and setting them up for sustainable, long-term stability,” said DSS spokesperson Isaac McGinn in an email statement.

As of August 27th, there are 37,674 adults and 21,279 children, totalling 58,953 persons within the city’s shelter system.

In the 1990s, New York State law required shelter residents (outside of the five boroughs) to pay a portion of their earned income, including income from public benefits, in order to stay in the shelter. In 2010, the law was amended and instead asked residents to voluntarily save a portion of earned income in a savings account. But the de Blasio administration said the voluntary program was ineffective and in 2018 the state gave the approval to have the plan to be mandatory rather than voluntary.

Homelessness advocates feel the Income Savings Program is a worthy effort but doesn’t address the root causes of homelessness.

“The overall takeaway is that people are not homeless because they’re not able to manage their money. They are homeless because they can’t afford rent in New York City,” Coalition for the Homeless policy director Giselle Routhier.

“It is generally another bureaucratic barrier,” she says of the savings program. “It’s certainly preferable to a situation when a person is required to pay rent.”

“I think there are some concerns that we’ll have to monitor once the program goes into effect, the way that they’re describing it, to make sure people are not being harmed by the policy and that they’re able to access their money if they do have an emergency circumstance or when they’re moving out of shelter,” she adds.

Other advocates said saving money was not a priority for homeless New Yorkers when they are fighting on a daily basis for the basics such as food and shelter.

“I think it’s certainly a good idea to help people save money,” said Marc Greenberg, the executive director at Interfaith Assembly on Homelessness and Housing. But homeless people might have less flexibility to save than most New Yorkers. “They’re probably spending a good amount of their money on just surviving. If you are living in a shelter, you’re not able to cook at home. You need to buy from someplace else. If you’re working but you’re not living then you have to spend money on transportation. So I think the concept is a good one, but it needs to be personalized for each individual.”

Greenberg said it would be better to make the program optional, perhaps with an option to have the money invested so it could grow and he added that the program should be coupled with financial literacy workshops.

“The point is you want to help individuals to develop some savings, but you can’t just mandate that a certain amount of their money has to go into savings and you have to help them figure out what their costs of living are and see what fits in their budget. I think that’s the key. It’s not a one size fits all. I think the concept is good and theory, but the real point is to help people develop some savings, but also to help them figure out how to do it without being a hardship to them,” said Greenberg. ” We have to treat them like dignified human beings because they are human beings.”

The city said the program would include information for participants to help navigate their budget. Participants will receive a monthly savings statement detailing the total of their funds and what they owe the following month. Their funds will be held by DSS and made available once they transition out of the shelter system.

But participants who do not deposit the required funds into the savings account are at risk of noncompliance and could lose their shelter services.

“If a participant does not set aside the required savings, DHS will engage with the individual through collaborative case conferencing to discuss program requirements, encourage compliance, and provide assistance or clarification or guidance on the program and/or connect participant to financial counseling as needed. Failure to resolve following engagement by shelter staff can result in referral to rooms for which they can pay rent. Shelter residents will have full due process protections and several touchpoints/ample opportunities to resolve,” in an email to City Limits.

The Income Savings Plan program is expected to be fully implemented 30 days after the public hearing which has been scheduled for Sept 24, 2019 at 2:00 p.m. in the Second Floor Auditorium at 125 Worth Street in Manhattan. You can submit comments to DHS through the NYC rules website at