U.S. Rep. Glenn “GT” Thompson (R-PA) introduced the bipartisan Skill Savings Account Act with U.S. Rep Suzanne Bonamici (D-OR).
The legislation would allow workers of all ages to create a skill savings account to use for educational expenses including workforce development and nontraditional learning opportunities. The skill savings accounts could be used for a wide variety of instruction including apprenticeships, online courses, credentials, short or long-term community college and university courses, bootcamps, certificates, skill accelerators and more. The goal, the Congress members said, was to give workers more opportunities to reskill and upskill throughout their careers.
“A skilled workforce drives our economic growth and it’s important that every American knows there is more than one path to a successful future,” Thompson said. “I am proud to lead the Skill Savings Account Act. This commonsense, bipartisan legislation will create a tool for workers to reskill and upskill, ensuring that everyone can climb the ladder of opportunity.”
The skill savings accounts would also allow for tax-free contributions from employers, workers, community investment organizations, family and friends, government agencies and tax authorities to contribute to an individual’s skill savings account, that would follow the individual worker throughout their working life.
The legislation has wide support from business and education organizations.
“This bill offers workers and employers a practical, flexible tool to invest in skills development and training, helping address worker shortages and keep America’s workforce competitive,” Rodney Davis, Head of Government Affairs of the U.S. Chamber of Commerce said.
Officials said the legislation would allow workers to contribute to their own skill savings accounts and/or receive contributions from others. The total amount contributed by an individual’s employer cannot exceed $5,250 and the total amount contributed by and employee would be limited to $10,000 per year, with the total account balance of the skill saving account not to exceed $50,000.
“The Skill Savings Account Act creates a portable, tax-advantaged tool that empowers learners and workers to invest in their own upskilling and reskilling, reflecting how today’s careers and related pathways actually unfold,” Kate Kreamer, Executive Director of Advance CTE, said. “Career Technical Education (CTE) has long delivered the high-quality programs and pathways that learners need to cultivate in-demand skills, and Skill Savings Accounts can help complement this existing infrastructure with a worker-centered, demand-side investment.”