Policies & Procedures

Introduction

ABOUT THE MODEL ACOP

HOW TO USE THE MODEL ACOP....................................................................................... Intro-i

ABOUT THE MODEL ACOP AND THE PUBLIC HOUSING LEASE.................................. Intro-i

REFERENCES CITED IN THE MODEL ACOP.................................................................... Intro-ii

RESOURCES CITED IN THE MODEL ACOP..................................................................... Intro-iii

Chapter 1

OVERVIEW OF THE PROGRAM AND PLAN

INTRODUCTION........................................................................................................................ 1-1

PART I: THE PHA

I.A...... OVERVIEW..................................................................................................................... 1-1

I.B...... ORGANIZATION AND STRUCTURE OF THE PHA.................................................... 1-1

I.C...... PHA MISSION................................................................................................................ 1-2

I.D...... THE PHA’S COMMITMENT TO ETHICS AND SERVICE........................................... 1-2

PART II: THE PUBLIC HOUSING PROGRAM

II.A..... OVERVIEW AND HISTORY OF THE PROGRAM....................................................... 1-3

II.B..... PUBLIC HOUSING PROGRAM BASICS...................................................................... 1-3

II.C..... PUBLIC HOUSING PARTNERSHIPS............................................................................ 1-4

II.D..... APPLICABLE REGULATIONS...................................................................................... 1-7

PART III: THE ADMISSIONS AND CONTINUED OCCUPANCY POLICIES

III.A.... OVERVIEW AND PURPOSE OF THE POLICY............................................................ 1-8

III.B.... CONTENTS OF THE POLICY....................................................................................... 1-8

III.C.... UPDATING AND REVISING THE POLICY.................................................................. 1-9

Chapter 2

FAIR HOUSING AND EQUAL OPPORTUNITY

INTRODUCTION........................................................................................................................ 2-1

PART I: NONDISCRIMINATION

I.A...... OVERVIEW..................................................................................................................... 2-1

I.B...... NONDISCRIMINATION................................................................................................ 2-2

PART II: POLICIES RELATED TO PERSONS WITH DISABILITIES

II.A..... OVERVIEW..................................................................................................................... 2-3

II.B..... DEFINITION OF REASONABLE ACCOMMODATION............................................. 2-4

II.C..... REQUEST FOR AN ACCOMMODATION.................................................................... 2-5

II.D..... VERIFICATION OF DISABILITY.................................................................................. 2-6

II.E..... APPROVAL/DENIAL OF A REQUESTED ACCOMMODATION............................... 2-7

II.F..... PROGRAM ACCESSIBILITY FOR PERSONS WITH HEARING OR
VISION IMPAIRMENTS................................................................................................ 2-8

II.G..... PHYSICAL ACCESSIBILITY......................................................................................... 2-8

II.H..... DENIAL OR TERMINATION OF ASSISTANCE.......................................................... 2-9

Chapter 3

ELIGIBILITY

INTRODUCTION........................................................................................................................ 3-1

PART I: DEFINITIONS OF FAMILY AND HOUSEHOLD MEMBERS

I.A...... OVERVIEW..................................................................................................................... 3-1

I.B...... FAMILY AND HOUSEHOLD......................................................................................... 3-2

I.C...... FAMILY BREAK-UP AND REMAINING MEMBER OF TENANT FAMILY.............. 3-2

I.D...... HEAD OF HOUSEHOLD................................................................................................ 3-3

I.E....... SPOUSE, COHEAD, AND OTHER ADULT................................................................... 3-3

I.F....... DEPENDENT................................................................................................................... 3-4

I.G...... FULL-TIME STUDENT................................................................................................... 3-4

I.H...... ELDERLY AND NEAR-ELDERLY PERSONS, AND ELDERLY FAMILY.................. 3-4

I.I........ PERSONS WITH DISABILITIES AND DISABLED FAMILY....................................... 3-5

I.J....... GUESTS........................................................................................................................... 3-5

I.K...... FOSTER CHILDREN AND FOSTER ADULTS.............................................................. 3-6

I.L....... ABSENT FAMILY MEMBERS....................................................................................... 3-6

I.M..... LIVE-IN AIDE................................................................................................................. 3-7

PART II: BASIC ELIGIBILITY CRITERIA

II.A..... INCOME ELIGIBILITY AND TARGETING................................................................... 3-8

II.B..... CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS.............................................. 3-9

II.C..... SOCIAL SECURITY NUMBERS.................................................................................. 3-11

II.D..... FAMILY CONSENT TO RELEASE OF INFORMATION........................................... 3-12

PART III: DENIAL OF ADMISSION

III.A.... OVERVIEW................................................................................................................... 3-12

III.B.... REQUIRED DENIAL OF ADMISSION........................................................................ 3-12

III.C.... OTHER PERMITTED REASONS FOR DENIAL OF ADMISSION............................ 3-14

III.D.... SCREENING.................................................................................................................. 3-16

III.E.... CRITERIA FOR DECIDING TO DENY ADMISSION................................................. 3-19

III.F.... NOTICE OF ELIGIBILITY OR DENIAL...................................................................... 3-20

Chapter 4

APPLICATIONS, WAITING LIST AND TENANT SELECTION

INTRODUCTION........................................................................................................................ 4-1

PART I: THE APPLICATION PROCESS

I.A...... OVERVIEW..................................................................................................................... 4-2

I.B...... APPLYING FOR ASSISTANCE..................................................................................... 4-2

I.C...... ACCESSIBILITY OF THE APPLICATION PROCESS.................................................. 4-2

I.D...... PLACEMENT ON THE WAITING LIST........................................................................ 4-2

PART II: MANAGING THE WAITING LIST

II.A..... OVERVIEW..................................................................................................................... 4-3

II.B..... ORGANIZATION OF THE WAITING LIST.................................................................. 4-3

II.C..... OPENING AND CLOSING THE WAITING LIST......................................................... 4-5

II.D..... FAMILY OUTREACH..................................................................................................... 4-6

II.E..... REPORTING CHANGES IN FAMILY CIRCUMSTANCES......................................... 4-6

II.F..... UPDATING THE WAITING LIST................................................................................... 4-7

PART III: TENANT SELECTION

III.A.... OVERVIEW..................................................................................................................... 4-8

III.B.... SELECTION METHOD................................................................................................... 4-8

III.C.... NOTIFICATION OF SELECTION............................................................................... 4-11

III.D.... THE APPLICATION INTERVIEW............................................................................... 4-12

III.E.... FINAL ELIGIBILITY DETERMINATION.................................................................... 4-13

Chapter 5

OCCUPANCY STANDARDS AND UNIT OFFERS

INTRODUCTION........................................................................................................................ 5-1

PART I: OCCUPANCY STANDARDS

I.A...... OVERVIEW..................................................................................................................... 5-1

I.B...... DETERMINING UNIT SIZE............................................................................................ 5-1

I.C...... EXCEPTIONS TO OCCUPANCY STANDARDS......................................................... 5-2

PART II: UNIT OFFERS

II.A..... OVERVIEW..................................................................................................................... 5-4

II.B..... NUMBER OF OFFERS................................................................................................... 5-4

II.C..... TIME LIMIT FOR UNIT OFFER ACCEPTANCE OR REFUSAL................................. 5-5

II.D..... REFUSALS OF UNIT OFFERS...................................................................................... 5-5

II.E..... ACCESSIBLE UNITS...................................................................................................... 5-6

Chapter 6

INCOME AND RENT DETERMINATIONS

INTRODUCTION........................................................................................................................ 6-1

PART I: ANNUAL INCOME

I.A...... OVERVIEW..................................................................................................................... 6-1

I.B...... HOUSEHOLD COMPOSITION AND INCOME........................................................... 6-2

I.C...... ANTICIPATING ANNUAL INCOME............................................................................ 6-4

I.D...... EARNED INCOME......................................................................................................... 6-6

I.E....... EARNED INCOME DISALLOWANCE......................................................................... 6-8

I.F....... BUSINESS INCOME.................................................................................................... 6-10

I.G...... ASSETS.......................................................................................................................... 6-11

I.H...... PERIODIC PAYMENTS................................................................................................ 6-17

I.I........ PAYMENTS IN LIEU OF EARNINGS......................................................................... 6-18

I.J....... WELFARE ASSISTANCE............................................................................................. 6-18

I.K...... PERIODIC AND DETERMINABLE ALLOWANCES.................................................. 6-19

I.L....... ADDITIONAL EXCLUSIONS FROM ANNUAL INCOME........................................ 6-20

PART II: ADJUSTED INCOME

II.A..... INTRODUCTION.......................................................................................................... 6-22

II.B..... DEPENDENT DEDUCTION......................................................................................... 6-23

II.C..... ELDERLY OR DISABLED FAMILY DEDUCTION..................................................... 6-23

II.D..... MEDICAL EXPENSES DEDUCTION.......................................................................... 6-23

II.E..... DISABILITY ASSISTANCE EXPENSES DEDUCTION.............................................. 6-24

II.F..... CHILD CARE EXPENSE DEDUCTION....................................................................... 6-26

II.G..... PERMISSIVE DEDUCTIONS....................................................................................... 6-28

PART III: CALCULATING RENT

III.A.... OVERVIEW OF INCOME-BASED RENT CALCULATIONS.................................... 6-29

III.B.... FINANCIAL HARDSHIPS AFFECTING MINIMUM RENT....................................... 6-30

III.C.... UTILITY ALLOWANCES............................................................................................. 6-32

III.D.... PRORATED RENT FOR MIXED FAMILIES............................................................... 6-33

III.E.... FLAT RENTS AND FAMILY CHOICE IN RENTS..................................................... 6-34

EXHIBITS

6-1:..... ANNUAL INCOME INCLUSIONS.............................................................................. 6-35

6-2:..... ANNUAL INCOME EXCLUSIONS............................................................................. 6-37

6-3:..... TREATMENT OF FAMILY ASSETS............................................................................ 6-39

6-4:..... EARNED INCOME DISALLOWANCE FOR PERSONS WITH DISABILITIES........ 6-40

6-5:..... THE EFFECT OF WELFARE BENEFIT REDUCTION................................................ 6-42

Chapter 7

VERIFICATION

INTRODUCTION........................................................................................................................ 7-1

PART I: GENERAL VERIFICATION REQUIREMENTS

I.A...... FAMILY CONSENT TO RELEASE OF INFORMATION............................................. 7-1

I.B...... OVERVIEW OF VERIFICATION REQUIREMENTS.................................................... 7-2

I.C...... ENTERPRISE INCOME VERIFICATION (EIV)............................................................ 7-3

I.D...... THIRD-PARTY WRITTEN AND ORAL VERIFICATION............................................. 7-4

I.E....... REVIEW OF DOCUMENTS........................................................................................... 7-6

I.F....... SELF-CERTIFICATION.................................................................................................. 7-6

PART II: VERIFYING FAMILY INFORMATION

II.A..... VERIFICATION OF LEGAL IDENTITY........................................................................ 7-6

II.B..... SOCIAL SECURITY NUMBERS.................................................................................... 7-7

II.C..... DOCUMENTATION OF AGE........................................................................................ 7-8

II.D..... FAMILY RELATIONSHIPS............................................................................................ 7-8

II.E..... VERIFICATION OF STUDENT STATUS...................................................................... 7-9

II.F..... DOCUMENTATION OF DISABILITY........................................................................... 7-9

II.G..... CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS............................................ 7-10

PART III: VERIFYING INCOME AND ASSETS

III.A.... EARNED INCOME....................................................................................................... 7-12

III.B.... BUSINESS AND SELF EMPLOYMENT INCOME..................................................... 7-12

III.C.... PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS...................... 7-13

III.D.... ALIMONY OR CHILD SUPPORT................................................................................ 7-13

III.E.... ASSETS AND INCOME FROM ASSETS.................................................................... 7-14

III.F.... NET INCOME FROM RENTAL PROPERTY.............................................................. 7-14

III.G.... RETIREMENT ACCOUNTS ........................................................................................ 7-15

III.H.... INCOME FROM EXCLUDED SOURCES .................................................................. 7-15

III.I..... ZERO ANNUAL INCOME STATUS............................................................................ 7-15

PART IV: VERIFYING MANDATORY DEDUCTIONS

IV.A... DEPENDENT AND ELDERLY/DISABLED HOUSEHOLD DEDUCTIONS............... 7-16

IV.B.... MEDICAL EXPENSE DEDUCTION............................................................................ 7-16

IV.C... DISABILITY ASSISTANCE EXPENSES..................................................................... 7-17

IV.D... CHILD CARE EXPENSES............................................................................................ 7-19

EXHIBITS

7-1:..... Excerpt from HUD Verification Guidance Notice.............................................................. 7-21

7-2:..... Summary of Documentation Requirements for Noncitizens................................................ 7-24

Chapter 8

LEASING AND INSPECTIONS

INTRODUCTION........................................................................................................................ 8-1

PART I: LEASING

I.A...... OVERVIEW..................................................................................................................... 8-1

I.B...... LEASE ORIENTATION.................................................................................................. 8-1

I.C...... EXECUTION OF LEASE................................................................................................ 8-2

I.D...... MODIFICATIONS TO THE LEASE............................................................................... 8-2

I.E....... SECURITY DEPOSITS.................................................................................................... 8-3

I.F....... PAYMENTS UNDER THE LEASE................................................................................. 8-4

PART II: INSPECTIONS

II.A..... OVERVIEW..................................................................................................................... 8-6

II.B..... TYPES OF INSPECTIONS............................................................................................. 8-6

II.C..... NOTICE AND SCHEDULING OF INSPECTIONS ...................................................... 8-7

II.D..... INSPECTION RESULTS................................................................................................. 8-8

Chapter 9

REEXAMINATIONS

INTRODUCTION........................................................................................................................ 9-1

PART I: ANNUAL REEXAMINATIONS FOR FAMILIES PAYING
INCOME BASED RENTS

I.A...... OVERVIEW..................................................................................................................... 9-1

I.B...... SCHEDULING ANNUAL REEXAMINATIONS............................................................ 9-1

I.C...... CONDUCTING ANNUAL REEXAMINATIONS.......................................................... 9-3

I.D...... EFFECTIVE DATES........................................................................................................ 9-4

PART II: REEXAMINATIONS FOR FAMILIES PAYING FLAT RENTS

II.A..... OVERVIEW..................................................................................................................... 9-5

II.B..... FULL REEXAMINATION OF FAMILY INCOME AND COMPOSITION.................. 9-5

II.C..... REEXAMINATION OF FAMILY COMPOSITION (“ANNUAL UPDATE”)................ 9-5

PART III: INTERIM REEXAMINATIONS

III.A.... OVERVIEW..................................................................................................................... 9-6

III.B.... CHANGES IN FAMILY AND HOUSEHOLD COMPOSITION................................... 9-6

III.C.... CHANGES AFFECTING INCOME OR EXPENSES..................................................... 9-8

III.D.... PROCESSING THE INTERIM REEXAMINATION....................................................... 9-9

PART IV: RECALCULATING TENANT RENT

IV.A... OVERVIEW................................................................................................................... 9-10

IV.B.... CHANGES IN UTILITY ALLOWANCES.................................................................... 9-10

IV.C... NOTIFICATION OF NEW TENANT RENT................................................................ 9-10

IV.D... DISCREPANCIES......................................................................................................... 9-11

Chapter 10

PETS

INTRODUCTION...................................................................................................................... 10-1

PART I: ASSISTANCE ANIMALS

I.A...... OVERVIEW................................................................................................................... 10-1

I.B...... APPROVAL OF ASSISTANCE ANIMALS................................................................. 10-2

I.C...... CARE AND HANDLING.............................................................................................. 10-2

PART II: PET POLICIES FOR ALL DEVELOPMENTS

II.A..... OVERVIEW................................................................................................................... 10-3

II.B..... MANAGEMENT APPROVAL OF PETS...................................................................... 10-3

II.C..... STANDARDS FOR PETS.............................................................................................. 10-4

II.D..... PET RULES.................................................................................................................... 10-5

PART IV: PET DEPOSITS AND FEES

IV.A... OVERVIEW................................................................................................................... 10-8

IV.B.... PET DEPOSITS.............................................................................................................. 10-9

IV.D... OTHER CHARGES........................................................................................................ 10-9

Chapter 11

COMMUNITY SERVICE

INTRODUCTION...................................................................................................................... 11-1

PART I: COMMUNITY SERVICE REQUIREMENT

I.A...... OVERVIEW................................................................................................................... 11-1

I.B...... REQUIREMENTS.......................................................................................................... 11-1

I.C...... DETERMINATION OF EXEMPTION STATUS AND COMPLIANCE...................... 11-4

I.D...... DOCUMENTATION AND VERIFICATION............................................................... 11-5

I.E....... NONCOMPLIANCE..................................................................................................... 11-6

PART II: IMPLEMENTATION OF COMMUNITY SERVICE

II.A..... OVERVIEW................................................................................................................... 11-7

EXHIBITS

11-1:... COMMUNITY SERVICE AND SELF-SUFFICIENCY POLICY................................ 11-8

11-2:... DEFINITION OF A PERSON WITH A DISABILITY UNDER SOCIAL
SECURITY ACTS 216(i)(l) and Section 1416(excerpt) FOR PURPOSES
OF EXEMPTION FROM COMMUNITY SERVICE.................................................. 11-11

Chapter 12

TRANSFER POLICY

INTRODUCTION...................................................................................................................... 12-1

PART I: EMERGENCY TRANSFERS

I.A...... OVERVIEW................................................................................................................... 12-1

I.B...... EMERGENCY TRANSFERS......................................................................................... 12-2

I.C...... EMERGENCY TRANSFER PROCEDURES................................................................. 12-2

I.D...... COSTS OF TRANSFER................................................................................................ 12-2

PART II: PHA REQUIRED TRANSFERS

II.A..... OVERVIEW................................................................................................................... 12-3

II.B..... TYPES OF PHA REQUIRED TRANSFERS.................................................................. 12-3

II.C..... ADVERSE ACTION...................................................................................................... 12-4

II.D..... COST OF TRANSFER.................................................................................................. 12-4

PART III: TRANSFERS REQUESTED BY TENANTS

III.A.... OVERVIEW................................................................................................................... 12-5

III.B.... TYPES OF RESIDENT REQUESTED TRANSFERS.................................................... 12-5

III.C.... ELIGIBILITY FOR TRANSFER.................................................................................... 12-6

III.D.... SECURITY DEPOSITS.................................................................................................. 12-6

III.E.... HANDLING OF REQUESTS........................................................................................ 12-6

PART IV: TRANSFER PROCESSING

IV.A... OVERVIEW................................................................................................................... 12-6

IV.B.... TRANSFER LIST........................................................................................................... 12-6

IV.C... TRANSFER OFFER POLICY....................................................................................... 12-7

IV.D... GOOD CAUSE FOR UNIT REFUSAL......................................................................... 12-7

Chapter 13

LEASE TERMINATIONS

INTRODUCTION...................................................................................................................... 13-1

PART I: TERMINATION BY TENANT

I.A...... TENANT CHOOSES TO TERMINATE THE LEASE................................................... 13-2

PART II: TERMINATION BY PHA – MANDATORY

II.A..... OVERVIEW................................................................................................................... 13-2

II.B..... FAILURE TO PROVIDE CONSENT............................................................................ 13-2

II.C..... FAILURE TO DOCUMENT CITIZENSHIP.................................................................. 13-2

II.D..... FAILURE TO PROVIDE SOCIAL SECURITY DOCUMENTATION......................... 13-3

II.E..... FAILURE TO ACCEPT THE PHA’S OFFER OF A LEASE REVISION...................... 13-3

II.F..... METHAMPHETAMINE CONVICTION...................................................................... 13-3

II.G..... NONCOMPLIANCE WITH COMMUNITY SERVICE REQUIREMENTS................ 13-3

PART III: TERMINATION BY PHA – OTHER AUTHORIZED REASONS

III.A.... OVERVIEW................................................................................................................... 13-3

III.B.... MANDATORY LEASE PROVISIONS......................................................................... 13-4

III.C.... OTHER AUTHORIZED REASONS FOR TERMINATION.......................................... 13-7

III.D.... ALTERNATIVES TO TERMINATION OF TENANCY............................................... 13-9

III.E.... CRITERIA FOR DECIDING TO TERMINATE TENANCY....................................... 13-10

PART IV: NOTIFICATION REQUIREMENTS, EVICTION
PROCEDURES AND RECORD KEEPING

IV.A... OVERVIEW................................................................................................................. 13-12

IV.B.... CONDUCTING CRIMINAL RECORDS CHECKS................................................... 13-12

IV.C... DISCLOSURE OF CRIMINAL RECORDS TO FAMILY.......................................... 13-12

IV.D... LEASE TERMINATION NOTICE.............................................................................. 13-13

IV.E.... EVICTION................................................................................................................... 13-15

IV.F.... NOTIFICATION TO POST OFFICE.......................................................................... 13-15

IV.G... RECORD KEEPING.................................................................................................... 13-15

Chapter 14

GRIEVANCES AND APPEALS

INTRODUCTION...................................................................................................................... 14-1

PART I: INFORMAL HEARINGS FOR PUBLIC HOUSING APPLICANTS

I.A...... OVERVIEW................................................................................................................... 14-1

I.B...... INFORMAL HEARING PROCESS............................................................................... 14-1

PART II: INFORMAL HEARINGS WITH REGARD TO NONCITIZENS

II.A..... HEARING AND APPEAL PROVISIONS FOR NONCITIZENS................................. 14-3

PART III: GRIEVANCE PROCEDURES FOR PUBLIC HOUSING RESIDENTS

III.A.... REQUIREMENTS.......................................................................................................... 14-6

III.B.... DEFINITIONS............................................................................................................... 14-6

III.C.... APPLICABILITY........................................................................................................... 14-7

III.D.... INFORMAL SETTLEMENT OF GRIEVANCE............................................................ 14-8

III.E.... PROCEDURES TO OBTAIN A HEARING.................................................................. 14-8

III.F.... SELECTION OF HEARING OFFICER/PANEL........................................................... 14-9

III.G.... PROCEDURES GOVERNING THE HEARING.......................................................... 14-10

III.H.... DECISION OF THE HEARING OFFICER/PANEL.................................................... 14-12

Chapter 15

PROGRAM INTEGRITY

INTRODUCTION...................................................................................................................... 15-1

PART I: PREVENTING, DETECTING, AND
INVESTIGATING ERRORS AND PROGRAM ABUSE

I.A...... PREVENTING ERRORS AND PROGRAM ABUSE.................................................... 15-1

I.B...... DETECTING ERRORS AND PROGRAM ABUSE ...................................................... 15-2

I.C...... INVESTIGATING ERRORS AND PROGRAM ABUSE............................................... 15-2

PART II: CORRECTIVE MEASURES AND PENALTIES

II.A..... UNDER- OR OVERPAYMENT.................................................................................... 15-4

II.B..... FAMILY-CAUSED ERRORS AND PROGRAM ABUSE............................................. 15-4

II.C..... PHA-CAUSED ERRORS OR PROGRAM ABUSE....................................................... 15-5

II.D..... CRIMINAL PROSECUTION........................................................................................ 15-6

II.E..... FRAUD AND PROGRAM ABUSE RECOVERIES....................................................... 15-7

Chapter 16

PROGRAM ADMINISTRATION

INTRODUCTION...................................................................................................................... 16-1

PART I: SETTING UTILITY ALLOWANCES

I.A...... OVERVIEW................................................................................................................... 16-1

I.B...... UTILITY ALLOWANCES............................................................................................. 16-2

I.C...... SURCHARGES FOR PHA-FURNISHED UTILITIES................................................... 16-3

I.D...... NOTICE REQUIREMENTS.......................................................................................... 16-3

I.E....... REASONABLE ACCOMMODATION......................................................................... 16-3

PART II: ESTABLISHING FLAT RENTS AND
PUBLIC HOUSING MAXIMUM RENTS

II.A..... OVERVIEW................................................................................................................... 16-4

II.B..... FLAT RENTS................................................................................................................. 16-4

II.C..... PUBLIC HOUSING MAXIMUM RENTS..................................................................... 16-5

PART III: FAMILY DEBTS TO THE PHA

III.A.... OVERVIEW................................................................................................................... 16-5

III.B.... REPAYMENT POLICY................................................................................................. 16-6

PART IV: PUBLIC HOUSING ASSESSMENT SYSTEM (PHAS)

IV.A... OVERVIEW................................................................................................................... 16-7

IV.B.... PHAS INDICATORS..................................................................................................... 16-7

IV.C... PHAS SCORING........................................................................................................... 16-8

PART V: RECORD KEEPING

V.A..... OVERVIEW................................................................................................................... 16-9

V.B..... RECORD RETENTION................................................................................................. 16-9

V.C..... RECORDS MANAGEMENT......................................................................................... 16-9

PART VI: REPORTING REQUIREMENTS FOR CHILDREN WITH ENVIRONMENTAL INTERVENTION BLOOD LEAD LEVEL

VI.A... REPORTING REQUIREMENTS................................................................................. 16-10

Chapter 17

VIOLENCE AGAINST WOMAN

INTRODUCTION...................................................................................................................... 17-1

PART I: MISSION STATEMENT

I.A...... OVERVIEW................................................................................................................... 17-1

PART II: DEFINITIONS

II.A..... OVERVIEW................................................................................................................... 17-1

PART III: CERTIFICATION AND CONFIDENTIALITY

III.A.... FAILURE TO PROVIDE CERTIFICATION................................................................. 17-2

III.B.... HUD APPROVED CERTIFICATION........................................................................... 17-2

III.C.... OTHER CERTIFICATION............................................................................................ 17-3

III.D.... CONFIDENTIALITY..................................................................................................... 17-3

PART IV: DENIAL OF ADMISSION, ASSITANCE OR TENANCY

IV.A... OVERVIEW................................................................................................................... 17-3

Introduction

ABOUT THE MODEL ACOP

HOW TO USE THE MODEL ACOP

The model ACOP includes recommended language for each area in which the PHA has discretion or flexibility to adopt its own policies. To make the editing process easier, the model ACOP contains only one version of each policy – generally HUD’s safe harbor policy or the policy that seems to be common to most PHAs. This means that if the model policy language works for your PHA, no cutting and pasting is required.

HUD regulations and other requirements are described in detail in the model ACOP with appropriate citations. They are also summarized in the policy guide as needed to assist in making decisions.

The Policy Guide and Instructions

The policy guide is a decision-making tool for PHA policy makers. You can use the guide as a checklist for evaluating your compliance with HUD requirements and for making decisions about local policies. PHA decision points are identified throughout this document with this symbol:

The policy guide provides recommended language and policy options and explains why the recommended language is used in the model ACOP.

· If you decide to adopt an alternative policy, you may edit or delete the NMA-provided language in the model ACOP, cut and paste another option from the policy guide, or develop and type in your own wording.

Before starting work on the revision, print out the Acrobat PDF files of the model ACOP pages and policy guide for each chapter. Read through the model policy and review the decision points in the policy guide to determine if you want to make any changes to the model ACOP. After you have edited the model ACOP, print out the revised chapter to update your hard copy and, and edit the table of contents (TOC) file if necessary to update the TOC for your ACOP.

Working with the Computer Files

On your hard drive or network drive, set up a subdirectory (such as ACOPrev) for the ACOP revision in your ACOP or other directory in which you keep your documents. Copy the files for the policy document and the guide chapters from the CD-ROM into that directory and use them as your working files. Store your CD-ROM in a safe place.

ABOUT THE MODEL ACOP AND THE PUBLIC HOUSING LEASE

PHA policy must be consistent with the public housing lease and any policy documents provided to tenants, and the lease and policy documents must comply with federal and state law.

The model ACOP contains policies that reflect the terms of your public housing lease. Policies on a particular topic may be included in the public housing lease, or may be a separate document incorporated in the lease by reference, such as a pet policy or transfer policy.

Because of variations in state and local landlord-tenant law, and because HUD affords PHAs wide discretion in some areas, a broad range of policies could be acceptable. Only a few of these compliant policies can be listed in the model ACOP.

If you are assured that your current Board-approved public housing lease or separate policy document is up-to-date and is compliant with HUD requirements and with federal, state, and local laws, then it is neither necessary nor advisable to revise the terms of your lease or policy document to match default policies in the model ACOP. Instead, you should edit the model ACOP to match the terms of your existing public housing lease.

REFERENCES CITED IN THE MODEL ACOP

Authority for PHA policies is derived from many sources. Primary among these sources are regulations and guidance issued by HUD. State law also directs PHA policy. State law must be followed where such law exists and does not conflict with federal regulations. In the absence of legal requirements or HUD guidance, industry practice may lead to PHA policy. Finally, the public housing lease will affect PHA policy and therefore must be consistent with federal and state laws and regulations.

HUD

HUD provides the primary source of PHA policy through federal regulations, HUD Notices and handbooks. Compliance with federal regulations, current HUD Notices and HUD handbooks is mandatory.

HUD provides nonmandatory guidance to PHAs through HUD published guidebooks. Expired HUD Notices and handbooks also provide guidance for PHA policy. Following HUD guidance is optional, as long as PHA policies comply with federal law, federal regulations and mandatory policy. Because HUD has already determined that the guidance it provides is consistent with mandatory policies, PHA reliance on HUD guidance provides the PHA with a “safe harbor.”

Content contained on the HUD website can provide further clarification of HUD policies. For example, FAQs on the HUD website can provide direction on the application of federal regulations to a specific pattern.

State Law

Where there is no mandatory federal guidance, PHAs must comply with state law, if it exists. Where state law is more restrictive than federal law, but does not conflict with it, the PHA should follow the state law.

Industry Practice

Where no law or HUD authority exists on a particular subject, industry practice may support PHA policy. An industry practice is a way of doing things that is followed by most housing authorities.

Chapter 6

INCOME AND RENT DETERMINATIONS

[24 CFR Part 5, Subparts E and F; 24 CFR 960, Subpart C]

INTRODUCTION

A family’s income determines eligibility for assistance and is also used to calculate the family’s rent payment. The PHA will use the policies and methods described in this chapter to ensure that only eligible families receive assistance and that no family pays more or less than its obligation under the regulations. This chapter describes HUD regulations and PHA policies related to these topics in three parts as follows:

Part I: Annual Income. HUD regulations specify the sources of income to include and exclude to arrive at a family’s annual income. These requirements and PHA policies for calculating annual income are found in Part I.

Part II: Adjusted Income. Once annual income has been established HUD regulations require the PHA to subtract from annual income any of five mandatory deductions for which a family qualifies. These requirements and PHA policies for calculating adjusted income are found in Part II.

Part III: Calculating Rent. This part describes the statutory formula for calculating total tenant payment (TTP), the use of utility allowances, and the methodology for determining family rent payment. Also included here are flat rents and the family’s choice in rents.

PART I: ANNUAL INCOME

6-I.A. OVERVIEW

The general regulatory definition of annual income shown below is from 24 CFR 5.609.

5.609 Annual income.

(a) Annual income means all amounts, monetary or not, which:

(1) Go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or

(2) Are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date; and

(3) Which are not specifically excluded in paragraph [5.609(c)].

(4) Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access.

In addition to this general definition, HUD regulations establish policies for treating specific types of income and assets. The full texts of those portions of the regulations are provided in exhibits at the end of this chapter as follows:

· Annual Income Inclusions (Exhibit 6-1)

· Annual Income Exclusions (Exhibit 6-2)

· Treatment of Family Assets (Exhibit 6-3)

· Earned Income Disallowance (Exhibit 6-4)

· The Effect of Welfare Benefit Reduction (Exhibit 6-5)

Sections 6-I.B and 6-I.C discuss general requirements and methods for calculating annual income. The rest of this section describes how each source of income is treated for the purposes of determining annual income. HUD regulations present income inclusions and exclusions separately [24 CFR 5.609(b) and 24 CFR 5.609(c)]. In this ACOP, however, the discussions of income inclusions and exclusions are integrated by topic (e.g., all policies affecting earned income are discussed together in section 6-I.D). Verification requirements for annual income are discussed in Chapter 7.

6-I.B. HOUSEHOLD COMPOSITION AND INCOME

Income received by all family members must be counted unless specifically excluded by the regulations. It is the responsibility of the head of household to report changes in family composition. The rules on which sources of income are counted vary somewhat by family member. The chart below summarizes how family composition affects income determinations.

Summary of Income Included and Excluded by Person
Live-in aides	Income from all sources is excluded [24 CFR 5.609(c)(5)].
Foster child or foster adult	Income from all sources is excluded [24 CFR 5.609(a)(1)].
Head, spouse, or cohead Other adult family members	All sources of income not specifically excluded by the regulations are included.
Children under 18 years of age	Employment income is excluded [24 CFR 5.609(c)(1)]. All other sources of income, except those specifically excluded by the regulations, are included.
Full-time students 18 years of age or older (not head, spouse, or cohead)	Employment income above $480/year is excluded [24 CFR 5.609(c)(11)]. All other sources of income, except those specifically excluded by the regulations, are included.

Temporarily Absent Family Members

The income of family members approved to live in the unit will be counted, even if the family member is temporarily absent from the unit [HCV GB, p. 5-18].

PHA Policy

Generally an individual who is expected to be absent from the unit for 180 consecutive days or less is considered temporarily absent and continues to be considered a family member. An individual who is or is expected to be absent from the unit for more than 180 consecutive days is considered permanently absent and is no longer a family member. Exceptions to this general policy are discussed below.

Absent Students

PHA Policy

When someone who has been considered a family member attends school away from home, the person will continue to be considered a family member unless information becomes available to the PHA indicating that the student has established a separate household or the family declares that the student has established a separate household.

Absences Due to Placement in Foster Care

Children temporarily absent from the home as a result of placement in foster care are considered members of the family [24 CFR 5.403].

PHA Policy

If a child has been placed in foster care, the PHA will verify with the appropriate agency whether and when the child is expected to be returned to the home. Unless the agency confirms that the child has been permanently removed from the home, the child will be counted as a family member.

Absent Head, Spouse, or Cohead

PHA Policy

An employed head, spouse, or cohead absent from the unit more than 180 consecutive days due to employment will continue to be considered a family member.

Individuals Confined for Medical Reasons

PHA Policy

An individual confined to a nursing home or hospital on a permanent basis is not considered a family member.

If there is a question about the status of a family member, the PHA will request verification from a responsible medical professional and will use this determination. If the responsible medical professional cannot provide a determination, the person generally will be considered temporarily absent. The family may present evidence that the family member is confined on a permanent basis and request that the person not be considered a family member.

Joint Custody of Children

PHA Policy

Dependents that are subject to a joint custody arrangement will be considered a member of the family, if they live with the applicant or resident family 51 percent or more of the time.

When more than one applicant or assisted family are claiming the same dependents as family members, the family with primary custody at the time of the initial examination or reexamination will be able to claim the dependents. If there is a dispute about which family should claim them, the PHA will make the determination based on available documents such as court orders, or an IRS return showing which family has claimed the child for income tax purposes.
Caretakers for a Child

PHA Policy

If neither a parent nor a designated guardian remains in a household receiving assistance, the PHA will take the following actions.

If a responsible agency has determined that another adult is to be brought into the unit to care for a child for an indefinite period, the designated caretaker will not be considered a family member until a determination of custody or legal guardianship is made.

If a caretaker has assumed responsibility for a child without the involvement of a responsible agency or formal assignment of custody or legal guardianship, the caretaker will be treated as a visitor for 90 days. After the 90 days has elapsed, the caretaker will be considered a family member unless information is provided that would confirm that the caretaker’s role is temporary. In such cases the PHA will extend the caretaker’s status as an eligible visitor.

At any time that custody or guardianship legally has been awarded to a caretaker, the lease will be transferred to the caretaker, as head of household.

During any period that a caretaker is considered a visitor, the income of the caretaker is not counted in annual income and the caretaker does not qualify the family for any deductions from income.

6-I.C. ANTICIPATING ANNUAL INCOME

The PHA is required to count all income “anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date” [24 CFR 5.609(a)(2)]. Policies related to anticipating annual income are provided below.

Basis of Annual Income Projection

The PHA generally will use current circumstances to determine anticipated income for the coming 12-month period. HUD authorizes the PHA to use other than current circumstances to anticipate income when:

· An imminent change in circumstances is expected [HCV GB, p. 5-17]

· It is not feasible to anticipate a level of income over a 12-month period (e.g., seasonal or cyclic income) [24 CFR 5.609(d)]

· The PHA believes that past income is the best available indicator of expected future income [24 CFR 5.609(d)]

PHA Policy

When the PHA cannot readily anticipate income based upon current circumstances (e.g., in the case of seasonal employment, unstable working hours, or suspected fraud), the PHA will review and analyze historical data for patterns of employment, paid benefits, and receipt of other income and use the results of this analysis to establish annual income.

Known Changes in Income

If the PHA verifies an upcoming increase or decrease in income, annual income will be calculated by applying each income amount to the appropriate part of the 12-month period.

Example: An employer reports that a full-time employee who has been receiving $6/hour will begin to receive $6.25/hour in the eighth week after the effective date of the reexamination. In such a case the PHA would calculate annual income as follows: ($6/hour × 40 hours × 7 weeks) + ($6.25 × 40 hours × 45 weeks).

The family may present information that demonstrates that implementing a change before its effective date would create a hardship for the family. In such cases the PHA will calculate annual income using current circumstances and then require an interim reexamination when the change actually occurs. This requirement will be imposed even if the PHA’s policy on reexaminations does not require interim reexaminations for other types of changes.

Using Enterprise Income Verification (EIV) to Project Income

HUD strongly recommends the use of enterprise income verification (EIV). EIV is “the verification of income, before or during a family reexamination, through an independent source that systematically and uniformly maintains income information in computerized form for a large number of individuals” [PIH Notice 2004-01 Verification Guidance (“VG”), p. 7].

HUD allows PHAs to use EIV information in conjunction with family-provided documents to anticipate income.

PHA Policy

PHA procedures for anticipating annual income will include the use of EIV methods approved by HUD in conjunction with family-provided documents dated within the last 60 days of the PHA interview date.

The PHA will follow “HUD Guidelines for Projecting Annual Income When EIV Data Is Available” in handling differences between EIV and family-provided income data. The guidelines depend on whether a difference is substantial or not. HUD defines substantial difference as a difference of $200 or more per month.

No Substantial Difference. If EIV information for a particular income source differs from the information provided by a family by less than $200 per month, the PHA will follow these guidelines:

If the EIV figure is less than the family’s figure, the PHA will use the family’s information.

If the EIV figure is more than the family’s figure, the PHA will use the EIV data unless the family provides documentation of a change in circumstances to explain the discrepancy (e.g., a reduction in work hours). Upon receipt of acceptable family-provided documentation of a change in circumstances, the PHA will use the family-provided information.

Substantial Difference. If EIV information for a particular income source differs from the information provided by a family by $200 or more per month, the PHA will follow these guidelines:

The PHA will request written third-party verification from the discrepant income source in accordance with 24 CFR 5.236(b)(3)(i).

When the PHA cannot readily anticipate income (e.g., in cases of seasonal employment, unstable working hours, or suspected fraud), the PHA will review historical income data for patterns of employment, paid benefits, and receipt of other income.

The PHA will analyze all EIV, third-party, and family-provided data and attempt to resolve the income discrepancy.

The PHA will use the most current verified income data and, if appropriate, historical income data to calculate anticipated annual income.

6-I.D. EARNED INCOME

Types of Earned Income Included in Annual Income

Wages and Related Compensation [24 CFR 5.609(b)(1)]

The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services is included in annual income.

Some Types of Military Pay

All regular pay, special pay and allowances of a member of the Armed Forces are counted [24 CFR 5.609(b)(8)] except for the special pay to a family member serving in the Armed Forces who is exposed to hostile fire [24 CFR 5.609(c)(7)].

Types of Earned Income Not Counted in Annual Income

Temporary, Nonrecurring, or Sporadic Income [24 CFR 5.609(c)(9)]

This type of income (including gifts) is not included in annual income.

Children’s Earnings [24 CFR 5.609(c)(1)]

Employment income earned by children (including foster children) under the age of 18 years is not included in annual income. (See Eligibility chapter for a definition of foster children.)

Certain Earned Income of Full-Time Students

Earnings in excess of $480 for each full-time student 18 years old or older (except for the head, spouse, or cohead) are not counted [24 CFR 5.609(c)(11)]. To be considered “full-time,” a student must be considered “full-time” by an educational institution with a degree or certificate program [HCV GB, p. 5-29].

Income of a Live-in Aide.

Income earned by a live-in aide, as defined in [24 CFR 5.403], is not included in annual income [24 CFR 5.609(c)(5)]. (See Eligibility chapter for a full discussion of live-in aides.)

Income Earned under Certain Federal Programs [24 CFR 5.609(c)(17)]

Income from some federal programs is specifically excluded from consideration as income, including:

· Payments to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058)

· Payments received under programs funded in whole or in part under the Job Training Partnership Act (29 U.S.C. 1552(b))

· Awards under the federal work-study program (20 U.S.C. 1087 uu)

· Payments received from programs funded under Title V of the Older Americans Act of 1985 (42 U.S.C. 3056(f))

· Allowances, earnings, and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d))

· Allowances, earnings, and payments to participants in programs funded under the Workforce Investment Act of 1998 (29 U.S.C. 2931)

Resident Service Stipend [24 CFR 5.600(c)(8)(iv)]

Amounts received under a resident service stipend are not included in annual income. A resident service stipend is a modest amount (not to exceed $200 per individual per month) received by a resident for performing a service for the PHA, on a part-time basis, that enhances the quality of life in the development. Such services may include, but are not limited to, fire patrol, hall monitoring, lawn maintenance, resident initiatives coordination, and serving as a member of the PHA’s governing board. No resident may receive more than one such stipend during the same period of time.

State and Local Employment Training Program

Incremental earnings and benefits to any family member resulting from participation in qualifying state or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff are excluded from annual income. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives and are excluded only for the period during which the family member participates in the training program [24 CFR 5.609(c)(8)(v)].

PHA Policy

A training program qualifying under 24 CFR 5.609 (c)(8)(v) is defined as one with goals and objectives designed to lead to a higher level of proficiency, and one which enhances the individual’s ability to obtain employment. The training program may have performance standards to measure proficiency. Training may include, but is not limited to:

· Classroom training in a specific occupational skill;

· On-the-job training with wages subsidized by the program, or

· Basic education.

The PHA defines incremental earnings and benefits as the difference between (1) the total amount of welfare assistance and earnings of a family member prior to enrollment in a training program and (2) the total amount of welfare assistance and earnings of the family member after enrollment in the program [expired Notice PIH 98-2, pp. 3–4].

In calculating the incremental difference, the PHA will use as the pre-enrollment income the total annualized amount of the family member’s welfare assistance and earnings reported on the family’s most recently completed HUD-50058.

End of participation in a training program must be reported in accordance with the PHA's interim reporting requirements (see chapter on reexaminations).

HUD-Funded Training Programs

Amounts received under training programs funded in whole or in part by HUD [24 CFR 5.609(c)(8)(i)] are excluded from annual income. Eligible sources of funding for the training include operating subsidy, Section 8 administrative fees, and modernization, Community Development Block Grant (CDBG), HOME program, and other grant funds received from HUD.

PHA Policy

To qualify as a training program, the program must meet the definition of training program provided above for state and local employment training programs.

Earned Income Tax Credit. Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 32(j)), are excluded from annual income [24 CFR 5.609(c)(17)]. Although many families receive the EITC annually when they file taxes, an EITC can also be received throughout the year. The prorated share of the annual EITC is included in the employee’s payroll check.

Earned Income Disallowance. The earned income disallowance is discussed in section 6-I.E below.

6-I.E. EARNED INCOME DISALLOWANCE [24 CFR 960.255]

The earned income disallowance (EID) encourages people to enter the work force by not including the full value of increases in earned income for a period of time. The full text of 24 CFR 960.255 is included as Exhibit 6-4 at the end of this chapter. Eligibility criteria and limitations on the disallowance are summarized below.

Eligibility

This disallowance applies only to individuals in families already participating in the public housing program (not at initial examination). To qualify, the family must experience an increase in annual income that is the result of one of the following events:

· Employment of a family member who was previously unemployed for one or more years prior to employment. Previously unemployed includes a person who annually has earned not more than the minimum wage applicable to the community multiplied by 500 hours. The applicable minimum wage is the federal minimum wage unless there is a higher state or local minimum wage.

· Increased earnings by a family member whose earnings increase during participation in an economic self-sufficiency or job-training program. A self-sufficiency program includes a program designed to encourage, assist, train, or facilitate the economic independence of HUD-assisted families or to provide work to such families [24 CFR 5.603(b)].

· New employment or increased earnings by a family member who has received benefits or services under Temporary Assistance for Needy Families (TANF) or any other state program funded under Part A of Title IV of the Social Security Act within the past six months. If the benefits are received in the form of monthly maintenance, there is no minimum amount. If the benefits or services are received in a form other than monthly maintenance, such as one-time payments, wage subsidies, or transportation assistance, the total amount received over the six-month period must be at least $500.

Calculation of the Disallowance

Calculation of the earned income disallowance for an eligible member of a qualified family begins with a comparison of the member’s current income with his or her “prior income.”

PHA Policy

The PHA defines prior income, or prequalifying income, as the family member’s last certified income prior to qualifying for the EID.

The family member’s prior, or prequalifying, income remains constant throughout the period that he or she is receiving the EID.

Initial 12-Month Exclusion

During the initial 12-month exclusion period, the full amount (100 percent) of any increase in income attributable to new employment or increased earnings is excluded. The 12 months are cumulative and need not be consecutive.

PHA Policy

The initial EID exclusion period will begin on the first of the month following the date an eligible member of a qualified family is first employed or first experiences an increase in earnings.

Second 12-Month Exclusion and Phase-In

During the second 12-month exclusion period, the exclusion is reduced to half (50 percent) of any increase in income attributable to employment or increased earnings. The 12 months are cumulative and need not be consecutive.

Lifetime Limitation

The EID has a four-year (48-month) lifetime maximum. The four-year eligibility period begins at the same time that the initial exclusion period begins and ends 48 months later. The one-time eligibility for the EID applies even if the eligible individual begins to receive assistance from another housing agency, if the individual moves between public housing and Section 8 assistance, or if there are breaks in assistance.

Individual Savings Accounts [24 CFR 960.255(d)]

PHA Policy

The PHA chooses not to establish a system of individual savings accounts (ISAs) for families who qualify for the EID.

6-I.F. BUSINESS INCOME [24 CFR 5.609(b)(2)]

Annual income includes “the net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family” [24 CFR 5.609(b)(2)].

Business Expenses

Net income is “gross income less business expense” [HCV GB, p. 5-19].

PHA Policy

To determine business expenses that may be deducted from gross income, the PHA will use current applicable Internal Revenue Service (IRS) rules for determining allowable business expenses [see IRS Publication 535], unless a topic is addressed by HUD regulations or guidance as described below.

Business Expansion

HUD regulations do not permit the PHA to deduct from gross income expenses for business expansion.

PHA Policy

Business expansion is defined as any capital expenditures made to add new business activities, to expand current facilities, or to operate the business in additional locations. For example, purchase of a street sweeper by a construction business for the purpose of adding street cleaning to the services offered by the business would be considered a business expansion. Similarly, the purchase of a property by a hair care business to open at a second location would be considered a business expansion.

Capital Indebtedness

HUD regulations do not permit the PHA to deduct from gross income the amortization of capital indebtedness.

PHA Policy

Capital indebtedness is defined as the principal portion of the payment on a capital asset such as land, buildings, and machinery. This means the PHA will allow as a business expense interest, but not principal, paid on capital indebtedness.

Negative Business Income

If the net income from a business is negative, no business income will be included in annual income; a negative amount will not be used to offset other family income.

Withdrawal of Cash or Assets from a Business

HUD regulations require the PHA to include in annual income the withdrawal of cash or assets from the operation of a business or profession unless the withdrawal reimburses a family member for cash or assets invested in the business by the family.

PHA Policy

Acceptable investments in a business include cash loans and contributions of assets or equipment. For example, if a member of a tenant family provided an up-front loan of $2,000 to help a business get started, the PHA will not count as income any withdrawals from the business up to the amount of this loan until the loan has been repaid. Investments do not include the value of labor contributed to the business without compensation.

Co-owned Businesses

PHA Policy

If a business is co-owned with someone outside the family, the family must document the share of the business it owns. If the family’s share of the income is lower than its share of ownership, the family must document the reasons for the difference.

6-I.G. ASSETS [24 CFR 5.609(b)(3) and 24 CFR 5.603(b)]

Overview

There is no asset limitation for participation in the public housing program. However, HUD requires that the PHA include in annual income the “interest, dividends, and other net income of any kind from real or personal property” [24 CFR 5.609(b)(3)]. This section discusses how the income from various types of assets is determined. For most types of assets, the PHA must determine the value of the asset in order to compute income from the asset. Therefore, for each asset type, this section discusses:

· How the value of the asset will be determined

· How income from the asset will be calculated

Exhibit 6-1 provides the regulatory requirements for calculating income from assets [24 CFR 5.609(b)(3)], and Exhibit 6-3 provides the regulatory definition of net family assets. This section begins with a discussion of general policies related to assets and then provides HUD rules and PHA policies related to each type of asset.

General Policies

Income from Assets

The PHA generally will use current circumstances to determine both the value of an asset and the anticipated income from the asset. As is true for all sources of income, HUD authorizes the PHA to use other than current circumstances to anticipate income when (1) an imminent change in circumstances is expected (2) it is not feasible to anticipate a level of income over 12 months or (3) the PHA believes that past income is the best indicator of anticipated income. For example, if a family member owns real property that typically receives rental income but the property is currently vacant, the PHA can take into consideration past rental income along with the prospects of obtaining a new tenant.

Valuing Assets

The calculation of asset income sometimes requires the PHA to make a distinction between an asset’s market value and its cash value.

· The market value of an asset is its worth (e.g., the amount a buyer would pay for real estate or the balance in an investment account).

· The cash value of an asset is its market value less all reasonable amounts that would be incurred when converting the asset to cash.

PHA Policy

Reasonable costs that would be incurred when disposing of an asset include, but are not limited to, penalties for premature withdrawal, broker and legal fees, and settlement costs incurred in real estate transactions [HCV GB, p. 5-28 and PH Occ GB, p. 121].

Lump-Sum Receipts

Payments that are received in a single lump sum, such as inheritances, capital gains, lottery winnings, insurance settlements, and proceeds from the sale of property, are generally considered assets, not income. However, such lump-sum receipts are counted as assets only if they are retained by a family in a form recognizable as an asset (e.g., deposited in a savings or checking account) [RHIIP FAQs]. (For a discussion of lump-sum payments that represent the delayed start of a periodic payment, most of which are counted as income, see sections 6-I.H and 6-I.I.)

Imputing Income from Assets [24 CFR 5.609(b)(3)]

When net family assets are $5,000 or less, the PHA will include in annual income the actual income anticipated to be derived from the assets. When the family has net family assets in excess of $5,000, the PHA will include in annual income the greater of (1) the actual income derived from the assets or (2) the imputed income. Imputed income from assets is calculated by multiplying the total cash value of all family assets by the current HUD-established passbook savings rate.

Determining Actual Anticipated Income from Assets

It may or may not be necessary for the PHA to use the value of an asset to compute the actual anticipated income from the asset. When the value is required to compute the anticipated income from an asset, the market value of the asset is used. For example, if the asset is a property for which a family receives rental income, the anticipated income is determined by annualizing the actual monthly rental amount received for the property; it is not based on the property’s market value. However, if the asset is a savings account, the anticipated income is determined by multiplying the market value of the account by the interest rate on the account.

Withdrawal of Cash or Liquidation of Investments

Any withdrawal of cash or assets from an investment will be included in income except to the extent that the withdrawal reimburses amounts invested by the family. For example, when a family member retires, the amount received by the family from a retirement plan is not counted as income until the family has received payments equal to the amount the family member deposited into the retirement fund.

Jointly Owned Assets

The regulation at 24 CFR 5.609(a)(4) specifies that annual income includes “amounts derived (during the 12-month period) from assets to which any member of the family has access.”

PHA Policy

If an asset is owned by more than one person and any family member has unrestricted access to the asset, the PHA will count the full value of the asset. A family member has unrestricted access to an asset when he or she can legally dispose of the asset without the consent of any of the other owners.

If an asset is owned by more than one person, including a family member, but the family member does not have unrestricted access to the asset, the PHA will prorate the asset according to the percentage of ownership. If no percentage is specified or provided for by state or local law, the PHA will prorate the asset evenly among all owners.

Assets Disposed Of for Less than Fair Market Value [24 CFR 5.603(b)]

HUD regulations require the PHA to count as a current asset any business or family asset that was disposed of for less than fair market value during the two years prior to the effective date of the examination/reexamination, except as noted below.

Minimum Threshold

The PHA may set a threshold below which assets disposed of for less than fair market value will not be counted [HCV GB, p. 5-27].

PHA Policy

The PHA will not include the value of assets disposed of for less than fair market value unless the cumulative fair market value of all assets disposed of during the past two years exceeds the gross amount received for the assets by more than $1,000.

When the two-year period expires, the income assigned to the disposed asset(s) also expires. If the two-year period ends between annual recertifications, the family may request an interim recertification to eliminate consideration of the asset(s).

Assets placed by the family in nonrevocable trusts are considered assets disposed of for less than fair market value except when the assets placed in trust were received through settlements or judgments.

Separation or Divorce

The regulation also specifies that assets are not considered disposed of for less than fair market value if they are disposed of as part of a separation or divorce settlement and the applicant or tenant receives important consideration not measurable in dollar terms.

PHA Policy

All assets disposed of as part of a separation or divorce settlement will be considered assets for which important consideration not measurable in monetary terms has been received. In order to qualify for this exemption, a family member must be subject to a formal separation or divorce settlement agreement established through arbitration, mediation, or court order.

Foreclosure or Bankruptcy

Assets are not considered disposed of for less than fair market value when the disposition is the result of a foreclosure or bankruptcy sale.

Family Declaration

PHA Policy

Families must sign a declaration form at initial certification and each annual recertification identifying all assets that have been disposed of for less than fair market value or declaring that no assets have been disposed of for less than fair market value. The PHA may verify the value of the assets disposed of if other information available to the PHA does not appear to agree with the information reported by the family.

Types of Assets

Checking and Savings Accounts

For regular checking accounts and savings accounts, cash value has the same meaning as market value. If a checking account does not bear interest, the anticipated income from the account is zero.

PHA Policy

In determining the value of a checking account or savings account, the PHA will use the average monthly balance for the last six months.

In determining the anticipated income from an interest-bearing checking or savings account, the PHA will multiply the value of the account by the current rate of interest paid on the account.

Investment Accounts Such as Stocks, Bonds, Saving Certificates, and Money Market Funds

Interest or dividends earned by investment accounts are counted as actual income from assets even when the earnings are reinvested. The cash value of such an asset is determined by deducting from the market value any broker fees, penalties for early withdrawal, or other costs of converting the asset to cash.

PHA Policy

In determining the market value of an investment account, the PHA will use the value of the account on the most recent investment report.

How anticipated income from an investment account will be calculated depends on whether the rate of return is known. For assets that are held in an investment account with a known rate of return (e.g., savings certificates), asset income will be calculated based on that known rate (market value multiplied by rate of earnings). When the anticipated rate of return is not known (e.g., stocks), the PHA will calculate asset income based on the earnings for the most recent reporting period.

Equity in Real Property or Other Capital Investments

Equity (cash value) in a property or other capital asset is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker fees) that would be incurred in selling the asset [HCV GB, p. 5-25 and PH, p. 121].

Equity in real property and other capital investments is considered in the calculation of asset income except for the following types of assets:

· Equity accounts in HUD homeownership programs [24 CFR 5.603(b)]

· Equity in real property when a family member’s main occupation is real estate [HCV GB, p. 5-25]. This real estate is considered a business asset, and income related to this asset will be calculated as described in section 6-I.F.

· Interests in Indian Trust lands [24 CFR 5.603(b)]

· Real property and capital assets that are part of an active business or farming operation [HCV GB, p. 5-25]

A family may have real property as an asset in two ways: (1) owning the property itself and (2) holding a mortgage or deed of trust on the property. In the case of a property owned by a family member, the anticipated asset income generally will be in the form of rent or other payment for the use of the property. If the property generates no income, actual anticipated income from the asset will be zero.

In the case of a mortgage or deed of trust held by a family member, the outstanding balance (unpaid principal) is the cash value of the asset. The interest portion only of payments made to the family in accordance with the terms of the mortgage or deed of trust is counted as anticipated asset income.

PHA Policy

In the case of capital investments owned jointly with others not living in a family’s unit, a prorated share of the property’s cash value will be counted as an asset unless the PHA determines that the family receives no income from the property and is unable to sell or otherwise convert the asset to cash.

Trusts

A trust is a legal arrangement generally regulated by state law in which one party (the creator or grantor) transfers property to a second party (the trustee) who holds the property for the benefit of one or more third parties (the beneficiaries).

Revocable Trusts

If any member of a family has the right to withdraw the funds in a trust, the value of the trust is considered an asset [HCV GB, p. 5-25]. Any income earned as a result of investment of trust funds is counted as actual asset income, whether the income is paid to the family or deposited in the trust.

Nonrevocable Trusts

In cases where a trust is not revocable by, or under the control of, any member of a family, the value of the trust fund is not considered an asset. However, any income distributed to the family from such a trust is counted as a periodic payment or a lump-sum receipt, as appropriate [24 CFR 5.603(b)]. (Periodic payments are covered in section 6-I.H. Lump-sum receipts are discussed earlier in this section.)

Retirement Accounts

Company Retirement/Pension Accounts

In order to correctly include or exclude as an asset any amount held in a company retirement or pension account by an employed person, the PHA must know whether the money is accessible before retirement [HCV GB, p. 5-26].

While a family member is employed, only the amount the family member can withdraw without retiring or terminating employment is counted as an asset [HCV GB, p. 5-26].

After a family member retires or terminates employment, any amount distributed to the family member is counted as a periodic payment or a lump-sum receipt, as appropriate [HCV GB, p. 5-26], except to the extent that it represents funds invested in the account by the family member. (For more on periodic payments, see section 6-I.H.) The balance in the account is counted as an asset only if it remains accessible to the family member.

IRA, Keogh, and Similar Retirement Savings Accounts

IRA, Keogh, and similar retirement savings accounts are counted as assets even though early withdrawal would result in a penalty [HCV GB, p. 5-25].

Personal Property

Personal property held as an investment, such as gems, jewelry, coin collections, antique cars, etc., is considered an asset [HCV GB, p. 5-25].

PHA Policy

In determining the value of personal property held as an investment, the PHA will use the family’s estimate of the value. However, the PHA also may obtain an appraisal if appropriate to confirm the value of the asset. The family must cooperate with the appraiser but cannot be charged any costs related to the appraisal.

Generally, personal property held as an investment generates no income until it is disposed of. If regular income is generated (e.g., income from renting the personal property), the amount that is expected to be earned in the coming year is counted as actual income from the asset.

Necessary items of personal property are not considered assets [24 CFR 5.603(b)].

PHA Policy

Necessary personal property consists of items such as clothing, furniture, household furnishings, jewelry that is not held as an investment, and vehicles, including those specially equipped for persons with disabilities.

Life Insurance

The cash value of a life insurance policy available to a family member before death, such as a whole life or universal life policy, is included in the calculation of the value of the family’s assets [HCV GB 5-25]. The cash value is the surrender value. If such a policy earns dividends or interest that the family could elect to receive, the anticipated amount of dividends or interest is counted as income from the asset whether or not the family actually receives it.

PHA Policy

As verification of an asset value the PHA will accept the following:

· account statements

· passbooks

· certificates of deposit

· broker’s statements

· IRS forms from the financial institution

· A letter from an accountant, attorney, real estate broker or buyer

· Amortization schedule showing interest for the 12 months following the effective date.

· Copies of latest rent receipts, leases or other documentation of rental amounts

· Documentation of allowable operating expenses of the property; tax statements, insurance invoices and bills for reasonable maintenance and utilities

· Lessee’s written statement verifying rent payments to the family and the family’s notarized statement as to the net income realized

· PHA verification forms completed by the financial institution.

6-I.H. PERIODIC PAYMENTS

Periodic payments are forms of income received on a regular basis. HUD regulations specify periodic payments that are and are not included in annual income.

Periodic Payments Included in Annual Income

· Periodic payments from sources such as social security, unemployment and welfare assistance, annuities, insurance policies, retirement funds, and pensions. However, periodic payments from retirement accounts, annuities, and similar forms of investments are counted only after they exceed the amount contributed by the family [24 CFR 5.609(b)(4) and (b)(3)].

· Disability or death benefits and lottery receipts paid periodically, rather than in a single lump sum [24 CFR 5.609(b)(4) and HCV, p. 5-14]

Lump-Sum Payments for the Delayed Start of a Periodic Payment

Most lump sums received as a result of delays in processing periodic payments, such as unemployment or welfare assistance, are counted as income. However, lump-sum receipts for the delayed start of periodic social security or supplemental security income (SSI) payments are not counted as income [CFR 5.609(b)(4)].

Periodic Payments Excluded from Annual Income

· Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone) [24 CFR 5.609(c)(2)]

PHA Policy

The PHA will exclude payments for the care of foster children and foster adults only if the care is provided through an official arrangement with a local welfare agency [HCV GB, p. 5-18].

· Amounts paid by a state agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home [24 CFR 5.609(c)(16)]

· Amounts received under the Low-Income Home Energy Assistance Program (42 U.S.C. 1626(c)) [24 CFR 5.609(c)(17)]

· Amounts received under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858q) [24 CFR 5.609(c)(17)]

· Earned Income Tax Credit (EITC) refund payments (26 U.S.C. 32(j)) [24 CFR 5.609(c)(17)]. Note: EITC may be paid periodically if the family elects to receive the amount due as part of payroll payments from an employer.

· Lump sums received as a result of delays in processing Social Security and SSI payments (see section 6-I.J.) [24 CFR 5.609(b)(4)].

6-I.I. PAYMENTS IN LIEU OF EARNINGS

Payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation, and severance pay, are counted as income [24 CFR 5.609(b)(5)] if they are received either in the form of periodic payments or in the form of a lump-sum amount or prospective monthly amounts for the delayed start of a periodic payment. If they are received in a one-time lump sum (as a settlement, for instance), they are treated as lump-sum receipts [24 CFR 5.609(c)(3)]. (See also the discussion of periodic payments in section 6-I.H and the discussion of lump-sum receipts in section 6-I.G.)

6-I.J. WELFARE ASSISTANCE

Overview

Welfare assistance is counted in annual income. Welfare assistance includes Temporary Assistance for Needy Families (TANF) and any payments to individuals or families based on need that are made under programs funded separately or jointly by federal, state, or local governments [24 CFR 5.603(b)].

Sanctions Resulting in the Reduction of Welfare Benefits [24 CFR 5.615]

The PHA must make a special calculation of annual income when the welfare agency imposes certain sanctions on certain families. The full text of the regulation at 24 CFR 5.615 is provided as Exhibit 6-5. The requirements are summarized below. This rule applies only if a family was a public housing resident at the time the sanction was imposed.

Covered Families

The families covered by 24 CFR 5.615 are those “who receive welfare assistance or other public assistance benefits (‘welfare benefits’) from a State or other public agency (’welfare agency’) under a program for which Federal, State or local law requires that a member of the family must participate in an economic self-sufficiency program as a condition for such assistance” [24 CFR 5.615(b)]

Imputed Income

When a welfare agency imposes a sanction that reduces a family’s welfare income because the family commits fraud or fails to comply with the agency’s economic self-sufficiency program or work activities requirement, the PHA must include in annual income “imputed” welfare income. The PHA must request that the welfare agency inform the PHA when the benefits of a public housing resident are reduced. The imputed income is the amount the family would have received if the family had not been sanctioned.

This requirement does not apply to reductions in welfare benefits: (1) at the expiration of the lifetime or other time limit on the payment of welfare benefits, (2) if a family member is unable to find employment even though the family member has complied with the welfare agency economic self-sufficiency or work activities requirements, or (3) because a family member has not complied with other welfare agency requirements [24 CFR 5.615(b)(2)].

For special procedures related to grievance hearings based upon the PHA’s denial of a family’s request to lower rent when the family experiences a welfare benefit reduction, see Chapter 14, Grievances and Appeals.

Offsets

The amount of the imputed income is offset by the amount of additional income the family begins to receive after the sanction is imposed. When the additional income equals or exceeds the imputed welfare income, the imputed income is reduced to zero [24 CFR 5.615(c)(4)].

6-I.K. PERIODIC AND DETERMINABLE ALLOWANCES [24 CFR 5.609(b)(7)]

Annual income includes periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing with a tenant family.

Alimony and Child Support

The PHA must count alimony or child support amounts awarded as part of a divorce or separation agreement.

PHA Policy

The PHA will count court-awarded amounts for alimony and child support unless the PHA verifies that (1) the payments are not being made and (2) the family has made reasonable efforts to collect amounts due, including filing with courts or agencies responsible for enforcing payments [HCV GB, pp. 5-23 and 5-47].

Families who do not have court-awarded alimony and child support awards are not required to seek a court award and are not required to take independent legal action to obtain collection.

Regular Contributions or Gifts

The PHA must count as income regular monetary and nonmonetary contributions or gifts from persons not residing with a tenant family [24 CFR 5.609(b)(7)]. Temporary, nonrecurring, or sporadic income and gifts are not counted [24 CFR 5.609(c)(9)].

PHA Policy

Examples of regular contributions include: (1) regular payment of a family’s bills (e.g., utilities, telephone, rent, credit cards, and car payments), (2) cash or other liquid assets provided to any family member on a regular basis, and (3) “in-kind” contributions such as groceries and clothing provided to a family on a regular basis.

Nonmonetary contributions will be valued at the cost of purchasing the items, as determined by the PHA. For contributions that may vary from month to month (e.g., utility payments), the PHA will include an average amount based upon past history.

6-I.L. ADDITIONAL EXCLUSIONS FROM ANNUAL INCOME

Other exclusions contained in 24 CFR 5.609(c) that have not been discussed earlier in this chapter include the following:

· Reimbursement of medical expenses [24 CFR 5.609(c)(4)]

· The full amount of student financial assistance paid directly to the student or to the educational institution [24 CFR 5.609(c)(6)], except that in accordance with Section 224 of the FY 2005 Appropriations Act, the portion of any athletic scholarship assistance available for housing costs must be included in annual income [PIH Notice 2005-16].

PHA Policy

Regular financial support from parents or guardians to students for food, clothing personal items, and entertainment is not considered student financial assistance and is included in annual income.

· Amounts received by participants in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred and which are made solely to allow participation in a specific program [24 CFR 5.609(c)(8)(iii)]

· Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS) [(24 CFR 5.609(c)(8)(ii)]

· Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era [24 CFR 5.609(c)(10)]

· Adoption assistance payments in excess of $480 per adopted child [24 CFR 5.609(c)(12)]

· Refunds or rebates on property taxes paid on the dwelling unit [24 CFR 5.609(c)(15)]

· Amounts specifically excluded by any other federal statute [24 CFR 5.609(c)(17)]. HUD publishes an updated list of these exclusions periodically. It includes:

(a) The value of the allotment provided to an eligible household under the Food Stamp Act of 1977 (7 U.S.C. 2017 (b))

(b) Payments to Volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058)

(d) Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C. 459e)

(e) Payments or allowances made under the Department of Health and Human Services’ Low-Income Home Energy Assistance Program (42 U.S.C. 8624(f))

(f) Payments received under programs funded in whole or in part under the Job Training Partnership Act (29 U.S.C. 1552(b)) (Effective July 1, 2000, references to Job Training Partnership Act shall be deemed to refer to the corresponding provision of the Workforce Investment Act of 1998 (29 U.S.C. 2931).)

(g) Income derived from the disposition of funds to the Grand River Band of Ottawa Indians (Pub. L. 94-540, 90 Stat. 2503-04)

(h) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U. S. Claims Court, the interests of individual Indians in trust or restricted lands, including the first $2,000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands (25 U.S.C. 1407-1408)

(i) Amounts of scholarships funded under title IV of the Higher Education Act of 1965, including awards under the federal work-study program or under the Bureau of Indian Affairs student assistance programs (20 U.S.C. 1087uu)

(j) Payments received from programs funded under Title V of the Older Americans Act of 1985 (42 U.S.C. 3056(f))

(k) Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in In Re Agent-product liability litigation, M.D.L. No. 381 (E.D.N.Y.)

(l) Payments received under the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721)

(m) The value of any child care provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858q)

(n) Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 32(j))

(o) Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation (Pub. L. 95-433)

(p) Allowances, earnings and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d))

(q) Any allowance paid under the provisions of 38 U.S.C. 1805 to a child suffering from spina bifida who is the child of a Vietnam veteran (38 U.S.C. 1805)

(r) Any amount of crime victim compensation (under the Victims of Crime Act) received through crime victim assistance (or payment or reimbursement of the cost of such assistance) as determined under the Victims of Crime Act because of the commission of a crime against the applicant under the Victims of Crime Act (42 U.S.C. 10602)

(s) Allowances, earnings and payments to individuals participating in programs under the Workforce Investment Act of 1998 (29 U.S.C. 2931)

PART II: ADJUSTED INCOME

6-II.A. INTRODUCTION

Overview

HUD regulations require PHAs to deduct from annual income any of five mandatory deductions for which a family qualifies. The resulting amount is the family’s adjusted income. Mandatory deductions are found in 24 CFR 5.611.

5.611(a) Mandatory deductions. In determining adjusted income, the responsible entity (PHA) must deduct the following amounts from annual income:

(1) $480 for each dependent;

(2) $400 for any elderly family or disabled family;

(3) The sum of the following, to the extent the sum exceeds three percent of annual income:

(i) Unreimbursed medical expenses of any elderly family or disabled family;

(ii) Unreimbursed reasonable attendant care and auxiliary apparatus expenses for each member of the family who is a person with disabilities, to the extent necessary to enable any member of the family (including the member who is a person with disabilities) to be employed. This deduction may not exceed the earned income received by family members who are 18 years of age or older and who are able to work because of such attendant care or auxiliary apparatus; and

(4) Any reasonable child care expenses necessary to enable a member of the family to be employed or to further his or her education.

This part covers policies related to these mandatory deductions. Verification requirements related to these deductions are found in Chapter 7, Verifications.

Anticipating Expenses

PHA Policy

Generally, the PHA will use current circumstances to anticipate expenses. When possible, for costs that are expected to fluctuate during the year (e.g., child care during school and nonschool periods and cyclical medical expenses), the PHA will estimate costs based on historic data and known future costs.

If a family has an accumulated debt for medical or disability assistance expenses, the PHA will include as an eligible expense the portion of the debt that the family expects to pay during the period for which the income determination is being made. However, amounts previously deducted will not be allowed even if the amounts were not paid as expected in a preceding period. The PHA may require the family to provide documentation of payments made in the preceding year.

6-II.B. DEPENDENT DEDUCTION

A deduction of $480 is taken for each dependent [24 CFR 5.611(a)(1)]. Dependent is defined as any family member other than the head, spouse, or cohead who is under the age of 18 or who is 18 or older and is a person with disabilities or a full-time student. Foster children, foster adults, and live-in aides are never considered dependents [24 CFR 5.603(b)].

6-II.C. ELDERLY OR DISABLED FAMILY DEDUCTION

A single deduction of $400 is taken for any elderly or disabled family [24 CFR 5.611(a)(2)]. An elderly family is a family whose head, spouse, cohead, or sole member is 62 years of age or older, and a disabled family is a family whose head, spouse, cohead, or sole member is a person with disabilities [24 CFR 5.403].

6-II.D. MEDICAL EXPENSES DEDUCTION [24 CFR 5.611(a)(3)(i)]

Unreimbursed medical expenses may be deducted to the extent that, in combination with any disability assistance expenses, they exceed three percent of annual income.

The medical expense deduction is permitted only for families in which the head, spouse, or cohead is at least 62 or is a person with disabilities. If a family is eligible for a medical expense deduction, the medical expenses of all family members are counted [VG, p. 28].

Definition of Medical Expenses

HUD regulations define medical expenses at 24 CFR 5.603(b) to mean “medical expenses, including medical insurance premiums, that are anticipated during the period for which annual income is computed, and that are not covered by insurance.”