the control of any member of the family are excluded from net family assets. The value of the trust continues to be excluded from net family assets, so long as the fund continues to be held in a trust that is not revocable by, or under the control of, any member of the family or household [24 CFR 5.603(b)(4)]. Further, where an irrevocable trust is excluded from net family assets, the PHA must not consider actual income earned by the trust (e.g., interest earned, rental income if property is held in the trust) for so long as the income from the trust is not distributed.
A revocable trust is a trust that the creator of the trust may amend or end (revoke). When there is a revocable trust, the creator has access to the funds in the trust account. • A revocable trust that is under the control of the family is included in net family assets when the grantor is a member of the assisted family. If a revocable trust is included in the calculation of net family assets, then the actual income earned by the revocable trust is also included in the family’s income. For example, interest earned or rental income if the property is held in the trust. The PHA must calculate imputed income on the revocable trust if net family assets are more than the HUD-published threshold amount, which is adjusted annually and listed in HUD’s Inflation Adjusted Values tables ($50,000 for 2024, and $51,600 for 2025), and actual income from the trust cannot be calculated (e.g., if the trust is comprised of farmland that is not in use).A revocable trusts that is not under the control of the family are excluded from net family assets. This happens when a member of the assisted family is the beneficiary of a revocable trust, but the grantor is not a member of the assisted family. In this case the beneficiary does not “own” the revocable trust, and the value of the trust is excluded from net family assets. For the revocable trust to be considered excluded from net family assets, no family or household member may be the account’s trustee.
For both irrevocable and revocable trusts, if the value of the trust is not considered part of net family assets, then distributions from the trust are treated as follows:
• All distributions from the trust’s principal are excluded from income. • Distributions of income earned by the trust (i.e., interest, dividends, realized gains, or other earnings on the trust’s principal), are included as income unless the distribution is used to pay for the health and medical expenses for a minor.
Life Insurance [FR Notice 2/14/23 and Notice PIH 2023-27] Net family assets do not include the value of term life insurance, which has no cash value to the individual before death.
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. The cash value is the surrender value. While the cash value of an insurance policy is considered an asset, the face value of any policy is not. If such a policy earns dividends or interest that the family could elect to receive, the amount of dividends or interest is counted as income from the asset whether or not the family actually receives it. © Copyright 2024 Nan McKay & Associates, Inc.
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Tax Refunds [24 CFR 5.603(b)(3)(xi) and Notice PIH 2023-27] All amounts received by a family in the form of federal tax refunds or refundable tax credits are excluded from a family’s net family assets for a period of 12 months after receipt by the family.
At the time of an annual or interim reexamination of income, if the federal tax refund was received during the 12 months preceding the effective date of the reexamination, then the amount of the refund that was received by the family is subtracted from the total value of net family assets. When the subtraction results in a negative number, then net family assets are considered $0.
Asset Exclusions [24 CFR 5.603(b)]
The following are excluded from the calculations of net family assets:
• The value of any account under a retirement plan recognized as such by the IRS, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals [24 CFR 5.603(b)(3)(iii)]. • The value of real property that the family does not have the effective legal authority to sell in the jurisdiction in which the property is located [24 CFR 5.603(b)(3)(iv)]. - Real property as used in this part has the same meaning as that provided under the law of the state in which the property is located [24 CFR 5.100]. - Examples of this include but are not limited to co-ownership situations (including situations where one owner is a victim of domestic violence), where one party cannot unilaterally sell the real property; property that is tied up in litigation; and inherited property in dispute [Notice PIH 2023-27].
• Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a family member being a person with a disability [24 CFR 5.603(b)(3)(v)]; • The value of any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986 [24 CFR 5.603(b)(3)(vi)];
• The value of any qualified tuition program under Section 529 of such Code [24 CFR
5.603(b)(3)(vi)];
• The value of any “baby bond” account created, authorized, or funded by federal, state, or local government [24 CFR 5.603(b)(3)(vi)];
• Interests in Indian trust land [24 CFR 5.603(b)(3)(vii)]; • Equity in a manufactured home where the family receives assistance under 24 CFR part 982 [24 CFR 5.603(b)(3)(viii)];
• Equity in property under the Homeownership Option for which a family receives assistance under 24 CFR part 982 [24 CFR 5.603(b)(3)(ix)];
• Family Self-Sufficiency accounts [24 CFR 5.603(b)(3)(x)]; © Copyright 2024 Nan McKay & Associates, Inc.
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• Federal tax refunds or refundable tax credits for a period of 12 months after receipt by the family [24 CFR 5.603(b)(3)(xi)].
• The full amount of assets held in an irrevocable trust [Notice PIH 2023-27]; and • The full amount of assets held in a revocable trust where a member of the family is the beneficiary, but the grantor/owner and trustee of the trust is not a member of the participant family or household [Notice PIH 2023-27].
6B-II.D. DETERMINING INCOME FROM ASSETS
In some cases, amounts that are excluded from net family assets may be included as annual income when disbursements are made to a family from an asset. In other cases, amounts are excluded from annual income as a lump-sum addition to net family assets, but those funds are then considered a net family asset if held in an account or other investment that is considered part of net family assets [Notice PIH 2023-27].
Net Family Assets
Net family assets are defined as the net cash value of all assets owned by the family, after deducting reasonable costs that would be incurred in disposing real property, savings, stocks, bonds, and other forms of capital investment.
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 such as settlement costs and transfer taxes [New PH OCC GB, Income Determinations, p. 24].
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 in the market (e.g., the amount a buyer would pay for real estate or the total value of 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.
The cash value of real property or other assets with negative equity would be considered $0 for the purposes of calculating net family assets. Negative equity in real property or other investments does not prohibit the family from selling the property or other investments, so negative equity alone would not justify excluding the property or other investments from family assets [Notice PIH 2023-27].
Actual Income from Assets
Income from assets must be included on the Form HUD-50058 regardless of the amount of income. Actual income from assets is always included in a family’s annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets, unless that income is specifically excluded by 24 CFR 5.609(b). © Copyright 2024 Nan McKay & Associates, Inc.
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Income or returns from assets are generally considered to be interest, dividend payments, and other actual income earned on the asset, and not the increase in market value of the asset. The increase in market value is relevant to the cash value of the asset for the purpose of determining total net family assets and imputing income.
The PHA may determine the net assets of a family based on a self-certification by the family that the net family assets do not exceed the HUD-published threshold amount, which is adjusted annually and listed in HUD’s Inflation Adjusted Values tables, without taking additional steps to verify the accuracy of the declaration [24 CFR 5.618(b)]. Policies related to verification of assets are found in Chapter 7 of this policy.
• The threshold amount is $50,000 for 2024, and $51,600 for 2025.
The PHA may not calculate or include any imputed income from assets when net family assets less than or equal to the HUD-published threshold amount [24 CFR 5.609(b)(1)]. The actual income from assets must be included on the Form HUD-50058.
Imputed Income from Assets
When net family assets exceed the HUD-published threshold amount, which is adjusted annually and listed in HUD’s Inflation Adjusted Values tables the PHA may not rely on selfcertification. If actual returns can be calculated, the PHA must include actual income from the asset on the Form HUD-50058 (for example, a savings account or CD where the rate of return is known). If actual returns cannot be calculated, the PHA must calculate imputed returns using the HUD-determined passbook rate (for example, real property or a non-necessary item of personal property such as a recreational boat). Imputed income is calculated by multiplying the net cash value of the asset (found by deducting reasonable costs that would be incurred in disposing of the asset from the market value), after deducting reasonable costs that would be incurred in disposing of the asset, by the HUD-published passbook rate. If the PHA can compute actual income from some but not all assets, the PHA must compute actual returns where possible and use the HUD-determined passbook rate for assets where actual income cannot be calculated [24 CFR 5.609(a)(2)].
An asset with an actual return of $0 (such as a non-interest-bearing checking account), is not the same as an asset for which an actual return cannot be computed (such as non-necessary personal property). If the asset is a financial asset and there is no income generated (for example, a bank account with a zero percent interest rate or a stock that does not issue cash dividends), then the asset generates zero actual asset income, and imputed income is not calculated. When a stock issues dividends in some years but not others (e.g., due to market performance), the dividend is counted as the actual return when it is issued, and when no dividend is issued, the actual return is $0. When the stock never issues dividends, the actual return is consistently $0.
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PART III: ADJUSTED INCOME
6B-III.A. OVERVIEW
HUD regulations require PHAs to deduct from annual income any of five mandatory deductions for which a family qualifies and allow the PHA to deduct other permissive deductions in accordance with PHA policy. The resulting amount is the family’s adjusted income. Mandatory deductions are found in 24 CFR 5.611.
5.611 Adjusted income means annual income (as determined under § 5.609) of the members of the family residing or intending to reside in the dwelling unit, after making the following deductions:
(a) Mandatory deductions
(1) $480 for each dependent (adjusted annually by HUD, rounded to the next lowest multiple of $25);
(2) $525 for any elderly family or disabled family (adjusted annually by HUD, rounded to the next lowest multiple of $25);
(3) The sum of the following, to the extent the sum exceeds ten percent of annual income:
(i) Unreimbursed health and medical care 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; and
(4) Any reasonable childcare 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.
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 non-school 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.
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When calculating health and medical care expenses, the PHA will include those expenses anticipated to be incurred during the 12 months following the certification date which are not covered by an outside source, such as insurance. The allowance is not intended to give a family an allowance equal to last year’s expenses, but to anticipate regular ongoing and anticipated expenses during the coming year. Since these expenses are anticipated, the PH Occupancy Guidebook states “it is likely that actual expenses will not match what was anticipated. Typically, this would not be considered an underpayment as long as at the time of the annual reexamination, the expenses were calculated based on the appropriate verification” [New PH OCC GB, Income Determinations, p. 30]. For annual reexaminations, the PHA will use information for the previous 12-month period.
6B-III.B. DEPENDENT DEDUCTION
An allowance of $480 is deducted from annual income for each dependent (which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25) [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)].
6B-III.C. ELDERLY OR DISABLED FAMILY DEDUCTION
A single deduction of $525 is taken for any elderly or disabled family (which amount will be adjusted by HUD annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the next lowest multiple of $25) [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].
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6B-III.D. HEALTH AND MEDICAL CARE EXPENSES DEDUCTION [24 CFR 5.611(A)(3)(I) AND
5.603(B)]
Unreimbursed health and medical care expenses may be deducted to the extent that, in combination with any disability assistance expenses, they exceed ten percent of annual income.
This 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 health and medical care expense deduction, the unreimbursed health and medical care expenses of all family members are included. The PHA calculates health and medical care expenses based on the family’s past expenses, but accounting for any anticipated changes in expenses during the certification period.
Definition of Medical Expenses
HUD regulations define health and medical care expenses at 24 CFR 5.603(b) to mean “any costs incurred in the diagnosis, cure, mitigation, treatment, or prevention of disease or payments for treatments affecting any structure or function of the body. Health and medical care expenses include medical insurance premiums and long-term care premiums that are paid or anticipated during the period for which annual income is computed.” Health and medical care expenses may be deducted from annual income only if they are eligible under this definition and not otherwise reimbursed a.
Although HUD revised the definition of health and medical care expenses to reflect the Internal Revenue Service (IRS) general definition of medical expenses, HUD is not permitting PHAs to specifically align their policies with IRS Publication 502. PHAs must review each expense to determine whether it is eligible in accordance with HUD’s definition.
While PHA policies may not specifically align with IRS Publication 502, HUD recommends PHAs use it as a standard for determining allowable expenses, and the PHA may list examples of allowable expenses in their policy provided they comply with HUD’s definition at 24 CFR 5.603.
The PHA may not define health and medical care expenses more narrowly than the regulation.
PHA Policy
The PHA will use the most current IRS Publication 502 as a standard for determining if expenses claimed by eligible families qualify as health and medical care expenses.
However, under no circumstances will the PHA deduct any expenses listed in IRS Publication 502 that do not conform with HUD’s definition of health and medical care expenses.
Summary of Typical Allowable Health and Medical Care Expenses Services of medical professionals
Surgery and medical procedures that are
necessary, legal, and non-cosmetic
Services of medical facilities
Substance abuse treatment programs
Psychiatric treatment
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Hospitalization, long-term care, and inhome nursing services Prescription medicines and insulin, but
not nonprescription medicines even if
recommended by a doctor
Improvements to housing directly
related to medical needs (e.g., ramps for
a wheelchair, handrails)
Medical insurance premiums or the cost
of a health maintenance organization
(HMO)
Medicare Part B and Part D premiums
Ambulance services and some costs of
transportation related to medical
expenses. The PHA will use the most
current medical mileage rate listed in
IRS Publication 502.
The cost and care of necessary
equipment related to a medical
condition (e.g., eyeglasses/lenses,
hearing aids, crutches, and artificial
teeth)
The costs of buying, training, and
maintaining a guide dog or other
service animal to assist a visually
impaired or hearing disabled person, or
a person with other physical disabilities.
In general, this includes any costs, such
as food, grooming, and veterinary care,
incurred in maintaining the health and
vitality of the service animal so that it
may perform its duties.
Note: This chart provides a summary of eligible health and medical care expenses only. In all cases, the PHA will consider whether health and medical expenses care expenses claimed by the family are eligible under HUD’s definition.
Families That Qualify for Both Health and Medical and Disability Assistance Expenses PHA Policy
This policy applies only to families in which the head, spouse, or cohead is 62 or older or is a person with disabilities.
When expenses anticipated by a family could be defined as either a health and medical or disability assistance expenses, the PHA will consider them health and medical expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work.
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6B-III.E. DISABILITY ASSISTANCE EXPENSES DEDUCTION [24 CFR 5.603(B) AND 24 CFR 5.611(A)(3)(II)]
Unreimbursed reasonable expenses for attendant care and auxiliary apparatus for each member of the family who is a person with disabilities may be deducted if they: (1) are necessary to enable a family member 18 years or older to work, (2) are not paid to a family member or reimbursed by an outside source, (3) in combination with any medical expenses, exceed ten percent of annual income, and (4) do not exceed the earned income received by the family member who is enabled to work.
Earned Income Limit on the Disability Assistance Expense Deduction A family can qualify for the disability assistance expense deduction only if at least one family member (who may be the person with disabilities) is enabled to work [24 CFR 5.603(b)].
The disability expense deduction is capped by the amount of “earned income received by family members who are 18 years of age or older and who are able to work” because of the expense [24 CFR 5.611(a)(3)(ii)]. The earned income used for this purpose is the amount verified before any earned income disallowances or income exclusions are applied.
PHA Policy
The family must identify the family members enabled to work as a result of the disability assistance expenses. In evaluating the family’s request, the PHA will consider factors such as how the work schedule of the relevant family members relates to the hours of care provided, the time required for transportation, the relationship of the family members to the person with disabilities, and any special needs of the person with disabilities that might determine which family members are enabled to work.
When the PHA determines that the disability assistance expenses enable more than one family member to work, the expenses will be capped by the sum of the family members’ incomes.
Eligible Auxiliary Apparatus [Notice PIH 2023-27]
Auxiliary apparatus items may include expenses for wheelchairs, ramps, adaptations to vehicles, guide dogs, assistance animals, or special equipment to enable a person who is blind or has low vision to read or type or special equipment to assist a person who is deaf or hard of hearing.
Eligible Attendant Care [Notice PIH 2023-27]
Examples of attendant care expenses can include teaching a person with disabilities how to perform day-to-day tasks independently like cleaning, bathing, doing laundry, and cooking.
Attendant care can be 24-hour care, or care during sporadic periods throughout the day. The family determines the type of attendant care that is appropriate for the person with disabilities. © Copyright 2024 Nan McKay & Associates, Inc.
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PHA Policy
Attendant care expenses will be included for the period that the person enabled to work is employed plus reasonable transportation time. The cost of general housekeeping and personal services is not an eligible attendant care expense. However, if the person enabled to work is the person with disabilities, personal services necessary to enable the person with disabilities to work are eligible.
If the care attendant also provides other services to the family, the PHA will prorate the cost and allow only that portion of the expenses attributable to attendant care that enables a family member to work. For example, if the care provider also cares for a child who is not the person with disabilities, the cost of care must be prorated. Unless otherwise specified by the care provider, the calculation will be based upon the number of hours spent in each activity and/or the number of persons under care.
Payments to Family Members
No disability assistance expenses may be deducted for payments to a member of an assisted family [24 CFR 5.603(b)]. However, expenses paid to a relative who is not a member of the assisted family may be deducted if they are not reimbursed by an outside source.
Necessary and Reasonable Expenses
The family determines the type of care or auxiliary apparatus to be provided and must describe how the expenses enable a family member to work. The family must certify that the disability assistance expenses are necessary and are not paid or reimbursed by any other source.
PHA Policy
The PHA determines the reasonableness of the expenses based on typical costs of care or apparatus in the locality. To establish typical costs, the PHA will collect information from organizations that provide services and support to persons with disabilities. A family may present, and the PHA will consider, the family’s justification for costs that exceed typical costs in the area.
Families That Qualify for Both Health and Medical and Disability Assistance Expenses PHA Policy
This policy applies only to families in which the head or spouse is 62 or older or is a person with disabilities.
When expenses anticipated by a family could be defined as either health and medical care or disability assistance expenses, the PHA will consider them health and medical care expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work.
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6B-III.F. CHILD CARE EXPENSE DEDUCTION
HUD defines child care expenses at 24 CFR 5.603(b) as “amounts anticipated to be paid by the family for the care of children under 13 years of age (age 12 and younger) (including foster children) during the period for which annual income is computed, but only where such care is necessary to enable a family member to actively seek employment, be gainfully employed, or to further his or her education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for child care. In the case of child care necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income.”
Clarifying the Meaning of Child for This Deduction
Child care expenses do not include child support payments made to another on behalf of a minor who is not living in an assisted family’s household [VG, p. 26]. However, child care expenses for foster children that are living in the assisted family’s household are included when determining the family’s child care expenses [HCV GB, p. 5-29].
Qualifying for the Deduction
Determining Who Is Enabled to Pursue an Eligible Activity PHA Policy
The family must identify the family member(s) enabled to pursue an eligible activity. The term eligible activity in this section means any of the activities that may make the family eligible for a child care deduction (seeking work, pursuing an education, or being gainfully employed).
In evaluating the family’s request, the PHA will consider factors such as how the schedule for the claimed activity relates to the hours of care provided, the time required for transportation, the relationship of the family member(s) to the child, and any special needs of the child that might help determine which family member is enabled to pursue an eligible activity.
Seeking Work
PHA Policy
If the child care expense being claimed is to enable a family member to seek employment, the family must provide evidence of the family member’s efforts to obtain employment at each reexamination on a PHA proof of seeking work form. The deduction may be reduced or denied if the family member’s job search efforts are not commensurate with the child care expense being allowed by the PHA. © Copyright 2024 Nan McKay & Associates, Inc.
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Furthering Education
PHA Policy
If the childcare expense being claimed is to enable a family member to further their education, the member must be enrolled in school (academic or vocational) or participating in a formal training program. The family member is not required to be a full-time student, but the time spent in educational activities must be commensurate with the childcare claimed.
Being Gainfully Employed
PHA Policy
If the childcare expense being claimed is to enable a family member to be gainfully employed, the family must provide evidence of the family member’s employment during the time that child care is being provided. Gainful employment is any legal work activity (full- or part-time) for which a family member is compensated.
Earned Income Limit on Childcare Expense Deduction
When a family member looks for work or furthers their education, there is no cap on the amount that may be deducted for childcare – although the care must still be necessary and reasonable. However, when childcare enables a family member to work, the deduction is capped by “the amount of employment income that is included in annual income” [24 CFR
5.603(b)].
The earned income used for this purpose is the amount of earned income verified after any earned income disallowances or income exclusions are applied.
The PHA must not limit the deduction to the least expensive type of child care. If the care allows the family to pursue more than one eligible activity, including work, the cap is calculated in proportion to the amount of time spent working [HCV GB, p. 5-30].
PHA Policy
When the child care expense being claimed is to enable a family member to work, only one family member’s income will be considered for a given period of time. When more than one family member works during a given period, the PHA generally will limit allowable child care expenses to the earned income of the lowest-paid member. The family may provide information that supports a request to designate another family member as the person enabled to work.
Eligible Childcare Expenses
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The type of care to be provided is determined by the assisted family. The PHA may not refuse to give a family the child care expense deduction because there is an adult family member in the household that may be available to provide child care [VG, p. 26].
Allowable Childcare Activities
PHA Policy
For school-age children, costs attributable to public or private school activities during standard school hours are not considered. Expenses incurred for supervised activities after school or during school holidays (e.g., summer day camp, after-school sports league) are allowable forms of child care.
The costs of general housekeeping and personal services are not eligible. Likewise, child care expenses paid to a family member who lives in the family’s unit are not eligible; however, payments for child care to relatives who do not live in the unit are eligible.
If a child care provider also renders other services to a family or child care is used to enable a family member to conduct activities that are not eligible for consideration, the PHA will prorate the costs and allow only that portion of the expenses that is attributable to child care for eligible activities. Unless otherwise specified by the child care provider, the calculation will be based upon the number of hours spent in each activity and/or the number of persons under care.
Necessary and Reasonable Costs
Child care expenses will be considered necessary if: (1) a family adequately explains how the care enables a family member to work, actively seek employment, or further their education, and (2) the family certifies, and the child care provider verifies, that the expenses are not paid or reimbursed by any other source.
PHA Policy
Child care expenses will be considered for the time required for the eligible activity plus reasonable transportation time. For child care that enables a family member to go to school, the time allowed may include not more than one half study hour for each hour spent in class.
To establish the reasonableness of child care costs, the PHA will obtain local use the schedule of childcare costs and compare them to the rates provided by the family. from a qualified local entity that either subsidizes childcare costs or licenses childcare providers. Families may present, and the PHA will consider, justification for costs that exceed typical costs in the area.
6B-III.G. HARDSHIP EXEMPTIONS [24 CFR 5.611(C), (D), AND (E)] Health and Medical Care and Disability Assistance Expenses [24 CFR 5.611(c); Notice PIH 2023-27]
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The regulations provide for two types of hardship exemption categories for families that qualify for unreimbursed health and medical care expenses and/or disability assistance expenses. A family will benefit from this hardship exemption only if the family has eligible expenses that can be deducted in excess of five percent of annual income. In order to claim unreimbursed health and medical care expenses, the family must have a head, cohead, or spouse that is elderly or a person with a disability. In order to claim unreimbursed reasonable attendant care and auxiliary apparatus expenses, the family must include a person with a disability, and the expenses must enable any member of the family (including the member who is a person with a disability) to be employed.
Families may be eligible for relief under one of two categories; phased-in relief or general relief, as defined below.
Phased-In Relief
The first category is applicable to all families who received a deduction for unreimbursed health and medical care and/or reasonable attendant care or auxiliary apparatus expenses based on their most recent income review prior to January 1, 2024. The family must receive phased-in relief if they are determined to be eligible. These families will begin receiving a 24-month phased-in relief at their next annual or interim reexamination, whichever occurs first, after the date on which the PHA implements phased-in relief.
For these families, the threshold amount is phased-in as follows:
• The family is eligible for a deduction totaling the sum of expenses that exceeds 5 percent of annual income for the first 12 months.
• At the conclusion of 12 months, the family is eligible for a deduction totaling the sum of their expenses that exceed 7.5 percent of annual income for another 12 months. • At the conclusion of 24 months, the standard threshold amount of 10 percent would be used, unless the family qualifies for relief under the general hardship relief category.
When an eligible family’s phased-in relief begins at an interim reexamination, the PHA must process another transaction (either an interim reexamination or non-interim transaction, as applicable) one year later to move to the next phase.
Prior to the end of the 24-month period, the family may request a hardship exemption under the second category as described below. If the family is found eligible under the second category, the hardship exemption under the first category ends, and the family’s hardship is administered in accordance with the requirements listed below. Once a family requests general relief, the family may no longer receive phased-in relief.
PHAs must track the 24-month phase-period for each eligible family, even if a family’s expenses go below the appropriate phase-in percentage, during the first or second 12-month phase-in period. The phase-in must continue for families who move to another public housing unit at the same PHA. When the family is treated as a new admission under a different property/program (e.g., the family moves from public housing to the HCV program), unless the PHA has a written policy to continue the phased-in relief upon admission, the family’s expense deduction will be © Copyright 2024 Nan McKay & Associates, Inc.
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calculated using the 10-percent threshold unless request for general relief is approved by the PHA. When a family moves with continued assistance or ports to a new PHA, the family must continue to receive the phased-in relief. The family must receive the remaining calendar months of the percentage phase-in. The PHA must use the existing phase-in documentation to determine the remaining calendar months and the percentage phase-in.
General Relief
The second category is for families that can demonstrate:
• Their health and medical and/or disability assistance expenses increased (other than the transition to the higher threshold); or
• The family’s financial hardship is a result of a change in circumstances (as defined in PHA policy) that would not otherwise trigger an interim reexamination.
The family may request a hardship exemption under the second category regardless of whether the family previously received the health and medical and/or disability assistance deductions or are currently or were previously receiving relief under the phased-in relief category above. HUD requires that PHAs develop policies defining what constitutes a hardship for purposes of this exemption.
The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period.
PHA Policy
To qualify for a hardship exemption, a family must submit a request in writing. The request must show that the family’s health and medical and/or disability assistance expenses have increased (other than the transition to the higher threshold) and that the family’s financial hardship is a result of a change in circumstances. The PHA defines a change in circumstances as a decrease in income or increase in other expenses that has resulted in the family’s financial hardship but does not, on its own, trigger an interim reexamination in accordance with PHA policies.
Examples of circumstances constituting a financial hardship may include the following situations:
The family is awaiting an eligibility determination for a federal, state, or local assistance program, such as a determination for unemployment compensation or disability benefits;
The family’s income decreased because of a loss of employment, death of a family member, or due to a natural or federal/state declared disaster; or Other circumstances as determined by the PHA.
The family must provide third-party verification of the hardship with the request. If third-party verification is not available, the PHA will document the file with the reason © Copyright 2024 Nan McKay & Associates, Inc.
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and will attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period.
The PHA must promptly notify the family in writing of the change in the determination of adjusted income and the family’s rent resulting from hardship exemptions. The notice must inform the family of when the hardship exemption will begin and expire [24 CFR 5.611(e)(2)].
PHA Policy
The PHA will make a determination of whether the family qualifies for a hardship exemption within 30 calendar days and will notify the family in writing of the result within 10 business days of the determination.
If the PHA denies the hardship exemption request, the PHA notice will also state that if the family does not agree with the PHA determination, the family may request an informal hearing. If the family qualifies for an exemption, the PHA will include the date the hardship exemption will begin and the date it will expire as well as information on how to request a 90-day extension based on family circumstances.
If the family qualifies, the family will receive a deduction for the sum of eligible expenses that exceed five percent of annual income.
The family’s hardship relief ends when the circumstances that made the family eligible for the relief are no longer applicable or after 90 days, whichever is earlier. However, the PHA may, at its discretion, extend the relief for one or more additional 90-day periods while the family’s hardship condition continues. PHAs are not limited to a maximum number of 90-day extensions.
PHAs must establish written policies regarding the types of circumstances that will allow a family to qualify for a financial hardship and when such deductions may be eligible for additional 90-day extensions. PHAs must develop policies requiring families to report if the circumstances that made the family eligible for the hardship exemption are no longer applicable.
PHA Policy
The family may request an extension either orally or in writing prior to the end of the hardship exemption period. The PHA will automatically extend relief for an additional 90-days if the family request an extension from the PHA and the family’s circumstances that resulted in the hardship haven’t changed.
In all other instances, the PHA will extend relief for an additional 90-days if the family demonstrates to the PHA’s satisfaction that the family continues to qualify for the hardship exemption based on circumstances described above. The PHA may require updated verification based on the family’s current circumstances. Additional extension(s) may be granted on a case-by-case basis provided the family continues to request extensions prior to the end of each hardship exemption period. Families must © Copyright 2024 Nan McKay & Associates, Inc.
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report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. At any time, the PHA may terminate the hardship exemption if the PHA determines that the family no longer qualifies for the exemption.
Childcare Expense Hardship Exemption [24 CFR 5.611(d) and Notice PIH 2023-27] A family whose eligibility for the child care expense deduction is ending may request a financial hardship exemption to continue receiving the deduction. If the family demonstrates to the PHA’s satisfaction that the family is unable to pay their rent because of the loss of the child care expense deduction, and that the childcare expense is still necessary even though the family member is not working, looking for work, or seeking to further their education, the PHA must recalculate the family’s adjusted income and continue the childcare deduction.
The PHA must develop a policy to define what constitutes a hardship, which includes the family’s inability to pay rent. The PHA must obtain third-party verification of the hardship or must document in the file the reason third-party verification was not available. PHAs must attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period.
PHA Policy
For a family to qualify for the hardship, they must demonstrate that their inability to pay rent would be a result of the loss of this deduction. The PHA defines this hardship as a potential decrease in income or increase in other expenses that would result from the loss of the child care expense and such loss would impact the family’s ability to pay their rent.
Some factors to consider when determining if the family is unable to pay rent may include determining that the rent, utility payment, and applicable expenses (child care expenses or health and medical expenses) are more than 40 percent of the family’s adjusted income, or verifying whether the family has experienced unanticipated expenses, such as large medical bills, that have affected their ability to pay their rent.
The family must also demonstrate that the child care expense is still necessary even though the family member is no longer employed or furthering their education. The PHA will consider qualification under this criterion on a case-by case basis (for example, if the family member who was employed has left their job in order to provide uncompensated care to an elderly friend or family member who is severely ill and lives across town).
The family must provide third-party verification of the hardship with the request. If third-party verification is not available, the PHA will document the file with the reason and will attempt to obtain third-party verification prior to the end of the 90-day hardship exemption period.
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The PHA must promptly notify the family in writing of the change in the determination of adjusted income and the family’s rent resulting from hardship exemptions.
If the PHA denies the request, the notice must specifically state the reason for the denial. PHAs must provide families 30 days’ notice of any increase in rent.
If the PHA approves the request, the notice must inform the family of when the hardship exemption will begin and expire [24 CFR 5.611(e)(2)]. The notice must also state the requirement for the family to report to the PHA if the circumstances that made the family eligible for relief are no longer applicable and that the family’s adjusted income and tenant rent will be recalculated upon expiration of the hardship exemption [Notice PIH 2023-27].
PHA Policy
The PHA will make a determination of whether the family qualifies within 30 calendar days and will notify the family in writing of the result within 10 business days of the determination.
If the PHA denies the hardship exemption request, the PHA notice will also state that if the family does not agree with the PHA determination, the family may request an informal hearing.
If the family qualifies for an exemption, the PHA will include all required information listed above as well as information on how to request a 90-day extension based on family circumstances.
If the family qualifies, the hardship exemption and the resulting alternative adjusted income calculation must remain in place for a period of up to 90 days.
The PHA may, at its discretion, extend the hardship exemptions for additional 90-day periods based on family circumstances and as stated in PHA policies. PHAs are not limited to a maximum number of 90-day extensions. PHAs must develop policies requiring families to report if the circumstances that made the family eligible for the hardship exemption are no longer applicable.
PHAs must promptly notify families in writing if they are denied either an initial hardship exemption or an additional 90-day extension of the exemption. If the PHA denies the request, the notice must specifically state the reason for the denial.
PHAs must notify the family if the hardship exemption is no longer necessary and the hardship exemption will be terminated because the circumstances that made the family eligible for the exemption are no longer applicable. The notice must state the termination date and provide 30 days’ notice of rent increase, if applicable.
PHA Policy
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The family may request an extension either orally or in writing prior to the end of the hardship exemption period. The PHA will automatically extend relief for an additional 90-days if the family request an extension from the PHA and the family’s circumstances that resulted in the hardship haven’t changed.
In all other instances, the PHA will extend relief for an additional 90-days if the family demonstrates to the PHA’s satisfaction that the family continues to qualify for the hardship exemption. The PHA may require updated verification based on the family’s current circumstances. Additional extension may be granted on a case-by-case basis provided the family continues to request extensions prior to the end of each hardship exemption period. Families must report if the circumstances that made the family eligible for the hardship exemption are no longer applicable. At any time, the PHA may terminate the hardship exemption if the PHA determines that the family no longer qualifies for the exemption.
6B-III.H. PERMISSIVE DEDUCTIONS [24 CFR 5.611(B)(1)(II)] The PHA may adopt additional permissive deductions from annual income if they establish a policy in the administrative plan. Permissive deductions are additional, optional deductions that may be applied to annual income. As with mandatory deductions, permissive deductions must be based on need or family circumstance and deductions must be designed to encourage selfsufficiency or other economic purpose. If the PHA offers permissive deductions, they must be granted to all families that qualify for them and should complement existing income exclusions and deductions [PH Occ GB, p. 128]. Permissive deductions may be used to incentivize or encourage self-sufficiency and economic mobility.
A PHA that adopts such deductions must have sufficient funding to cover the increased housing assistance payment cost of the deductions. A PHA will not be eligible for an increase in HCV renewal funding for subsidy costs resulting from such deductions.
PHA Policy
The PHA has opted not to use permissive deductions.
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PART IV: CALCULATING FAMILY SHARE AND PHA SUBSIDY
6B-IV.A. OVERVIEW OF RENT AND SUBSIDY CALCULATIONS
TTP Formula [24 CFR 5.628]
HUD regulations specify the formula for calculating the total tenant payment (TTP) for an assisted family. TTP is the highest of the following amounts, rounded to the nearest dollar:
• 30 percent of the family’s monthly adjusted income (adjusted income is defined in Part II) • 10 percent of the family’s monthly gross income (annual income, as defined in Part I, divided by 12)
• The welfare rent (in as-paid states only)
• A minimum rent between $0 and $50 that is established by the PHA The PHA has authority to suspend and exempt families from minimum rent when a financial hardship exists, as defined in section 6-IV.B.
The amount that a family pays for rent and utilities (the family share) will never be less than the family’s TTP but may be greater than the TTP depending on the rent charged for the unit the family selects.
Welfare Rent [24 CFR 5.628]
PHA Policy
Welfare rent does not apply in this locality.
Minimum Rent [24 CFR 5.630]
PHA Policy
The minimum rent for this locality is $50.00.
Family Share [24 CFR 982.305(a)(5)]
If a family chooses a unit with a gross rent (rent to owner plus an allowance for tenant-paid utilities) that exceeds the PHA’s applicable payment standard: (1) the family will pay more than the TTP, and (2) at initial occupancy the PHA may not approve the tenancy if it would require the family share to exceed 40 percent of the family’s monthly adjusted income. (For a discussion of the application of payment standards, see section 6-IV.C.) PHA Subsidy [24 CFR 982.505(b)]
The PHA will pay a monthly housing assistance payment (HAP) for a family that is equal to the lower of (1) the applicable payment standard for the family minus the family’s TTP or (2) the gross rent for the family’s unit minus the TTP. (For a discussion of the application of payment standards, see section 6-IV.C.)
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Utility Reimbursement [24 CFR 982.514(b); 982.514(c)]
When the PHA subsidy for a family exceeds the rent to owner, the family is due a utility reimbursement. HUD permits the PHA to pay the reimbursement to the family or directly to the utility provider.
PHA Policy
The PHA will make utility reimbursements to the family.
The PHA may make all utility reimbursement payments to qualifying families on a monthly basis or may make quarterly payments when the monthly reimbursement amount is $15.00 or less.
Reimbursements must be made once per calendar-year quarter and must be prorated if the family leaves the program in advance of its next quarterly reimbursement. The PHA must also adopt hardship policies for families for whom receiving quarterly reimbursement would create a financial hardship.
PHA Policy
The PHA will issue all utility reimbursements monthly. generally make utility reimbursements to the family, but in some instances may elect to directly pay the utility provider.
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6B-IV.B. FINANCIAL HARDSHIPS AFFECTING MINIMUM RENT [24 CFR 5.630] PHA Policy
The financial hardship rules described below does apply in this jurisdiction because the PHA has established a minimum rent of $50.00.
Overview
If the PHA establishes a minimum rent greater than zero, the PHA must grant an exemption from the minimum rent if a family is unable to pay the minimum rent because of financial hardship.
The financial hardship exemption applies only to families required to pay the minimum rent. If a family’s TTP is higher than the minimum rent, the family is not eligible for a hardship exemption. If the PHA determines that a hardship exists, the family share is the highest of the remaining components of the family’s calculated TTP.
HUD-Defined Financial Hardship
Financial hardship includes the following situations:
(1) The family has lost eligibility for or is awaiting an eligibility determination for a federal, state, or local assistance program. This includes a family member who is a noncitizen lawfully admitted for permanent residence under the Immigration and Nationality Act who would be entitled to public benefits but for Title IV of the Personal Responsibility and Work Opportunity Act of 1996.
PHA Policy
A hardship will be considered to exist only if the loss of eligibility has an impact on the family’s ability to pay the minimum rent.
For a family waiting for a determination of eligibility, the hardship period will end as of the first of the month following: (1) implementation of assistance, if approved, or (2) the decision to deny assistance. A family whose request for assistance is denied may request a hardship exemption based upon one of the other allowable hardship circumstances. (2) The family would be evicted because it is unable to pay the minimum rent.
PHA Policy
For a family to qualify under this provision, the cause of the potential eviction must be the family’s failure to pay rent to the owner or tenant-paid utilities. (3) Family income has decreased because of changed family circumstances, including the loss of employment.
(4) A death has occurred in the family.
PHA Policy
In order to qualify under this provision, a family must describe how the death has © Copyright 2024 Nan McKay & Associates, Inc.
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created a financial hardship (e.g., because of funeral-related expenses or the loss of the family member’s income).
(5) The family has experienced other circumstances determined by the PHA.
PHA Policy
The PHA has not established any additional hardship criteria.
Implementation of Hardship Exemption
Determination of Hardship
When a family requests a financial hardship exemption, the PHA must suspend the minimum rent requirement beginning the first of the month following the family’s request.
The PHA then determines whether the financial hardship exists and whether the hardship is temporary or long-term.
PHA Policy
The PHA defines temporary hardship as a hardship expected to last 90 days or less.
Long-term hardship is defined as a hardship expected to last more than 90 days.
When the minimum rent is suspended, the family share reverts to the highest of the remaining components of the calculated TTP. The example below demonstrates the effect of the minimum rent exemption.
Example: Impact of Minimum Rent Exemption
Assume the PHA has established a minimum rent of $50.
Family Share – No Hardship Family Share – With Hardship $0
$15
N/A
$50
30% of monthly adjusted income
10% of monthly gross income
Welfare rent
Minimum rent
$0
$15
N/A
$50
30% of monthly adjusted income
10% of monthly gross income
Welfare rent
Minimum rent
Minimum rent applies.
TTP = $50
Hardship exemption granted.
TTP = $15
PHA Policy
To qualify for a hardship exemption, a family must submit a request for a hardship exemption in writing. The request must explain the nature of the hardship and how the hardship has affected the family’s ability to pay the minimum rent. For LEP participants, the PHA will provide appropriate language assistance in submitting this written request, in accordance with the PHA’s LEP Plan.
The PHA will make the determination of hardship within 30 calendar days. © Copyright 2024 Nan McKay & Associates, Inc.
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No Financial Hardship
If the PHA determines there is no financial hardship, the PHA will reinstate the minimum rent and require the family to repay the amounts suspended.
PHA Policy
The PHA will require the family to repay the suspended amount within 30 calendar days of the PHA’s notice that a hardship exemption has not been granted.
Temporary Hardship
If the PHA determines that a qualifying financial hardship is temporary, the PHA must suspend the minimum rent for the 90-day period beginning the first of the month following the date of the family’s request for a hardship exemption.
At the end of the 90-day suspension period, the family must resume payment of the minimum rent and must repay the PHA the amounts suspended. HUD requires the PHA to offer a reasonable repayment agreement, on terms and conditions established by the PHA. The PHA also may determine that circumstances have changed and the hardship is now a long-term hardship.
PHA Policy
The PHA will enter into a repayment agreement in accordance with the procedures found in Chapter 16 of this plan.
Long-Term Hardship
If the PHA determines that the financial hardship is long-term, the PHA must exempt the family from the minimum rent requirement for so long as the hardship continues. The exemption will apply from the first of the month following the family’s request until the end of the qualifying hardship. When the financial hardship has been determined to be long-term, the family is not required to repay the minimum rent.
PHA Policy
The hardship period ends when any of the following circumstances apply:
(1) At an interim or annual reexamination, the family’s calculated TTP is greater than the minimum rent.
(2) For hardship conditions based on loss of income, the hardship condition will continue to be recognized until new sources of income are received that are at least equal to the amount lost. For example, if a hardship is approved because a family no longer receives a $60/month child support payment, the hardship will continue to exist until the family receives at least $60/month in income from another source or once again begins to receive the child support.
(3) For hardship conditions based upon hardship-related expenses, the minimum rent exemption will continue to be recognized until the cumulative amount exempted is equal to the expense incurred.
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6B-IV.C. APPLYING PAYMENT STANDARDS [24 CFR 982.505; 982.503(C) AND NOTICE PIH 2024- 34]
Overview
The PHA’s schedule of payment standards is used to calculate housing assistance payments for HCV families. This section covers the application of the PHA’s payment standards. The establishment and revision of the PHA’s payment standard schedule are covered in Chapter 16.
Payment standard is defined as “the maximum monthly assistance payment for a family assisted in the voucher program (before deducting the total tenant payment by the family)” [24 CFR 982.4(b)].
The payment standard for a family is the lower of (1) the payment standard for the family unit size, which is defined as the appropriate number of bedrooms for the family under the PHA’s subsidy standards [24 CFR 982.4(b)], or (2) the payment standard for the size of the dwelling unit rented by the family.
If the PHA has established an exception payment standard for a designated part of a FMR area in accordance with 24 CFR 982.503 and a family’s unit is located in the designated area, the PHA must use the appropriate payment standard for the exception area [24 CFR 982.505 (c)(2)].
The PHA is required to pay a monthly housing assistance payment (HAP) for a family that is the lower of (1) the payment standard for the family minus the family’s TTP or (2) the gross rent for the family’s unit minus the TTP.
If during the term of the HAP contract for a family’s unit, the owner lowers the rent, the PHA will recalculate the HAP using the lower of the initial payment standard or the gross rent for the unit [HCV GB, p. 7-8].
Changes in Payment Standards
When the PHA revises its payment standards during the term of the HAP contract for a family’s unit, it will apply the new payment standards in accordance with HUD regulations. Regulations governing increases and decreases in the payment standard have changed, with a required compliance date of December 3, 2024.
Decreases [24 CFR 982.505(c)(3) and Notice PIH 2024-34] For new HAP contracts, the PHA applies the payment standard in effect at the time of HAP contract execution.
The PHA must administer decreases in the payment standard amount for the family in accordance with the PHA policy as described in the administrative plan and apply the policy consistently to all families.
If a PHA changes its payment standard schedule, resulting in a lower payment standard amount, during the term of a HAP contract, the PHA is not required to reduce the payment standard used to calculate subsidy for families under HAP contract as long as the HAP contract © Copyright 2024 Nan McKay & Associates, Inc.
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remains in effect The PHA must administer decreases in the payment standard amount for the family in accordance with the PHA policy as described in the administrative plan.
Changes effective 12/2/24 and earlier: if the PHA does choose to reduce the payment standard for families currently under HAP contract, the initial reduction to the payment standard may not be applied any earlier than the effective date of the family’s second regular reexamination following the effective date of the decrease in the payment standard amount.
Changes effective 12/3/24 and later: If the PHA does choose to reduce the payment standard for families currently under HAP contract, the initial reduction to the payment standard may not be applied any earlier than two years following the effective date of the decrease in the payment standard and only with proper written notice to the family in accordance with 24 CFR 982.505(c)(3)(iii).
At that point, the PHA may either reduce the payment standard to the current amount in effect on the PHA’s payment standard schedule, or may reduce the payment standard to another amount that is higher than the normally applicable amount on the schedule. The PHA may also establish different policies for designated areas within their jurisdiction (e.g., different zip code areas).
In any case, the PHA must provide the family with at least 12 months’ notice that the payment standard is being reduced before the effective date of the change. In the written notice, the PHA must state the new payment standard amount, explain that the family’s new payment standard amount will be the greater of the amount listed in the current written notice or the new amount (if any) on the PHA’s payment standard schedule at the end of the 12-month period, and make clear where the family will find the PHA’s payment standard schedule. The PHA’s policy on decreases in the payment standard during the term of the HAP contract apply to all families under HAP contract at the time of the effective date of the decrease in the payment standard within the designated area.
PHA Policy
If the PHA changes its payment standard schedule to a lower amount during the term of a HAP contract, it will not reduce the payment standard used to calculate subsidy for families under the contract, unless budget constraints require a reduction in the number of vouchers issued.
Increases [24 CFR 982.505(c)(4) and Notice PIH 2024-34] For new HAP contracts, the PHA applies the payment standard in effect at the time of HAP contract execution.
Changes effective 12/2/24 and earlier: If the payment standard is increased during the term of the HAP contract, the increased payment standard will be used to calculate the monthly housing assistance payment for the family beginning on the effective date of the family’s first regular reexamination on or after the effective date of the increase in the payment standard. © Copyright 2024 Nan McKay & Associates, Inc.
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Families requiring or requesting interim reexaminations will not have their HAP payments calculated using the higher payment standard until their next annual reexamination [HCV GB, p. 7-8].
Changes effective 12/3/24 and later: If the payment standard is increased during the term of the HAP contract, the increased payment standard will be applied no later than the earliest of:
• The effective date of an increase in the gross rent that would result in an increase in the family share;
• The family’s first regular or interim reexamination; or • One year following the effective date of the increase in the payment standard amount.
The PHA may adopt a policy to apply a payment standard increase at any time earlier than the date calculated above as long as the policy is included in the administrative plan and applied consistently to all families [24 CFR 982.505(c)(5)].
PHA Policy
The PHA will not adopt payment standard increases earlier than the date required by the regulations.
Changes in Family Unit Size (Voucher Size) [24 CFR 982.505(c)(6) and Notice PIH 2024-34] Changes effective 12/3/24 and later: Irrespective of any increase or decrease in the payment standard, if the family unit size increases or decreases during the HAP contract term, the new family unit size must be used to determine the payment standard for the family beginning at the family’s first regular reexamination following the change in family unit size.
Changes effective 12/3/24 and later: Irrespective of any increase or decrease in the payment standard, if the family unit size increases or decreases during the HAP contract term, the new family unit size may be used to determine the payment standard immediately but no later than the family’s first regular reexamination following the change in family unit size.
PHA Policy
If the family unit size (voucher size) changes during the term of a HAP contract, the new family unit size will be used to determine the payment standard at the family’s first regular reexamination following the change in family unit size.
Moves
If the family moves to a new unit, or a new HAP contract is executed due to changes in the lease (even if the family remains in place) the current payment standard applicable to the family will be used when the new HAP contract is processed.
Reasonable Accommodation [24 CFR 982.503(d)(5)]
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If a family requires a higher payment standard as a reasonable accommodation for a family member who is a person with disabilities, the PHA is allowed to establish a higher payment standard for the family of not more than 120 percent of the published FMR without HUD approval or prior notification to HUD. A PHA may establish a payment standard greater than 120 percent of the applicable FMR as a reasonable accommodation in accordance with 24 CFR part 8, after requesting and receiving HUD approval. See Chapter 16 for more information. © Copyright 2024 Nan McKay & Associates, Inc.
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6B-IV.D. APPLYING UTILITY ALLOWANCES [24 CFR 982.517]
Overview
A PHA-established utility allowance schedule is used in determining family share and PHA subsidy. A family's utility allowance is determined by the size of dwelling unit leased by a family or the voucher unit size for which the family qualifies using PHA subsidy standards, whichever is the lowest of the two. See Chapter 5 for information on the PHA’s subsidy standards.
For policies on establishing and updating utility allowances, see Chapter 16.
Flat Fees [24 CFR 982.517(b)(2)(iii)]
The PHA may base its utility allowance payments on actual flat fees charged by an owner for utilities that are billed directly by the owner, but only if the flat fee charged by the owner is no greater than the PHA’s applicable utility allowance for the utilities covered by the fee. If the owner charges a flat fee for some but not all utilities, the PHA must pay a separate allowance for any tenant-paid utilities not covered in the flat fee.
PHA Policy
The PHA will not base utility allowance payments on flat fees charged by the owner.
PBV Developments [24 CFR 982.517(b)(2)(iv)]
If a tenant-based voucher holder resides in a project with project-based voucher (PBV) units and the PBV units use a site-specific utility allowance in accordance with PBV regulations, the PHA must use the project-specific utility allowance schedule.
Reasonable Accommodation and Individual Relief
On request from a family that includes a person with disabilities, the PHA must approve a utility allowance which is higher than the applicable amount on the utility allowance schedule if a higher utility allowance is needed as a reasonable accommodation to make the program accessible and usable by the family member with a disability [24 CFR 982.517(e)]. (See Chapter 2 for policies regarding the request and approval of reasonable accommodations.) Further, the PHA may grant requests for individual relief from charges in excess of the utility allowance on reasonable grounds, such as special factors not within control of the resident, as the PHA deems appropriate. The family must request the higher allowance and provide the PHA an explanation of the need for individual relief and an explanation about the amount of additional allowance required [see HCV GB, p. 18-8].
PHAs should develop criteria for granting individual relief, notify residents about the availability of individual relief, and notify participants about the availability of individual relief programs (sometimes referred to as “Medical Baseline discounts”) offered by the local utility company.
PHA Policy
The family must request the higher allowance and provide the PHA with information about the amount of additional allowance required.
The PHA will consider the following criteria as valid reasons for granting individual relief:
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The family’s consumption was mistakenly portrayed as excessive due to defects in the meter or errors in the meter reading.
The excessive consumption is caused by a characteristic of the unit or ownersupplied equipment that is beyond the family’s control, such as a particularly inefficient refrigerator or inadequate insulation. The allowance should be adjusted to reflect the higher consumption needs associated with the unit until the situation is remedied. The resident should be granted individual relief until the allowance is adjusted.
The excessive consumption is due to special needs of the family that are beyond their control, such as the need for specialized equipment in the case of a family member who is ill, elderly, or who has a disability.
In determining the amount of the reasonable accommodation or individual relief, the PHA will allow a reasonable measure of additional usage as necessary. To arrive at the amount of additional utility cost of specific equipment, the family may provide information from the manufacturer of the equipment, or the family or PHA may conduct an internet search for an estimate of usage or additional monthly cost.
Information on reasonable accommodation and individual relief for charges in excess of the utility allowance will be provided to all families at admission as part of the information on payment standards and utility allowances in the briefing packet. The PHA will also provide information on utility relief programs or medical discounts (sometimes referred to as “Medical Baseline discounts”) that may be available through local utility providers.
At its discretion, the PHA may reevaluate the need for the increased utility allowance at any regular reexamination.
If the excessive consumption is caused by a characteristic of the unit or PHA-supplied equipment that is beyond the family’s control, such as a particularly inefficient refrigerator or inadequate insulation, the individual relief to the resident will cease when the situation is remedied.
Utility Allowance Revisions
At reexamination, the PHA must use the current utility allowance schedule [HCV GB, p. 18-8].
PHA Policy
Revised utility allowances will be applied to a family’s rent and subsidy calculations at the first annual reexamination that is effective after the allowance is adopted. 6B-IV.E. PRORATED ASSISTANCE FOR MIXED FAMILIES [24 CFR 5.520] HUD regulations prohibit assistance to ineligible family members. A mixed family is one that includes at least one U.S. citizen or eligible immigrant and any number of ineligible family members. The PHA must prorate the assistance provided to a mixed family. The PHA will first © Copyright 2024 Nan McKay & Associates, Inc.
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determine assistance as if all family members were eligible and then prorate the assistance based upon the percentage of family members that actually are eligible. For example, if the PHA subsidy for a family is calculated at $500 and two of four family members are ineligible, the PHA subsidy would be reduced to $250.
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EXHIBIT 6B-1: ANNUAL INCOME FULL DEFINITION
24 CFR 5.609
(a) Annual income includes, with respect to
the family:
(1) All amounts, not specifically excluded in
paragraph (b) of this section, received from all
sources by each member of the family who is
18 years of age or older or is the head of
household or spouse of the head of
household, plus unearned income by or on
behalf of each dependent who is under 18
years of age, and
(2) When the value of net family assets
exceeds the HUD-published threshold amount
(which amount HUD will adjust annually in
accordance with the Consumer Price Index for
Urban Wage Earners and Clerical Workers)
and the actual returns from a given asset
cannot be calculated, imputed returns on the
asset based on the current passbook savings
rate, as determined by HUD.
(b)Annual income does not include the following:
(1) Any imputed return on an asset when net
family assets total the HUD-published
threshold amount or less (which amount HUD
will adjust annually in accordance with the
Consumer Price Index for Urban Wage Earners
and Clerical Workers) and no actual income
from the net family assets can be determined.
(2) The following types of trust distributions:
(i) For an irrevocable trust or a revocable trust
outside the control of the family or household
excluded from the definition of net family
assets under § 5.603(b):
(A) Distributions of the principal or corpus of
the trust; and
(B) Distributions of income from the trust
when the distributions are used to pay the
costs of health and medical care expenses for
a minor.
(ii) For a revocable trust under the control of
the family or household, any distributions
from the trust; except that any actual income
earned by the trust, regardless of whether it is
distributed, shall be considered income to the
family at the time it is received by the trust.
(3) Earned income of children under the 18
years of age.
(4) Payments received for the care of foster
children or foster adults, or State or Tribal
kinship or guardianship care payments.
(5) Insurance payments and settlements for
personal or property losses, including but not
limited to payments through health insurance,
motor vehicle insurance, and workers’
compensation.
(6) Amounts received by the family that are
specifically for, or in reimbursement of, the
cost of health and medical care expenses for
any family member.
(7) Any amounts recovered in any civil action
or settlement based on a claim of malpractice,
negligence, or other breach of duty owed to a
family member arising out of law, that
resulted in a member of the family becoming
disabled.
(8) Income of a live-in aide, foster child, or
foster adult as defined in §§ 5.403 and 5.603,
respectively.
(9)
(i) Any assistance that section 479B of the
Higher Education Act of 1965, as amended (20
U.S.C. 1087uu), requires be excluded from a
family’s income; and
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(ii) Student financial assistance for tuition,
books, and supplies (including supplies and
equipment to support students with learning
disabilities or other disabilities), room and
board, and other fees required and charged to
a student by an institution of higher education
(as defined under Section 102 of the Higher
Education Act of 1965 (20 U.S.C. 1002)) and,
for a student who is not the head of
household or spouse, the reasonable and
actual costs of housing while attending the
institution of higher education and not
residing in an assisted unit.
(A) Student financial assistance, for purposes
of this paragraph (9)(ii), means a grant or
scholarship received from— (
1) The Federal government;
(2) A State, Tribe, or local government;
(3) A private foundation registered as a
nonprofit under 26 U.S.C. 501(c)(3);
(4) A business entity (such as corporation,
general partnership, limited liability company,
limited partnership, joint venture, business
trust, public benefit corporation, or nonprofit
entity); or
(5) An institution of higher education.
(B) Student financial assistance, for purposes
of this paragraph (9)(ii), does not include—
(1) Any assistance that is excluded pursuant to
paragraph (b)(9)(i) of this section;
(2) Financial support provided to the student
in the form of a fee for services performed
(e.g., a work study or teaching fellowship that
is not excluded pursuant to paragraph (b)(9)(i)
of this section); (
3) Gifts, including gifts from family or friends;
or
(4) Any amount of the scholarship or grant
that, either by itself or in combination with
assistance excluded under this paragraph or
paragraph (b)(9)(i), exceeds the actual
covered costs of the student. The actual
covered costs of the student are the actual
costs of tuition, books and supplies (including
supplies and equipment to support students
with learning disabilities or other disabilities),
room and board, or other fees required and
charged to a student by the education
institution, and, for a student who is not the
head of household or spouse, the reasonable
and actual costs of housing while attending
the institution of higher education and not
residing in an assisted unit. This calculation is
described further in paragraph (b)(9)(ii)€ of
this section.
(C) Student financial assistance, for purposes
of this paragraph (b)(9)(ii) must be:
(1) Expressly for tuition, books, room and
board, or other fees required and charged to
a student by the education institution;
(2) Expressly to assist a student with the costs
of higher education; or
(3) Expressly to assist a student who is not the
head of household or spouse with the
reasonable and actual costs of housing while
attending the education institution and not
residing in an assisted unit.
(D) Student financial assistance, for purposes
of this paragraph (b)(9)(ii), may be paid
directly to the student or to the educational
institution on the student’s behalf. Student
financial assistance paid to the student must
be verified by the responsible entity as
student financial assistance consistent with
this paragraph (b)(9)(ii).
(E) When the student is also receiving
assistance excluded under paragraph (b)(9)(i)
of this section, the amount of student
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financial assistance under this paragraph
(b)(9)(ii) is determined as follows:
(1) If the amount of assistance excluded under
paragraph (b)(9)(i) of this section is equal to
or exceeds the actual covered costs under
paragraph (b)(9)(ii)(B)(4) of this section, none
of the assistance described in this paragraph
(b)(9)(ii) of this section is considered student
financial assistance excluded from income
under this paragraph (b)(9)(ii)(E).
(2) If the amount of assistance excluded under
paragraph (b)(9)(i) of this section is less than
the actual covered costs under paragraph
(b)(9)(ii)(B)(4) of this section, the amount of
assistance described in paragraph (b)(9)(ii) of
this section that is considered student
financial assistance excluded under this
paragraph is the lower of:
(i) the total amount of student financial
assistance received under this paragraph
(b)(9)(ii) of this section, or
(ii) the amount by which the actual covered
costs under paragraph (b)(9)(ii)(B)(4) of this
section exceeds the assistance excluded
under paragraph (b)(9)(i) of this section.
(10) Income and distributions from any
Coverdell education savings account under
section 530 of the Internal Revenue Code of
1986 or any qualified tuition program under
section 529 of such Code; and income earned
by government contributions to, and
distributions from, “baby bond” accounts
created, authorized, or funded by Federal,
State, or local government.
(11) The special pay to a family member
serving in the Armed Forces who is exposed to
hostile fire.
(12)
(i) 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);
(ii) Amounts received by a participant in other
publicly assisted programs which are
specifically for or in reimbursement of out-ofpocket expenses incurred (e.g., special equipment, clothing, transportation, child
care, etc.) and which are made solely to allow
participation in a specific program;
(iii) Amounts received under a resident service
stipend not to exceed $200 per month. A
resident service stipend is a modest amount
received by a resident for performing a
service for the PHA or owner, on a part-time
basis, that enhances the quality of life in the
development.
(iv) Incremental earnings and benefits
resulting to any family member from
participation in training programs funded by
HUD or in qualifying Federal, State, Tribal, or
local employment training programs
(including training programs not affiliated
with a local government) and training of a
family member as resident management staff.
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 employment training
program unless those amounts are excluded
under paragraph (b)(9)(i) of this section.
(13) 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.
(14) Earned income of dependent fulltime
students in excess of the amount of the
deduction for a dependent in § 5.611.
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(15) Adoption assistance payments for a child
in excess of the amount of the deduction for a
dependent in § 5.611.
(16) Deferred periodic amounts from
Supplemental Security Income and Social
Security benefits that are received in a lump
sum amount or in prospective monthly
amounts, or any deferred Department of
Veterans Affairs disability benefits that are
received in a lump sum amount or in
prospective monthly amounts.
(17) Payments related to aid and attendance
under 38 U.S.C. 1521 to veterans in need of
regular aid and attendance.
(18) Amounts received by the family in the
form of refunds or rebates under State or
local law for property taxes paid on the
dwelling unit.
(19) Payments made by or authorized by a
State Medicaid agency (including through a
managed care entity) or other State or
Federal agency to a family to enable a family
member who has a disability to reside in the
family’s assisted unit. Authorized payments
may include payments to a member of the
assisted family through the State Medicaid
agency (including through a managed care
entity) or other State or Federal agency for
caregiving services the family member
provides to enable a family member who has
a disability to reside in the family’s assisted
unit.
(20) Loan proceeds (the net amount disbursed
by a lender to or on behalf of a borrower,
under the terms of a loan agreement)
received by the family or a third party (e.g.,
proceeds received by the family from a
private loan to enable attendance at an
educational institution or to finance the
purchase of a car).
(21) Payments received by Tribal members as
a result of claims relating to the
mismanagement of assets held in trust by the
United States, to the extent such payments
are also excluded from gross income under
the Internal Revenue Code or other Federal
law.
(22) Amounts that HUD is required by Federal
statute to exclude from consideration as
income for purposes of determining eligibility
or benefits under a category of assistance
programs that includes assistance under any
program to which the exclusions set forth in
paragraph (b) of this section apply. HUD will
publish a notice in the Federal Register to
identify the benefits that qualify for this
exclusion. Updates will be published when
necessary.
(23) Replacement housing “gap” payments
made in accordance with 49 CFR part 24 that
offset increased out of pocket costs of
displaced persons that move from one
federally subsidized housing unit to another
Federally subsidized housing unit. Such
replacement housing “gap” payments are not
excluded from annual income if the increased
cost of rent and utilities is subsequently
reduced or eliminated, and the displaced
person retains or continues to receive the
replacement housing “gap” payments.
(24) Nonrecurring income, which is income
that will not be repeated in the coming year
based on information provided by the family.
Income received as an independent
contractor, day laborer, or seasonal worker is
not excluded from income under this
paragraph, even if the source, date, or
amount of the income varies. Nonrecurring
income includes:
(i) Payments from the U.S. Census Bureau for
employment (relating to decennial census or
the American Community Survey) lasting no
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longer than 180 days and not culminating in
permanent employment.
(ii) Direct Federal or State payments intended
for economic stimulus or recovery.
(iii) Amounts directly received by the family as
a result of State refundable tax credits or
State tax refunds at the time they are
received.
(iv) Amounts directly received by the family as
a result of Federal refundable tax credits and
Federal tax refunds at the time they are
received.
(v) Gifts for holidays, birthdays, or other
significant life events or milestones (e.g.,
wedding gifts, baby showers, anniversaries).
(vi) Non-monetary, in-kind donations, such as
food, clothing, or toiletries, received from a
food bank or similar organization.
(vii) Lump-sum additions to net family assets,
including but not limited to lottery or other
contest winnings.
(25) Civil rights settlements or judgments,
including settlements or judgments for back
pay.
(26) Income received from any account under
a retirement plan recognized as such by the
Internal Revenue Service, including individual
retirement arrangements (IRAs), employer
retirement plans, and retirement plans for
self-employed individuals; except that any
distribution of periodic payments from such
accounts shall be income at the time they are
received by the family.
(27) Income earned on amounts placed in a
family’s Family Self Sufficiency Account.
(28) Gross income a family member receives
through self-employment or operation of a
business; except that the following shall be
considered income to a family member:
(i) 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; and
(ii) 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.
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EXHIBIT 6B-2: TREATMENT OF FAMILY ASSETS
24 CFR 5.603(b) Net Family Assets
(1) Net family assets is the net cash value of
all assets owned by the family, after
deducting reasonable costs that would be
incurred in disposing real property, savings,
stocks, bonds, and other forms of capital
investment.
(2) In determining net family assets, PHAs
or owners, as applicable, must include the
value of any business or family assets
disposed of by an applicant or tenant for
less than fair market value (including a
disposition in trust, but not in a foreclosure
or bankruptcy sale) during the two years
preceding the date of application for the
program or reexamination, as applicable, in
excess of the consideration received
therefor. In the case of a disposition as part
of a separation or divorce settlement, the
disposition will not be considered to be for
less than fair market value if the applicant
or tenant receives consideration not
measurable in dollar terms. Negative equity
in real property or other investments does
not prohibit the owner from selling the
property or other investments, so negative
equity alone would not justify excluding the
property or other investments from family
assets.
(3) Excluded from the calculation of net
family assets are: (i) The value of necessary
items of personal property; (ii) The
combined value of all nonnecessary items
of personal property if the combined total
value does not exceed the HUD-published
threshold amount (which amount will be
adjusted by HUD in accordance with the
Consumer Price Index for Urban Wage
Earners and Clerical Workers); (iii) The value
of any account under a retirement plan
recognized as such by the Internal Revenue
Service, including individual retirement
arrangements (IRAs), employer retirement
plans, and retirement plans for selfemployed individuals; (iv) The value of real property that the family does not have the
effective legal authority to sell in the
jurisdiction in which the property is located;
(v) Any amounts recovered in any civil
action or settlement based on a claim of
malpractice, negligence, or other breach of
duty owed to a family member arising out
of law, that resulted in a family member
being a person with a disability; (vi) The
value of any Coverdell education savings
account under section 530 of the Internal
Revenue Code of 1986, the value of any
qualified tuition program under section 529
of such Code, the value of any Achieving a
Better Life Experience (ABLE) account
authorized under Section 529A of such
Code, and the value of any “baby bond”
account created, authorized, or funded by
Federal, State, or local government. (vii)
Interests in Indian trust land; (viii) Equity in
a manufactured home where the family
receives assistance under 24 CFR part 982;
(ix) Equity in property under the
Homeownership Option for which a family
receives assistance under 24 CFR part 982;
(x) Family Self-Sufficiency Accounts; and (xi)
Federal tax refunds or refundable tax
credits for a period of 12 months after
receipt by the family.
(4) In cases where a trust fund has been
established and the trust is not revocable
by, or under the control of, any member of
the family or household, the trust fund is
not a family asset and the value of the trust
is not included in the calculation of net
family assets, so long as the fund continues
to be held in a trust that is not revocable by,
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or under the control of, any member of the
family or household.
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EXHIBIT 6-3: THE EFFECT OF WELFARE BENEFIT REDUCTION
24 CFR 5.615
Public housing program and Section 8 tenant-based assistance program: How welfare benefit reduction affects family income.
(a) Applicability. This section applies to
covered families who reside in public housing
(part 960 of this title) or receive Section 8
tenant-based assistance (part 982 of this
title).
(b) Definitions. The following definitions apply
for purposes of this section:
Covered families. Families 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 selfsufficiency program as a condition for such assistance.
Economic self-sufficiency program. See
definition at Sec. 5.603.
Imputed welfare income. The amount of
annual income not actually received by a
family, as a result of a specified welfare
benefit reduction, that is nonetheless
included in the family's annual income for
purposes of determining rent.
Specified welfare benefit reduction.
(1) A reduction of welfare benefits by the
welfare agency, in whole or in part, for a
family member, as determined by the welfare
agency, because of fraud by a family member
in connection with the welfare program; or
because of welfare agency sanction against a
family member for noncompliance with a
welfare agency requirement to participate in
an economic self-sufficiency program.
(2) “Specified welfare benefit reduction” does
not include a reduction or termination of
welfare benefits by the welfare agency:
(i) at expiration of a lifetime or other time
limit on the payment of welfare benefits;
(ii) because a family member is not able to
obtain employment, even though the family
member has complied with welfare agency
economic self-sufficiency or work activities
requirements; or
(iii) because a family member has not
complied with other welfare agency
requirements.
(c) Imputed welfare income.
(1) A family's annual income includes the
amount of imputed welfare income (because
of a specified welfare benefits reduction, as
specified in notice to the PHA by the welfare
agency), plus the total amount of other
annual income as determined in accordance
with Sec. 5.609.
(2) At the request of the PHA, the welfare
agency will inform the PHA in writing of the
amount and term of any specified welfare
benefit reduction for a family member, and
the reason for such reduction, and will also
inform the PHA of any subsequent changes in
the term or amount of such specified welfare
benefit reduction. The PHA will use this
information to determine the amount of
imputed welfare income for a family.
(3) A family’s annual income includes imputed
welfare income in family annual income, as
determined at the PHA's interim or regular
reexamination of family income and
composition, during the term of the welfare
benefits reduction (as specified in information
provided to the PHA by the welfare agency).
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(4) The amount of the imputed welfare
income is offset by the amount of additional
income a family receives that commences
after the time the sanction was imposed.
When such additional income from other
sources is at least equal to the imputed
(5) The PHA may not include imputed welfare
income in annual income if the family was not
an assisted resident at the time of sanction.
(d) Review of PHA decision.
(1) Public housing. If a public housing tenant
claims that the PHA has not correctly
calculated the amount of imputed welfare
income in accordance with HUD
requirements, and if the PHA denies the
family's request to modify such amount, the
PHA shall give the tenant written notice of
such denial, with a brief explanation of the
basis for the PHA determination of the
amount of imputed welfare income. The PHA
notice shall also state that if the tenant does
not agree with the PHA determination, the
tenant may request a grievance hearing in
accordance with part 966, subpart B of this
title to review the PHA determination. The
tenant is not required to pay an escrow
deposit pursuant to Sec. 966.55(e) for the
portion of tenant rent attributable to the
imputed welfare income in order to obtain a
grievance hearing on the PHA determination.
(2) Section 8 participant. A participant in the
Section 8 tenant-based assistance program
may request an informal hearing, in
accordance with Sec. 982.555 of this title, to
review the PHA determination of the amount
of imputed welfare income that must be
included in the family's annual income in
accordance with this section. If the family
claims that such amount is not correctly
calculated in accordance with HUD
requirements, and if the PHA denies the
family's request to modify such amount, the
PHA shall give the family written notice of
such denial, with a brief explanation of the
basis for the PHA determination of the
amount of imputed welfare income. Such
notice shall also state that if the family does
not agree with the PHA determination, the
family may request an informal hearing on the
determination under the PHA hearing
procedure.
(e) PHA relation with welfare agency.
(1) The PHA must ask welfare agencies to
inform the PHA of any specified welfare
benefits reduction for a family member, the
reason for such reduction, the term of any
such reduction, and any subsequent welfare
agency determination affecting the amount or
term of a specified welfare benefits reduction.
If the welfare agency determines a specified
welfare benefits reduction for a family
member, and gives the PHA written notice of
such reduction, the family's annual incomes
shall include the imputed welfare income
because of the specified welfare benefits
reduction.
(2) The PHA is responsible for determining
the amount of imputed welfare income that is
included in the family's annual income as a
result of a specified welfare benefits
reduction as determined by the welfare
agency, and specified in the notice by the
welfare agency to the PHA. However, the PHA
is not responsible for determining whether a
reduction of welfare benefits by the welfare
agency was correctly determined by the
welfare agency in accordance with welfare
program requirements and procedures, nor
for providing the opportunity for review or
hearing on such welfare agency
determinations.
(3) Such welfare agency determinations are
the responsibility of the welfare agency, and
the family may seek appeal of such
determinations through the welfare agency's
normal due process procedures. The PHA shall
be entitled to rely on the welfare agency
notice to the PHA of the welfare agency's
determination of a specified welfare benefits
reduction.
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Prior to the PHA’s HOTMA compliance date, the PHA will follow policies as outlined in this chapter. Upon the PHA’s HOTMA compliance date, the PHA will follow policies as outlined in Chapter 7.B.
Chapter 7.A.
VERIFICATION
[24 CFR 982.516, 24 CFR 982.551, 24 CFR 5.230, Notice PIH 2018-18]
INTRODUCTION
Prior to the PHA’s HOTMA compliance date, the PHA will follow policies as outlined in this chapter. Upon the PHA’s HOTMA compliance date, the PHA will follow policies as outlined in Chapter 7.B.
The PHA must verify all information that is used to establish the family’s eligibility and level of assistance and is required to obtain written authorization from the family in order to collect the information. Applicants and program participants must cooperate with the verification process as a condition of receiving assistance. The PHA must not pass on the cost of verification to the family.
The PHA will follow the verification guidance provided by HUD in Notice PIH 2018-18 and any subsequent guidance issued by HUD. This chapter summarizes those requirements and provides supplementary PHA policies.
Part I describes the general verification process. Part II provides more detailed requirements related to family information. Part III provides information on income and assets, and Part IV covers mandatory deductions.
Verification policies, rules and procedures will be modified as needed to accommodate persons with disabilities. All information obtained through the verification process will be handled in accordance with the records management policies of the PHA. © Copyright 2024 Nan McKay & Associates, Inc.
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PART I: GENERAL VERIFICATION REQUIREMENTS
7A-I.A. FAMILY CONSENT TO RELEASE OF INFORMATION [24 CFR 982.516; 24 CFR 982.551; 24 CFR 5.230; and Notice PIH 2023-27] [24 CFR 982.516 AND 982.551, 24 CFR 5.230] Consent Forms
The family must supply any information that the PHA or HUD determines is necessary to the administration of the program and must consent to PHA verification of that information [24 CFR 982.551]. All adult family members must sign consent forms as needed to collect information relevant to the family’s eligibility and level of assistance. While PHAs must use form HUD-9886- A, this form does not release all the information necessary to the administration of the program. The PHA must also develop its own release forms to cover all other necessary information.
Form HUD-9886-A [24 CFR 5.230(b)(1), b(2), (c)(4), and (c)(5); and Notice PIH 2023-27] All adult applicants and participants sign form HUD-9886-A, Authorization for Release of Information. All adult family members (and the head and spouse/cohead, regardless of age) are required to sign the Form HUD-9886-A at admission. Participants, prior to January 1, 2024, signed and submitted Form HUD-9886 at each annual reexamination. HOTMA eliminated this requirement and instead required that the Form HUD-9886-A be signed only once. On or after January 1, 2024 (regardless of the PHA’s HOTMA compliance date), current program participants must sign and submit a new Form HUD-9886-A at their next interim or annual reexamination. This form will only be signed once. Another Form HUD-9886-A will not be submitted to the PHA except under the following circumstances:
• When any person 18 years or older becomes a member of the family; • When a current member of the family turns 18; or
• As required by HUD or the PHA in administrative instructions.
The PHA has the discretion to establish policies around when family members must sign consent forms when they turn 18. PHAs must establish these policies stating when family members will be required to sign consent forms at intervals other than at reexamination.
PHA Policy
Family members turning 18 years of age between annual recertifications will be required to sign the required Consent to the Release of Information Form HUD-9886-A within 10 business days of turning 18 years of age.
The purpose of form HUD-9886-A is to facilitate automated data collection and computer matching from specific sources and provides the family's consent only for the specific purposes listed on the form. HUD and the PHA may collect information from State Wage Information Collection Agencies (SWICAs) and current and former employers of adult family members. Only HUD is authorized to collect information directly from the Internal Revenue Service (IRS) and the Social Security Administration (SSA).
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The PHA may obtain any financial record from any financial institution, as the terms financial record and financial institution are defined in the Right to Financial Privacy Act (12 U.S.C. 3401), whenever the PHA determines the record is needed to determine an applicant’s or participant’s eligibility for assistance or level of benefits [24 CFR 5.230(c)(4)].
The executed form will remain effective until the family is denied assistance, assistance is terminated, or the family provides written notification to the PHA to revoke consent.
Penalties for Failing to Consent [24 CFR 5.232]
If any family member who is required to sign a consent form fails to do so, the PHA will deny admission to applicants and terminate assistance of participants. The family may request an informal review (applicants) or informal hearing (participants) in accordance with PHA procedures.
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7A-I.B. OVERVIEW OF VERIFICATION REQUIREMENTS
Use of Other Programs’ Income Determinations [24 CFR 5.609(c)(3) and Notice PIH 2023-27] PHAs may, but are not required to, determine a family’s annual income, including income from assets, prior to the application of any deductions, based on income determinations made within the previous 12-month period, using income determinations from means-tested federal public assistance programs. PHAs are not required to accept or use determinations of income from other federal means-tested forms of assistance. If the PHA adopts a policy to accept this type of verification, the PHA must establish in policy when they will accept Safe Harbor income determinations and from which programs. PHAs must also create policies that outline the course of action when families present multiple verifications from the same or different acceptable Safe Harbor programs.
Means-tested federal public assistance programs include:
• Temporary Assistance for Needy Families (TANF) (42 U.S.C. 601, et seq.); • Medicaid (42 U.S.C. 1396 et seq.);
• Supplemental Nutrition Assistance Program (SNAP) (42 U.S.C. 2011 et seq.); • Earned Income Tax Credit (EITC) (26 U.S.C. 32);
• Low-Income Housing Tax Credit (LIHTC) program (26 U.S.C. 42); • Special Supplemental Nutrition Program for Woman, Infants, and Children (WIC) (42 U.S.C. 1786);
• Supplemental Security Income (SSI) (42 U.S.C. 1381 et seq.); • Other programs administered by the HUD Secretary;
• Other means-tested forms of federal public assistance for which HUD has established a memorandum of understanding; and
• Other federal benefit determinations made in other forms of means-tested federal public assistance that the Secretary determines to have comparable reliability and announces through the Federal Register.
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If the PHA elects to use the annual income determination from one of the above-listed forms of means-tested federal public assistance, then they must obtain the income information by means of a third-party verification. The third-party verification must state the family size, must be for the entire family, and must state the amount of the family’s annual income. The annual income need not be broken down by family member or income type. Annual income includes income earned from assets, therefore when using Safe Harbor to verify a family’s income, PHAs will neither further inquire about a family’s net family assets, nor about the income earned from those assets, except with respect to whether or not the family owns assets that exceed the asset limitation in 24 CFR 5.618. The Safe Harbor documentation will be considered acceptable if any of the following dates fall into the 12-month period prior to the receipt of the documentation by the PHA:
• Income determination effective date;
• Program administrator’s signature date;
• Family’s signature date;
• Report effective date; or
• Other report-specific dates that verify the income determination date.
The only information that PHAs are permitted to use to determine income under this method is the total income determination made by the federal means-tested program administrator.
Other federal programs may provide additional information about income inclusions and exclusions in their award letters; however, these determinations and any other information must not be considered by the PHA. PHAs are not permitted to mix and match Safe Harbor income determinations and other income verifications.
If the PHA is unable to obtain Safe Harbor documentation or if the family disputes the other program’s income determination, the PHA must calculate the family’s annual income using traditional methods as outlined in Notice PIH 2023-27 and this chapter.
If the PHA uses a Safe Harbor determination to determine the family’s income, the family is obligated to report changes in income that meet the PHA’s reporting requirement and occur after the effective date of the transaction.
The amounts of unreimbursed reasonable attendant care expenses and childcare expenses deducted from a family’s annual income, except for when a family is approved for a childcare expense hardship exemption, must still be capped by the amount earned by any family member who is enabled to work as a result of the expense. PHAs are therefore required to obtain thirdparty verification of the applicable employment income and cap the respective expense deductions accordingly.
PHA Policy
The Safe Harbor documentation will not be accepted for New Admissions and Interims.
Safe Harbor documentation may be used at Annual Recertifications only if it accurately reflects household’s total income from all sources.
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When available and applicable, the PHA will accept other programs’ Safe Harbor determinations of income at annual reexamination to determine the family’s total annual income.
The PHA will confirm with the family that all income listed is complete and accurate before accepting a Safe Harbor determination from another program. The income information must reflect the family’s full actual income, regardless of exclusions allowed by the other program. The PHA reserves the right to obtain independent third party verification of income whenever the Safe Harbor documentation submitted by a family does not fully or conclusively establish the household’s total income.
The PHA will still require third-party verification of all deductions such as the health and medical care expense or childcare expense deductions. Further, if the family is eligible for and claims the disability assistance expense or childcare expense deductions, where applicable, the PHA will obtain third-party verification of the amount of employment income of the individual(s) enabled to work in order to cap the respective expenses as required.-
Prior to using any Safe Harbor determination from another program, the PHA will ask the family if they agree with the income amounts listed. If the family disputes the income amounts on the Safe Harbor determination, the PHA will obtain third-party verification of all sources of income and assets (as applicable).
The PHA may at its discretion accept other programs’ determinations of income for any new admission or interim reexamination.
With the exception of income determinations made under the Low-Income Housing Tax Credit (LIHTC) program, the PHA will accept Safe Harbor determinations from any of the programs listed aboveThe PHA will accept Safe Harbor determinations from any of the programs listed above.
In order to be acceptable, the income determination must:
Be dated within 12 months of the dates listed above;
State the family size
Be for the entire family (i.e., the family members listed in the documentation must match the family’s composition in the assisted unit, except for household members); and
Must state the amount of the family’s actual annual income from all sources.
The determination need not list each source of income individually as long as the total represents the complete and accurate amount. If the PHA does not receive any acceptable income determination documentation or is unable to obtain documentation, then the PHA will revert to third-party verification of income for the family.
When families present multiple verifications from the same or different acceptable Safe Harbor programs, the PHA will use the most recent income determination, unless the © Copyright 2024 Nan McKay & Associates, Inc.
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family presents acceptable evidence that the PHA should consider an alternative verification from a different Safe Harbor source.
When the PHA uses a Safe Harbor income determination from another program, and the family’s income subsequently changes, the family is required to report the change to the PHA. Depending on when the change occurred, the change may or may not impact the PHA’s calculation of the family’s total annual income. Changes that occur between the time the PHA receives the Safe Harbor documentation, and the effective date of the family’s annual reexamination will not be considered. If the family has a change in income that occurs after the annual reexamination effective date, the PHA will conduct an interim reexamination if the change meets the requirements for performing an interim reexamination as outlined in Chapter 11. In this case, the PHA will use thirdparty verification to verify the change.
HUD’s Verification Hierarchy [Notice PIH 2018-18]
HUD mandates the use of the EIV system and offers administrative guidance on the use of other methods to verify family information and specifies the circumstances in which each method will be used. In general HUD requires the PHA to use the most reliable form of verification that is available and to document the reasons when the PHA uses a lesser form of verification.
In order of priority, the forms of verification that the PHA will use are:
• Up-front Income Verification (UIV) using HUD’s Enterprise Income Verification (EIV) system • Up-front Income Verification (UIV) using a non-HUD system • Written Third-Party Verification (may be provided by applicant or participant) • Written Third-party Verification Form
• Oral Third-party Verification
• Self-Certification
Each of the verification methods is discussed in subsequent sections below.
Requirements for Acceptable Documents
PHA Policy
Any documents used for verification must be the original (not photocopies) and generally must be dated within 60 120 days of receipt by the PHA. The documents must not be damaged, altered or in any way illegible.
Printouts from webpages are considered original documents.
The PHA staff member who views the original document must scan the document into the PHA secure records retention system.
Any family self-certifications must be made in a format acceptable to the PHA and must be signed by the family member whose information or status is being verified.
File Documentation
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The PHA must document in the file how the figures used in income and rent calculations were determined. All verification attempts, information obtained, and decisions reached during the verification process will be recorded in the family’s file in sufficient detail to demonstrate that the PHA has followed all of the verification policies set forth in this plan. The record should be sufficient to enable a staff member or HUD reviewer to understand the process followed and conclusions reached.
PHA Policy
The PHA will document, in the family file, the following:
Reported family annual income
Value of assets
Expenses related to deductions from annual income
Other factors influencing adjusted income
When the PHA is unable to obtain third-party verification, the PHA will document in the family file the reason that third-party verification was not available [24 CFR 982.516(a)(2); Notice PIH 2018-18].
7A-I.C. UP-FRONT INCOME VERIFICATION (UIV)
Up-front income verification (UIV) refers to the PHA’s use of the verification tools available from independent sources that maintain computerized information about earnings and benefits. UIV will be used to the extent that these systems are available to the PHA.
There may be legitimate differences between the information provided by the family and UIVgenerated information. If the family disputes the accuracy of UIV data, no adverse action can be taken until the PHA has independently verified the UIV information and the family has been granted an opportunity to contest any adverse findings through the informal review/hearing process of the PHA.
See Chapter 6 for the PHA’s policy on the use of UIV/EIV to project annual income.
Upfront Income Verification Using HUD’s Enterprise Income Verification (EIV) System (Mandatory)
PHAs must use HUD’s EIV system in its entirety as a third-party source to verify tenant employment and income information during mandatory reexaminations or recertifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. However, the PHA is not required to verify income information in EIV at annual reexam when Safe Harbor verification is used to determine a family’s income [Notice PIH 2023- 27]. The EIV system contains data showing earned income, unemployment benefits, social security benefits, and SSI benefits for participant families. The following policies apply to the use of HUD’s EIV system.
EIV Income Reports
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The data shown on income and income validation tool (IVT) reports is updated quarterly. Data may be between 3 and 6 months old at the time reports are generated.
PHA Policy
The PHA will obtain income reports for annual reexaminations on a monthly basis.
Reports will be generated as part of the regular reexamination process.
Income reports will be compared to family-provided information as part of the annual reexamination process. Income reports may be used in the calculation of annual income, as described in Chapter 6-I.C. Income reports may also be used to meet the regulatory requirement for third party verification, as described above. Policies for resolving discrepancies between income reports and family-provided information will be resolved as described in Chapter 6-I.C. and in this chapter.
Income reports will be used in interim reexaminations to identify any discrepancies between reported income and income shown in the EIV system, and as necessary to verify earned income, and to verify and calculate unemployment benefits, Social Security and/or SSI benefits. EIV will also be used to verify that families claiming zero income are not receiving income from any of these sources.
Income reports will be retained in participant files with the applicable annual or interim reexamination documents.
When the PHA determines through income reports and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 14, Program Integrity.
EIV Identity Verification
The EIV system verifies tenant identities against SSA records. These records are compared to PIC data for a match on social security number, name, and date of birth.
PHAs are required to use EIV’s Identity Verification Report on a monthly basis to improve the availability of income information in EIV [Notice PIH 2018-18].
When identity verification for a participant fails, a message will be displayed within the EIV system and no income information will be displayed.
PHA Policy
The PHA will identify participants whose identity verification has failed by reviewing EIV’s Identity Verification Report on a monthly basis.
The PHA will attempt to resolve PIC/SSA discrepancies by obtaining appropriate documentation from the participant. When the PHA determines that discrepancies exist due to PHA errors such as spelling errors or incorrect birth dates, the errors will be corrected promptly.
Upfront Income Verification Using Non-HUD Systems (Optional) In addition to mandatory use of the EIV system, HUD encourages PHAs to utilize other upfront verification sources.
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PHA Policy
The PHA will inform all applicants and participants of its use of the following UIV resources during the admission and reexamination process:
HUD’s EIV system
The Work Number
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7A-I.D. THIRD-PARTY WRITTEN AND ORAL VERIFICATION
HUD’s current verification hierarchy defines two types of written third-party verification. The more preferable form, “written third-party verification,” consists of an original document generated by a third-party source, which may be received directly from a third-party source or provided to the PHA by the family. If written third-party verification is not available, the PHA must attempt to obtain a “written third-party verification form.” This is a standardized form used to collect information from a third party.
Written Third-Party Verification [Notice PIH 2018-18]
Written third-party verification documents must be original and authentic and may be supplied by the family or received from a third-party source.
Examples of acceptable tenant-provided documents include, but are not limited to: pay stubs, payroll summary reports, employer notice or letters of hire and termination, SSA benefit verification letters, bank statements, child support payment stubs, welfare benefit letters and/or printouts, and unemployment monetary benefit notices.
The PHA is required to obtain, at minimum, two current and consecutive pay stubs for determining annual income from wages.
The PHA may reject documentation provided by the family if the document is not an original, if the document appears to be forged, or if the document is altered, mutilated, or illegible.
Written, third-party verification includes an original or authentic document generated by a third-party source dated within 120 days of the date received by the PHA [Notice PIH 2023-27].
PHAs may accept a statement dated within the appropriate benefit year for fixed income sources [Notice PIH 2023-27].
PHA Policy
Third-party documents provided by the family must be dated within 60120 days of receipt by the PHA. the PHA request date.
If the PHA determines that third-party documents provided by the family are not acceptable, the PHA will explain the reason to the family and request additional documentation.
As verification of earned income, the PHA will require the family to provide the two most current, consecutive pay stubs. At the PHA’s discretion, if additional paystubs are needed due to the family’s circumstances (e.g., sporadic income, fluctuating schedule, etc.), the PHA may request additional paystubs or a payroll record.
Written Third-Party Verification Form
When upfront verification is not available and the family is unable to provide written thirdparty documents, the PHA must request a written third-party verification form. HUD’s position is that this traditional third-party verification method presents administrative burdens and risks which may be reduced through the use of family-provided third-party documents. © Copyright 2024 Nan McKay & Associates, Inc.
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PHAs may mail or email third-party written verification form requests to third-party sources.
PHA Policy
The PHA will send third-party verification forms directly to the third party.
Third-party verification forms will be sent when third-party verification documents are unavailable or are rejected by the PHA.
Oral Third-Party Verification [Notice PIH 2018-18]
For third-party oral verification, PHAs contact sources, identified by UIV techniques or by the family, by telephone or in person.
Oral third-party verification is mandatory if neither form of written third-party verification is available.
Third-party oral verification may be used when requests for written third-party verification forms have not been returned within a reasonable time—e.g., 10 business days.
PHAs should document in the file the date and time of the telephone call or visit, the name of the person contacted, the telephone number, as well as the information confirmed.
PHA Policy
In collecting third-party oral verification, PHA staff will record in the family’s file the name and title of the person contacted, the date and time of the conversation (or attempt), the telephone number used, and the facts provided.
When any source responds verbally to the initial written request for verification the PHA will accept the verbal response as oral verification but will also request that the source complete and return any verification forms that were provided.
When Third-Party Verification is Not Required [Notice PIH 2018-18] Third-party verification may not be available in all situations. HUD has acknowledged that it may not be cost-effective or reasonable to obtain third-party verification of income, assets, or expenses when these items would have a minimal impact on the family’s total tenant payment.
PHA Policy
If the family cannot provide original documents, the PHA will pay the service charge required to obtain third-party verification, unless it is not cost effective in which case a self-certification will be acceptable as the only means of verification. The cost of verification will not be passed on to the family.
The cost of postage and envelopes to obtain third-party verification of income, assets, and expenses is not an unreasonable cost [VG, p. 18].
Primary Documents
Third-party verification is not required when legal documents are the primary source, such as a birth certificate or other legal documentation of birth.
Imputed Assets
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HUD permits PHAs to accept a self-certification from a family as verification of assets disposed of for less than fair market value [HCV GB, p. 5-28].
PHA Policy
The PHA will accept a self-certification from a family as verification of assets disposed of for less than fair market value.
Value of Assets and Asset Income [24 CFR 982.516(a)]
For families with net assets totaling $5,000 or less, the PHA may accept the family’s declaration of asset value and anticipated asset income. However, the PHA is required to obtain third-party verification of all assets regardless of the amount during the intake process and at least every three years thereafter.
PHA Policy
For families with net assets totaling $5,000 or less, the PHA will accept the family’s selfcertification of the value of family assets and anticipated asset income when applicable.
The family’s declaration must show each asset and the amount of income expected from that asset. All family members 18 years of age and older must sign the family’s declaration.
The PHA will use third-party documentation for assets as part of the intake process, whenever a family member is added to verify the individual’s assets, and every three years thereafter.
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7A-I.E. SELF-CERTIFICATION
When HUD requires third-party verification, self-certification or “tenant declaration,” is used as a last resort when the PHA is unable to obtain third-party verification.
Self-certification, however, is an acceptable form of verification when:
• A source of income is fully excluded
• Net family assets total $5,000 or less and the PHA has adopted a policy to accept self certification at annual recertification, when applicable • The PHA has adopted a policy to implement streamlined annual recertifications for fixed sources of income (See Chapter 11)
When the PHA was required to obtain third-party verification but instead relies on a tenant declaration for verification of income, assets, or expenses, the family’s file must be documented to explain why third-party verification was not available.
PHA Policy
When information cannot be verified by a third party or by review of documents, family members will be required to submit self-certifications attesting to the accuracy of the information they have provided to the PHA.
The PHA may require a family to certify that a family member does not receive a particular type of income or benefit.
The self-certification must be made in a format acceptable to the PHA and must be signed by the family member whose information or status is being verified. © Copyright 2024 Nan McKay & Associates, Inc.
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PART II: VERIFYING FAMILY INFORMATION
7A-II.A. VERIFICATION OF LEGAL IDENTITY
PHA Policy
The PHA will require families to furnish verification of legal identity for each household member.
Verification of Legal Identity for Adults Verification of Legal Identity for Children Certificate of birth, naturalization papers
Church issued baptismal certificate
Current, valid driver's license or
Department of Motor Vehicles
identification card
U.S. military discharge (DD 214)
Current U.S. passport
Current government employer
identification card with picture
Certificate of birth
Adoption papers
Custody agreement
Health and Human Services ID
Certified school records
If a document submitted by a family is illegible for any reason or otherwise questionable, more than one of these documents may be required.
If none of these documents can be provided and at the PHA’s discretion, a third party who knows the person may attest to the person’s identity. The certification must be provided in a format acceptable to the PHA and must be signed by the family member whose information or status is being verified.
Legal identity will be verified for all applicants at the time of eligibility determination and in cases where the PHA has reason to doubt the identity of a person representing themselves to be a participant.
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7A-II.B. SOCIAL SECURITY NUMBERS [24 CFR 5.216, Notice PIH 2018-24] The family must provide documentation of a valid social security number (SSN) for each member of the household, with the exception of individuals who do not contend eligible immigration status. Exemptions also include existing program participants who were at least 62 years of age as of January 31, 2010, and had not previously disclosed an SSN.
Note that an individual who previously declared to have eligible immigration status may not change their declaration for the purpose of avoiding compliance with the SSN disclosure and documentation requirements or penalties associated with noncompliance with these requirements. Nor may the head of household opt to remove a household member from the family composition for this purpose.
The PHA must accept the following documentation as acceptable evidence of the social security number:
• An original SSN card issued by the Social Security Administration (SSA) • An original SSA-issued document, which contains the name and SSN of the individual • An original document issued by a federal, state, or local government agency, which contains the name and SSN of the individual
While PHAs must attempt to gather third-party verification of SSNs prior to admission as listed above, PHAs also have the option of accepting a self-certification and a third-party document (such as a bank statement, utility or cell phone bill, or benefit letter) with the applicant’s name printed on it to satisfy the SSN disclosure requirement if the PHA has exhausted all other attempts to obtain the required documentation. If verifying an individual’s SSN using this method, the PHA must document why the other SSN documentation was not available [Notice PIH 2023-27].
PHA Policy
The PHA will verify an individual’s SSN in the situations described above using the method described above as a last resort when no other forms of verification of the individual’s SSN are available.
The PHA may only reject documentation of an SSN provided by an applicant or participant if the document is not an original document or if the original document has been altered, mutilated, is illegible, or appears to be forged.
PHA Policy
The PHA will explain to the applicant or participant the reasons the document is not acceptable and request that the individual obtain and submit acceptable documentation of the SSN to the PHA within 90 days.
In the case of Moderate Rehabilitation Single Room Occupancy (SRO) individuals, the required documentation must be provided within 90 calendar days from the date of admission into the program. The PHA must grant one additional 90-day extension if it determines that the © Copyright 2024 Nan McKay & Associates, Inc.
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applicant’s failure to comply was due to circumstances that were beyond the applicant’s control and could not have been reasonably foreseen.
PHA Policy
The PHA will grant one additional 90-day extension if needed for reasons beyond the participant’s control such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency. If the individual fails to comply with SSN disclosure and documentation requirements upon expiration of the provided time period, the PHA will terminate the individual’s assistance.
If an applicant family includes a child under 6 years of age who joined the household within the 6 months prior to the date of voucher issuance, an otherwise eligible family may be admitted to the program and the family must provide documentation of the child’s SSN within 90 days of the effective date of the initial HAP contract. A 90-day extension will be granted if the PHA determines that the participant’s failure to comply was due to unforeseen circumstances and was outside of the participant’s control.
PHA Policy
The PHA will grant one additional 90-day extension if needed for reasons beyond the applicant’s control, such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency.
When a participant requests to add a new household member who is at least 6 years of age, or who is under the age of 6 and has an SSN, the participant must provide the complete and accurate SSN assigned to each new member at the time of reexamination or recertification, in addition to the documentation required to verify it. The PHA may not add the new household member until such documentation is provided.
When a participant requests to add a new household member who is under the age of 6 and has not been assigned an SSN, the participant must provide the SSN assigned to each new child and the required documentation within 90 calendar days of the child being added to the household. A 90-day extension will be granted if the PHA determines that the participant’s failure to comply was due to unforeseen circumstances and was outside of the participant’s control. During the period the PHA is awaiting documentation of the SSN, the child will be counted as part of the assisted household.
PHA Policy
The PHA will grant one additional 90-day extension if needed for reasons beyond the participant’s control such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency.
Social security numbers must be verified only once during continuously-assisted occupancy.
PHA Policy
The PHA will verify each disclosed SSN by:
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Obtaining documentation from applicants and participants that is acceptable as evidence of social security numbers
Making a copy of the original documentation submitted, returning it to the individual, and retaining a copy in the file folder
Once the individual’s verification status is classified as “verified,” the PHA may, at its discretion, remove and destroy copies of documentation accepted as evidence of social security numbers.
The retention of the EIV Summary Report or Income Report is adequate documentation of an individual’s SSN.
PHA Policy
Once an individual’s status is classified as “verified” in HUD’s EIV system, the PHA will not remove and destroy copies of documentation accepted as evidence of social security numbers.
7A-II.C. DOCUMENTATION OF AGE
A birth certificate or other official record of birth is the preferred form of age verification for all family members. For elderly family members an original document that provides evidence of the receipt of social security retirement benefits is acceptable.
PHA Policy
If an official record of birth or evidence of social security retirement benefits cannot be provided, the PHA will require the family to submit other documents that support the reported age of the family member (e.g., school records, driver's license if birth year is recorded) and to provide a self-certification.
Age must be verified only once during continuously assisted occupancy. 7A-II.D. FAMILY RELATIONSHIPS
Applicants and program participants are required to identify the relationship of each household member to the head of household. Definitions of the primary household relationships are provided in the Eligibility chapter.
PHA Policy
Family relationships are verified only to the extent necessary to determine a family’s eligibility and level of assistance. Certification by the head of household normally is sufficient verification of family relationships.
Marriage
PHA Policy
Certification by the head of household is normally sufficient verification. If the PHA has reasonable doubts about a marital relationship, the PHA will require the family to document the marriage.
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Separation or Divorce
PHA Policy
Certification by the head of household is normally sufficient verification. If the PHA has reasonable doubts about a separation or divorce, the PHA will require the family to provide documentation of the divorce or separation.
A certified copy of a divorce decree, signed by a court officer, is required to document that a couple is divorced.
A copy of a court-ordered maintenance or other court record is required to document a separation.
If no court document is available, documentation from a community-based agency will be accepted.
Absence of Adult Member
PHA Policy
If an adult member who was formerly a member of the household is reported to be permanently absent, the family must provide evidence to support that the person is no longer a member of the family (e.g., documentation of another address at which the person resides such as a lease or utility bill), if the PHA so requests. In addition, the PHA will require a signed/notarized statement from the family confirming that the person is not residing in the unit including the understanding of the HUD rules regarding unauthorized occupancy.
Foster Children and Foster Adults
PHA Policy
Third-party verification from the state or local government agency responsible for the placement of the individual with the family is required. © Copyright 2024 Nan McKay & Associates, Inc.
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7A-II.E. VERIFICATION OF STUDENT STATUS
General Requirements
PHA Policy
The PHA requires families to provide information about the student status of all students who are 18 years of age or older. This information will be verified only if:
The family reports full-time student status for an adult other than the head, spouse, or cohead.
The family reports childcare expenses to enable a family member to further their education.
The family includes a student enrolled in an institution of higher education.
If the full-time adult student has employment income. Verification of full-time student status includes:
• Written verification from the registrar’s office indicating enrollment for sufficient number of credits to be considered a full-time student by the educational institution. Full-time student status will be verified at each certification. Failure to complete the required college units will result in the loss of full-time student status.
• Head of Household will be required to complete a Notice of Student Status form at each certification.
• Certified college transcripts to verify completion of college units. • If the student has part-time enrollment status in more than one educational institution, the units may be combined to achieve full-time student status.
Restrictions on Assistance to Students Enrolled in Institutions of Higher Education This section applies only to students who are seeking assistance on their own, separately from their parents. It does not apply to students residing with parents who are seeking or receiving HCV assistance.
PHA Policy
In accordance with the verification hierarchy described in section 7-1.B, the PHA will determine whether the student is exempt from the restrictions in 24 CFR 5.612 by verifying any one of the following exemption criteria:
The student is enrolled at an educational institution that does not meet the definition of institution of higher education in the Higher Education Act of 1965 (see section Exhibit 3-2).
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The student is at least 24 years old.
The student is a veteran, as defined in section 3-II.E.
The student is married.
The student has at least one dependent child, as defined in section 3-II.E.
The student is a person with disabilities, as defined in section 3-II.E, and was receiving assistance prior to November 30, 2005.
If the PHA cannot verify at least one of these exemption criteria, the PHA will conclude that the student is subject to the restrictions on assistance at 24 CFR 5.612. In addition to verifying the student’s income eligibility, the PHA will then proceed to verify either the student’s parents’ income eligibility (see section 7-III.J) or the student’s independence from their parents (see below).
Independent Student
PHA Policy
The PHA will verify a student’s independence from their parents to determine that the student’s parents’ income is not relevant for determining the student’s eligibility by doing all of the following:
Reviewing and verifying previous address information to determine whether the student has established a household separate from their parents for at least one year, or reviewing and verifying documentation relevant to determining whether the student meets the U.S. Department of Education’s definition of independent student (see section 3-II.E)
Reviewing the student’s prior year income tax returns to verify the student is independent or verifying the student meets the U.S. Department of Education’s definition of independent student (see section 3-II.E)
Requesting and obtaining written certification directly from the student’s parents identifying the amount of support they will be providing to the student, even if the amount of support is $0, except in cases in which the PHA determines that the student is a vulnerable youth (see section 3-II.E) © Copyright 2024 Nan McKay & Associates, Inc.
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7A-II.F. DOCUMENTATION OF DISABILITY
The PHA must verify the existence of a disability in order to allow certain income disallowances and deductions from income. The PHA is not permitted to inquire about the nature or extent of a person’s disability [24 CFR 100.202(c)]. The PHA may not inquire about a person’s diagnosis or details of treatment for a disability or medical condition. If the PHA receives a verification document that provides such information, the PHA will not place this information in the tenant file. Under no circumstances will the PHA request a participant’s medical record(s). For more information on health care privacy laws, see the Department of Health and Human Services’ website at http://www.hhs.gov/ocr/privacy/.
The above cited regulation does not prohibit the following inquiries, provided these inquiries are made of all applicants, whether or not they are persons with disabilities [VG, p. 24]:
• Inquiry into an applicant’s ability to meet the requirements of ownership or tenancy • Inquiry to determine whether an applicant is qualified for a dwelling available only to persons with disabilities or to persons with a particular type of disability • Inquiry to determine whether an applicant for a dwelling is qualified for a priority available to persons with disabilities or to persons with a particular type of disability • Inquiring whether an applicant for a dwelling is a current illegal abuser or addict of a controlled substance
• Inquiring whether an applicant has been convicted of the illegal manufacture or distribution of a controlled substance
Family Members Receiving SSA Disability Benefits
Verification of the receipt of disability benefits from the Social Security Administration (SSA) is sufficient verification of disability for the purpose of qualifying for waiting list preferences (if applicable) or certain income disallowances and deductions [VG, p. 23].
PHA Policy
For family members claiming disability who receive disability benefits from the SSA, the PHA will attempt to obtain information about disability benefits through the HUD Enterprise Income Verification (EIV) system. If documentation from HUD’s EIV System is not available, the PHA will request a current (dated within the appropriate benefit year) SSA benefit verification letter from each family member claiming disability status. If the family is unable to provide the document(s), the PHA will ask the family to request a benefit verification letter by either calling SSA at 1-800-772-1213, or by requesting it from www.ssa.gov. Once the applicant or participant receives the benefit verification letter they will be required to provide it to the PHA.
Family Members Not Receiving SSA Disability Benefits
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Receipt of veteran’s disability benefits, worker’s compensation, or other non-SSA benefits based on the individual’s claimed disability are not sufficient verification that the individual meets HUD’s definition of disability in 24 CFR 5.403.
PHA Policy
For family members claiming disability who do not receive disability benefits from the SSA, a knowledgeable professional must provide third-party verification that the family member meets the HUD definition of disability. See the Eligibility chapter for the HUD definition of disability. The knowledgeable professional will verify whether the family member does or does not meet the HUD definition.
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7A-II.G. CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS [24 CFR 5.508] Overview
Housing assistance is not available to persons who are not citizens, nationals, or eligible immigrants. Prorated assistance is provided for "mixed families" containing both eligible and ineligible persons. A detailed discussion of eligibility requirements is in the Eligibility chapter.
This verifications chapter discusses HUD and PHA verification requirements related to citizenship status.
The family must provide a certification that identifies each family member as a U.S. citizen, a U.S. national, an eligible noncitizen or an ineligible noncitizen and submit the documents discussed below for each family member. Once eligibility to receive assistance has been verified for an individual it need not be collected or verified again during continuously assisted occupancy. [24 CFR 5.508(g)(5)]
U.S. Citizens and Nationals
HUD requires a declaration for each family member who claims to be a U.S. citizen or national.
The declaration must be signed personally by any family member 18 or older and by a guardian for minors.
The PHA may request verification of the declaration by requiring presentation of a birth certificate, United States passport or other appropriate documentation.
PHA Policy
The PHA requires all adult applicant family members to submit verification of their citizenship. All families will be notified of the requirement to submit evidence of their citizenship status when they apply. If evidence cannot reasonably be provided by the family, the PHA may accept a signed declaration from all family members as verification of citizenship, unless the PHA receives credible information indicating that an individual’s declaration may not be accurate. The PHA may utilize third party verification of citizenship if available.
Eligible Immigrants
Documents Required
All family members claiming eligible immigration status must declare their status in the same manner as U.S. citizens and nationals.
The documentation required for eligible noncitizens varies depending upon factors such as the date the person entered the U.S., the conditions under which eligible immigration status has been granted, age, and the date on which the family began receiving HUD-funded assistance.
Exhibit 7-1 at the end of this chapter summarizes documents family members must provide.
PHA Verification [HCV GB, pp. 5-3 and 5-7]
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For family members age 62 or older who claim to be eligible immigrants, proof of age is required in the manner described in 7-II.C. of this plan. No further verification of eligible immigration status is required.
For family members under the age of 62 who claim to be eligible immigrants, the PHA must verify immigration status with the United States Citizenship and Immigration Services (USCIS).
The PHA will follow all USCIS protocols for verification of eligible immigration status. 7A-II.H. VERIFICATION OF PREFERENCE STATUS
The PHA must verify any preferences claimed by an applicant that determined placement on the waiting list.
PHA Policy
The PHA will offer a preference to any family that has been terminated from its Section 8 HCV program due to insufficient program funding. The PHA will verify this preference using the PHA’s termination records.
The PHA also offers a preference for victims of domestic violence, dating violence, sexual assault, or stalking, as described in Section 4-III.C. To verify that applicants qualify for the preference, the PHA will follow documentation requirements outlined in Section 16-IX.D.
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PART III: VERIFYING INCOME AND ASSETS
Chapter 6, Part I of this plan describes in detail the types of income that are included and excluded and how assets and income from assets are handled. Any assets and income reported by the family must be verified. This part provides PHA policies that supplement the general verification procedures specified in Part I of this chapter. 7A-III.A. EARNED INCOME
Tips
PHA Policy
When the PHA requires third-party verification of wages, for wages other than tips, the family must provide originals of the two most current, consecutive pay stubs. At the PHA’s discretion, if additional paystubs are needed due to the family’s circumstances (e.g., sporadic income, fluctuating schedule, etc.), the PHA may request additional paystubs or a payroll record.
Wages
PHA Policy
For wages other than tips, the family must provide originals of the two most current, consecutive pay stubs. At the PHA’s discretion, if additional paystubs are needed due to the family’s circumstances (e.g., sporadic income, fluctuating schedule, etc.), the PHA may request additional paystubs or a payroll record.
7A-III.B. BUSINESS AND SELF EMPLOYMENT INCOME
PHA Policy
Business owners and self-employed persons will be required to provide:
An audited financial statement for the previous fiscal year if an audit was conducted. If an audit was not conducted, a statement of income and expenses must be submitted and the business owner or self-employed person must certify to its accuracy.
All schedules completed for filing federal and local taxes in the preceding year.
If accelerated depreciation was used on the tax return or financial statement, an accountant's calculation of depreciation expense, computed using straight-line depreciation rules.
The PHA will provide a format for any person who is unable to provide such a statement to record income and expenses for the coming year. The business owner/self-employed person will be required to submit the information requested and to certify to its accuracy at all future reexaminations.
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At any reexamination the PHA may request documents that support submitted financial statements such as manifests, appointment books, cash books, or bank statements.
If a family member has been self-employed less than three (3) months, the PHA will accept the family member's certified estimate of income and schedule an interim reexamination in three (3) months. If the family member has been self-employed for three (3) to twelve (12) months the PHA will require the family to provide documentation of income and expenses for this period and use that information to project income.
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7A-III.C. PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS For policies governing streamlined income determinations for fixed sources of income, please see Chapter 11.
Social Security/SSI Benefits
Verification requirements for Social Security (SS) and Supplemental Security Income (SSI) benefits differ for applicants and participants.
For applicants, since EIV does not contain SS or SSI benefit information, the PHA must ask applicants to provide a copy of their current SS and/or SSI benefit letter (dated within the appropriate benefit year) for each family member that receives SS and/or SSI benefits. If the family is unable to provide the document or documents, the PHA should help the applicant request a benefit verification letter from SSA’s website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter from the applicant, make a photocopy of the document for the file, and return the original to the family.
For participants, the PHA must obtain information through the HUD EIV system and confirm with the participants that the current listed benefit amount is correct. • If the participant agrees with the amount reported in EIV, the PHA must use the EIVreported gross benefit amount to calculate annual income from Social Security. PHAs are required to use the EIV-reported SS and SSI benefit amounts when calculating income unless the tenant disputes the EIV-reported amount. For example, an SSA benefit letter may list the monthly benefit amount as $450.80 and EIV displays the amount as $450.00. The PHA must use the EIV-reported amount unless the participant disputes the amount. • If the participant disputes the EIV-reported benefit amount, or if benefit information is not available in EIV, the PHA must request a current SSA benefit verification letter (dated within the appropriate benefit year) from each family member that receives SS and/or SSI benefits.
If the family is unable to provide the document or documents, the PHA should help the participant request a benefit verification letter from SSA’s website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter from the participant, make a photocopy of the document for the file, and return the original to the family.
Photocopies of social security checks or bank statements are not acceptable forms of verification for SS/SSI benefits.
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7A-III.D. ALIMONY OR CHILD SUPPORT
PHA Policy
The methods the PHA will use to verify alimony and child support payments differ depending on whether the family declares that it receives regular payments.
If the family declares that it receives regular payments, verification will be obtained in the following order of priority:
Copies of the receipts and/or payment stubs for the 60 days prior to PHA request
Third-party verification form from the state or local child support enforcement agency
Third-party verification form from the person paying the support Family's self-certification of amount received
If the family declares that it receives irregular or no payments, in addition to the verification process listed above, the family must provide evidence that it has taken all reasonable efforts to collect amounts due. This may include:
A statement from any agency responsible for enforcing payment that shows the family has requested enforcement and is cooperating with all enforcement efforts
If the family has made independent efforts at collection, a written statement from the attorney or other collection entity that has assisted the family in these efforts
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7A-III.E. ASSETS AND INCOME FROM ASSETS
Assets Disposed of for Less than Fair Market Value
The family must certify whether any assets have been disposed of for less than fair market value in the preceding two years. The PHA needs to verify only those certifications that warrant documentation [HCV GB, p. 5-28].
PHA Policy
The PHA will verify the value of assets disposed of only if:
The PHA does not already have a reasonable estimation of its value from previously collected information, or
The amount reported by the family in the certification appears obviously in error.
Example 1: An elderly participant reported a $10,000 certificate of deposit at the last annual reexamination and the PHA verified this amount. Now the person reports that she has given this $10,000 to her son. The PHA has a reasonable estimate of the value of the asset; therefore, reverification of the value of the asset is not necessary.
Example 2: A family member has disposed of its 1/4 share of real property located in a desirable area and has valued her share at approximately $5,000. Based upon market conditions, this declaration does not seem realistic. Therefore, the PHA will verify the value of this asset.
7A-III.F. NET INCOME FROM RENTAL PROPERTY
PHA Policy
The family must provide:
A current executed lease for the property that shows the rental amount or certification from the current tenant
A self-certification from the family members engaged in the rental of property providing an estimate of expenses for the coming year and the most recent IRS Form 1040 with Schedule E (Rental Income).
If schedule E was not prepared, the PHA will require the family members involved in the rental of property to provide a self-certification of income and expenses for the previous year and may request documentation to support the statement including: tax statements, insurance invoices, bills for reasonable maintenance and utilities, and bank statements or amortization schedules showing monthly interest expense.
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7A-III.G. RETIREMENT ACCOUNTS
PHA Policy
The PHA will accept written third-party documents supplied by the family as evidence of the status of retirement accounts.
The type of original document that will be accepted depends upon the family member’s retirement status.
Before retirement, the PHA will accept an original document from the entity holding the account dated within the appropriate benefit year.
Upon retirement, the PHA will accept an original document dated within the appropriate benefit year from the entity holding the account that reflects any distributions of the account balance, any lump sums taken and any regular payments.
After retirement, the PHA will accept an original document from the entity holding the account dated within the appropriate benefit year that reflects any distributions of the account balance, any lump sums taken and any regular payments.
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7A-III.H. INCOME FROM EXCLUDED SOURCES
A detailed discussion of excluded income is provided in Chapter 6, Part I.
HUD guidance on verification of excluded income draws a distinction between income which is fully excluded and income which is only partially excluded.
For fully excluded income, the PHA is not required to follow the verification hierarchy, document why third-party verification is not available, or report the income on the 50058. Fully excluded income is defined as income that is entirely excluded from the annual income determination (for example, food stamps, earned income of a minor, or foster care funds) [Notice PIH 2013-04].
PHAs may accept a family’s signed application or reexamination form as self-certification of fully excluded income. They do not have to require additional documentation. However, if there is any doubt that a source of income qualifies for full exclusion, PHAs have the option of requiring additional verification.
For partially excluded income, the PHA is required to follow the verification hierarchy and all applicable regulations, and to report the income on the 50058. Partially excluded income is defined as income where only a certain portion of what is reported by the family qualifies to be excluded and the remainder is included in annual income (for example, the income of an adult full-time student).
PHA Policy
The PHA will accept the family’s self-certification as verification of fully excluded income. The PHA may request additional documentation if necessary to document the income source.
The PHA will verify the source and amount of partially excluded income as described in Part 1 of this chapter.
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7A-III.I. ZERO INCOME FAMILIES [Notice PIH 2023-27]
PHAs have discretion to establish reasonable procedures to manage the risk of unreported income, such as asking families to complete a zero-income worksheet at admission or periodically after admission to determine if they have any sources of unreported income or searching any UIV sources for unreported income.
In calculating annual income, PHAs must not assign monetary value to nonmonetary in-kind donations from a food bank or similar organization received by the family [24 CFR
5.609(b)(24)(vi)].
PHAs may accept a self-certification of zero income from the family without taking any additional steps to verify zero reported income. HUD does not require such self-certifications be notarized.
PHAs that perform zero income reviews must update local discretionary policies, procedures, and forms. Families who begin receiving income which does not trigger an interim reexamination should no longer be considered zero income even though the family’s income is not reflected on the Form HUD-50058.
PHA Policy
The PHA will check UIV sources and/or may request information from third-party sources to verify that certain forms of income such as unemployment benefits, TANF, SS, SSI, earned income, child support, etc., are not being received by families claiming to have zero annual income.
The PHA will also require that each family member who claims zero income status complete a zero-income form. If any sources of income are identified on the form, the PHA will verify the income in accordance with the policies in this chapter prior to including the income in the family’s annual income. The PHA will conduct interims in accordance with PHA policy in Chapter 11.
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7A-III.J. STUDENT FINANCIAL ASSISTANCE [[24 CFR 5.609(b)(9) as updated for HOTMANotice PIH 2015-21]
The regulations under HOTMA distinguish between two categories of student financial assistance paid to both full-time and part-time students. Any other grant-in-aid, scholarship, or other assistance amounts an individual receives for the actual covered costs charged by the institute of higher education not otherwise excluded by the federally mandated income exclusions are included [24 CFR 5.609(b)(9)(ii)].
PHA Policy
The PHA will request written third-party verification of both the source and the amount of student financial assistance. Family-provided documents from the educational institution attended by the student will be requested, as well as documents generated by any other person or entity providing such assistance, as reported by the student.
In addition, unless the student’s only source of assistance is assistance under Title IV of the HEA, the PHA will request written verification of the cost of the student’s tuition, books, supplies, room and board, and other required fees and charges to the student from the educational institution.
If the PHA is unable to obtain third-party written verification of the requested information, the PHA will pursue other forms of verification following the verification hierarchy in section 7-I.B.
Any financial assistance, in excess of amounts received for tuition, fees, and other required charges that a person attending an institution of higher education receives under the Higher Education Act of 1965, from private sources, or from an institution of higher education must be considered income unless the student is over the age of 23 with dependent children or is residing with parents who are seeking or receiving HCV assistance [24 CFR 5.609(b)(9) and FR 4/10/06].
For students over the age of 23 with dependent children or students residing with parents who are seeking or receiving HCV assistance, the full amount of student financial assistance is excluded from annual income [24 CFR 5.609(c)(6)]. The full amount of student financial assistance is also excluded for students attending schools that do not qualify as institutions of higher education (as defined in Exhibit 3-2). Excluded amounts are verified only if, without verification, the PHA would not be able to determine whether or to what extent the income is to be excluded (see section 7-III.H).
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PHA Policy
For a student subject to having a portion of their student financial assistance included in annual income in accordance with 24 CFR 5.609(b)(9), the PHA will request written third-party verification of both the source and the amount. Family-provided documents from the educational institution attended by the student will be requested, as well as documents generated by any other person or entity providing such assistance, as reported by the student.
In addition, the PHA will request written verification of the student’s tuition, fees, and other required charges.
If the PHA is unable to obtain third-party written verification of the requested information, the PHA will pursue other forms of verification following the verification hierarchy in section 7-I.B.
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7A-III.K. PARENTAL INCOME OF STUDENTS SUBJECT TO ELIGIBILITY RESTRICTIONS If a student enrolled at an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the income of the student’s parents must be considered when determining income eligibility, unless the student is determined independent from their parents or a vulnerable youth in accordance with PHA policy [24 CFR 5.612, FR Notice 4/10/06, p. 18146, and FR Notice 9/21/16].
This provision does not apply to students residing with parents who are seeking or receiving HCV assistance. It is limited to students who are seeking or receiving assistance on their own, separately from their parents.
PHA Policy
If the PHA is required to determine the income eligibility of a student’s parents, the PHA will request an income declaration and certification of income from the appropriate parent(s) (as determined in section 3-II.E). The PHA will send the request directly to the parents, who will be required to certify to their income under penalty of perjury. The parents will be required to submit the information directly to the PHA. The required information must be submitted (postmarked) within 10 business days of the date of the PHA’s request or within any extended timeframe approved by the PHA.
The PHA reserves the right to request and review supporting documentation at any time if it questions the declaration or certification. Supporting documentation may include, but is not limited to, Internal Revenue Service (IRS) tax returns, consecutive and original pay stubs, bank statements, pension benefit statements, benefit award letters, and other official and authentic documents from a federal, state, or local agency. © Copyright 2024 Nan McKay & Associates, Inc.
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PART IV: VERIFYING MANDATORY DEDUCTIONS
7A-IV.A. DEPENDENT AND ELDERLY/DISABLED HOUSEHOLD DEDUCTIONS The dependent and elderly/disabled family deductions require only that the PHA verify that the family members identified as dependents or elderly/disabled persons meet the statutory definitions. No further verifications are required.
Dependent Deduction
See Chapter 6 (6-II.B.) for a full discussion of this deduction. The PHA must verify that:
• Any person under the age of 18 for whom the dependent deduction is claimed is not the head, spouse, or cohead of the family and is not a foster child • Any person age 18 or older for whom the dependent deduction is claimed is not a foster adult or live-in aide, and is a person with a disability or a full time student Elderly/Disabled Family Deduction
See Eligibility chapter for a definition of elderly and disabled families and Chapter 6 (6-II.C.) for a discussion of the deduction. The PHA must verify that the head, spouse, or cohead is 62 years of age or older or a person with disabilities.
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7A-IV.B. HEALTH AND MEDICAL CARE MEDICAL EXPENSE DEDUCTION Policies related to health and medical care medical expenses are found in 6-II.D. The amount of the deduction will be verified following the standard verification procedures described in Part I.
Amount of Expense
PHA Policy
Health and medical care Medical expenses will be verified through:
Medical Expense Claim form completed by the family.
Written third-party documents provided by the family, such as pharmacy printouts or receipts.
The PHA will make a best effort to determine what expenses from the past are likely to continue to occur in the future. The PHA will also accept evidence of monthly payments or total payments that will be due for health and medical care expenses during the upcoming 12 months.
Written third-party verification forms, if the family is unable to provide acceptable documentation.
If third-party or document review is not possible, written family certification as to costs anticipated to be incurred during the upcoming 12 months.
In addition, the PHA must verify that:
• The household is eligible for the deduction.
• The costs to be deducted are qualified medical expenses. • The expenses are not paid for or reimbursed by any other source. • Costs incurred in past years are counted only once.
Eligible Household
The health and medical caremedical expense deduction is permitted only for households in which the head, spouse, or cohead is at least 62, or a person with disabilities. The PHA must verify that the family meets the definition of an elderly or disabled family provided in the Eligibility chapter and as described in Chapter 7 (7-IV.A.) of this plan.
Qualified Expenses
To be eligible for the health and medical caremedical expenses deduction, the costs must qualify as health and medical care medical expenses. See Chapter 6 (6-II.D.) for the PHA’s policy on what counts as a health and medical care medical expense.
Unreimbursed Expenses
To be eligible for the health and medical caremedical expenses deduction, the costs must not be reimbursed by another source.
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PHA Policy
The family will be required to certify that the health and medical care expenses are not paid or reimbursed to the family from any source. If health and medical care expenses are verified through a third party, the third party must certify that the expenses are not paid or reimbursed from any other source.
Expenses Incurred in Past Years
PHA Policy
When anticipated costs are related to on-going payment of medical bills incurred in past years, the PHA will verify:
The anticipated repayment schedule
The amounts paid in the past, and
Whether the amounts to be repaid have been deducted from the family’s annual income in past years
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7A-IV.C. DISABILITY ASSISTANCE EXPENSES
Policies related to disability assistance expenses are found in 6-II.E. The amount of the deduction will be verified following the standard verification procedures described in Part I.
Amount of Expense
Attendant Care
PHA Policy
The PHA will accept written third-party documents provided by the family.
If family-provided documents are not available, the PHA will provide a third-party verification form directly to the care provider requesting the needed information.
Expenses for attendant care will be verified through:
Written third-party documents provided by the family, such as receipts or cancelled checks.
Third-party verification form signed by the provider, if family-provided documents are not available.
If third-party verification is not possible, written family certification as to costs anticipated to be incurred for the upcoming 12 months.
Auxiliary Apparatus
PHA Policy
Expenses for auxiliary apparatus will be verified through:
Written third-party documents provided by the family, such as billing statements for purchase of auxiliary apparatus, or other evidence of monthly payments or total payments that will be due for the apparatus during the upcoming 12 months.
Third-party verification form signed by the provider, if family-provided documents are not available.
If third-party verification is not possible, written family certification of estimated apparatus costs for the upcoming 12 months.
In addition, the PHA must verify that:
• The family member for whom the expense is incurred is a person with disabilities (as described in 7-II.F above).
• The expense permits a family member, or members, to work (as described in 6-II.E.). • The expense is not reimbursed from another source (as described in 6-II.E.). © Copyright 2024 Nan McKay & Associates, Inc.
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Family Member is a Person with Disabilities
To be eligible for the disability assistance expense deduction, the costs must be incurred for attendant care or auxiliary apparatus expense associated with a person with disabilities. The PHA will verify that the expense is incurred for a person with disabilities (See 7-II.F.).
Family Member(s) Permitted to Work
The PHA must verify that the expenses claimed actually enable a family member, or members, (including the person with disabilities) to work.
PHA Policy
The PHA will request third-party verification from a rehabilitation agency or knowledgeable medical professional indicating that the person with disabilities requires attendant care or an auxiliary apparatus to be employed, or that the attendant care or auxiliary apparatus enables another family member, or members, to work (See 6-II.E.).
This documentation may be provided by the family.
If third-party verification has been attempted and is either unavailable or proves unsuccessful, the family must certify that the disability assistance expense frees a family member, or members (possibly including the family member receiving the assistance), to work.
Unreimbursed Expenses
To be eligible for the disability expenses deduction, the costs must not be reimbursed by another source.
PHA Policy
The family will be required to certify that attendant care or auxiliary apparatus expenses are not paid by or reimbursed to the family from any source. © Copyright 2024 Nan McKay & Associates, Inc.
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7A-IV.D. CHILDCARE EXPENSES
Policies related to childcare expenses are found in Chapter 6 (6-II.F). The amount of the deduction will be verified following the standard verification procedures described in Part I of this chapter. In addition, the PHA must verify that:
• The child is eligible for care (12 or younger).
• The costs claimed are not reimbursed.
• The costs enable a family member to work, actively seek work, or further their education. • The costs are for an allowable type of childcare.
• The costs are reasonable.
Eligible Child
To be eligible for the childcare deduction, the costs must be incurred for the care of a child under the age of 13. The PHA will verify that the child being cared for (including foster children) is under the age of 13 (See 7-II.C.).
Unreimbursed Expense
To be eligible for the childcare deduction, the costs must not be reimbursed by another source.
PHA Policy
The family (and the care provider) will be required to certify that the childcare expenses are not paid or reimbursed to the family from any source.
Pursuing an Eligible Activity
The PHA must verify that the family member(s) that the family has identified as being enabled to seek work, pursue education, or be gainfully employed, are actually pursuing those activities.
PHA Policy
The PHA will verify information about how the schedule for the claimed activity relates to the hours of care provided, the time required for transportation, the time required for study (for students), the relationship of the family member(s) to the child, and any special needs of the child that might help determine which family member is enabled to pursue an eligible activity.
Seeking Work
Whenever possible the PHA will use documentation from a state or local agency that monitors work-related requirements (e.g., welfare or unemployment). In such cases the PHA will request family-provided verification from the agency of the member’s job seeking efforts to date, and require the family to submit to the PHA any reports provided to the other agency.
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In the event third-party verification is not available, the PHA will provide the family with a form on which the family member must record job search efforts. The PHA will review this information at each subsequent reexamination for which this deduction is claimed.
Furthering Education
The PHA will request third-party documentation to verify that the person permitted to further their education by the childcare is enrolled and provide information about the timing of classes for which the person is registered. The documentation may be provided by the family.
Gainful Employment
The PHA will seek third-party verification of the work schedule of the person who is permitted to work by the childcare. In cases in which two or more family members could be permitted to work, the work schedules for all relevant family members may be verified. The documentation may be provided by the family.
Allowable Type of Childcare
The type of care to be provided is determined by the family, but must fall within certain guidelines, as discussed in Chapter 6.
PHA Policy
The PHA will verify that the type of childcare selected by the family is allowable, as described in Chapter 6 (6-II.F).
The PHA will verify that the fees paid to the childcare provider cover only childcare costs (e.g., no housekeeping services or personal services) and are paid only for the care of an eligible child (e.g., prorate costs if some of the care is provided for ineligible family members).
The PHA will verify that the childcare provider is not an assisted family member.
Verification will be made through the head of household’s declaration of family members who are expected to reside in the unit.
Reasonableness of Expenses
Only reasonable childcare costs can be deducted.
PHA Policy
The actual costs the family incurs will be compared with the PHA’s established standards of reasonableness for the type of care in the locality to ensure that the costs are reasonable.
If the family presents a justification for costs that exceed typical costs in the area, the PHA will request additional documentation, as required, to support a determination that the higher cost is appropriate.
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EXHIBIT 7A-1: SUMMARY OF DOCUMENTATION REQUIREMENTS
FOR NONCITIZENS [HCV GB, pp. 5-9 and 5-10]
• All noncitizens claiming eligible status must sign a declaration of eligible immigrant status on a form acceptable to the PHA.
• Except for persons 62 or older, all noncitizens must sign a verification consent form • Additional documents are required based upon the person's status.
Elderly Noncitizens
• A person 62 years of age or older who claims eligible immigration status also must provide proof of age such as birth certificate, passport, or documents showing receipt of SS old-age benefits.
All other Noncitizens
• Noncitizens that claim eligible immigration status also must present the applicable USCIS document. Acceptable USCIS documents are listed below.
• Form I-551 Alien Registration Receipt
Card (for permanent resident aliens)
• Form I-94 Arrival-Departure Record
annotated with one of the following:
• “Admitted as a Refugee Pursuant to
Section 207”
• “Section 208” or “Asylum”
• “Section 243(h)” or “Deportation
stayed by Attorney General”
• “Paroled Pursuant to Section 221
(d)(5) of the USCIS”
• Form I-94 Arrival-Departure Record with
no annotation accompanied by:
• A final court decision granting asylum
(but only if no appeal is taken);
• A letter from a USCIS asylum officer
granting asylum (if application is filed
on or after 10/1/90) or from a USCIS
district director granting asylum
(application filed before 10/1/90);
• A court decision granting withholding
of deportation; or
• A letter from an asylum officer
granting withholding or deportation
(if application filed on or after
10/1/90).
• Form I-688 Temporary Resident Card
annotated “Section 245A” or Section
210”.
Form I-688B Employment Authorization Card
annotated “Provision of Law 274a. 12(11)” or
“Provision of Law 274a.12”.
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• A receipt issued by the USCIS indicating that an application for issuance of a replacement document in one of the above listed categories has been made and the applicant’s entitlement to the document has been verified; or
• Other acceptable evidence. If other documents are determined by the USCIS to constitute acceptable evidence of eligible immigration status, they will be announced by notice published in the Federal Register
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Chapter 7.B.
VERIFICATION
UNDER HOTMA 102/104 [24 CFR 982.516, 24 CFR 982.551, 24 CFR 5.230, Notice PIH 2023-27]
INTRODUCTION
This chapter is applicable upon the PHA’s HOTMA 102/104 compliance date. Prior to this date, the PHA will follow policies as outlined in Chapter 7.A. of the model policy.
The PHA must verify all information that is used to establish the family’s eligibility and level of assistance and is required to obtain written authorization from the family in order to collect the information. Applicants and program participants must cooperate with the verification process as a condition of receiving assistance. The PHA must not pass on the cost of verification to the family.
The PHA must follow the verification guidance provided by HUD in Notice PIH 2023-27 and any subsequent guidance issued by HUD. This chapter summarizes those requirements and provides supplementary PHA policies.
Part I describes the general verification process. Part II provides more detailed requirements related to family information. Part III provides information on income and assets, and Part IV covers mandatory deductions.
Verification policies, rules and procedures will be modified as needed to accommodate persons with disabilities. All information obtained through the verification process will be handled in accordance with the records management policies of the PHA. © Copyright 2024 Nan McKay & Associates, Inc.
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PART I: GENERAL VERIFICATION REQUIREMENTS
7-I.A. FAMILY CONSENT TO RELEASE OF INFORMATION [24 CFR 982.516; 24 CFR 982.551; CFR
5.230; and Notice PIH 2023-27]
Consent Forms
The family must supply any information that the PHA or HUD determines is necessary to the administration of the program and must consent to PHA verification of that information [24 CFR 982.551]. All adult family members must sign consent forms as needed to collect information relevant to the family’s eligibility and level of assistance. While PHAs must use form HUD-9886- A, this form does not release all the information necessary to the administration of the program. The PHA must also develop its own release forms to cover all other necessary information.
Form HUD-9886-A [24 CFR 5.230(b)(1), b(2), (c)(4), and (c)(5); and Notice PIH 2023-27] All adult applicants and participants sign form HUD-9886-A, Authorization for Release of Information. All adult family members (and the head and spouse/cohead, regardless of age) are required to sign the Form HUD-9886-A at admission. Participants, prior to January 1, 2024, signed and submitted Form HUD-9886-A at each annual reexamination. HOTMA eliminated this requirement and instead required that the Form HUD-9886-A be signed only once. On or after January 1, 2024 (regardless of the PHA’s HOTMA compliance date), current program participants must sign and submit a new Form HUD-9886-A at their next interim or annual reexamination. This form will only be signed once. Another Form HUD-9886-A will not be submitted to the PHA except under the following circumstances:
• When any person 18 years or older becomes a member of the family; • When a current member of the family turns 18; or
• As required by HUD or the PHA in administrative instructions.
The PHA has the discretion to establish policies around when family members must sign consent forms when they turn 18. PHAs must establish these policies stating when family members will be required to sign consent forms at intervals other than at reexamination.
PHA Policy
Family members turning 18 years of age between annual recertifications will be notified in writing that they are required to sign the required Consent to the Release of Information Form HUD-9886-A prior to the family’s next annual or interim reexamination, whichever is earlier.
The purpose of form HUD-9886-A is to facilitate automated data collection and computer matching from specific sources and provides the family's consent only for the specific purposes listed on the form. HUD and the PHA may collect information from State Wage Information Collection Agencies (SWICAs) and current and former employers of adult family members. Only HUD is authorized to collect information directly from the Internal Revenue Service (IRS) and the Social Security Administration (SSA).
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The PHA may obtain any financial record from any financial institution, as the terms financial record and financial institution are defined in the Right to Financial Privacy Act (12 U.S.C. 3401), whenever the PHA determines the record is needed to determine an applicant’s or participant’s eligibility for assistance or level of benefits [24 CFR 5.230(c)(4)].
The executed form will remain effective until the family is denied assistance, assistance is terminated, or the family provides written notification to the PHA to revoke consent.
Penalties for Failing to Consent [24 CFR 5.232]
If any family member who is required to sign a consent form fails to do so, the PHA must deny admission to applicants and terminate assistance of participants. The family may request an informal review (applicants) or informal hearing (participants) in accordance with PHA procedures.
However, this does not apply if the applicant, participant, or any member of their family, revokes their consent with respect to the ability of the PHA to access financial records from financial institutions, unless the PHA establishes a policy that revocation of consent to access financial records will result in denial of admission or termination of assistance [24 CFR 5.232(c)].
PHAs may not process interim or annual reexaminations of income without the family’s executed consent forms.
PHA Policy
The PHA has established a policy that revocation of consent to access financial records will result in denial of admission or termination of assistance in accordance with PHA policy.
In order for a family to revoke their consent, the family must provide written notice to the PHA.
Within 10 business days of the date the family provides written notice, the PHA will send the family a notice acknowledging receipt of the request and explaining that revocation of consent will result in denial or termination of assistance, as applicable. At the same time, the PHA will notify their local HUD office. © Copyright 2024 Nan McKay & Associates, Inc.
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7B-I.B. USE OF OTHER PROGRAMS’ INCOME DETERMINATIONS [24 CFR 5.609(c)(3) and Notice PIH 2023-27]
PHAs may, but are not required to, determine a family’s annual income, including income from assets, prior to the application of any deductions, based on income determinations made within the previous 12-month period, using income determinations from means-tested federal public assistance programs. PHAs are not required to accept or use determinations of income from other federal means-tested forms of assistance. If the PHA adopts a policy to accept this type of verification, the PHA must establish in policy when they will accept Safe Harbor income determinations and from which programs. PHAs must also create policies that outline the course of action when families present multiple verifications from the same or different acceptable Safe Harbor programs.
Means-tested federal public assistance programs include:
• Temporary Assistance for Needy Families (TANF) (42 U.S.C. 601, et seq.); • Medicaid (42 U.S.C. 1396 et seq.);
• Supplemental Nutrition Assistance Program (SNAP) (42 U.S.C. 2011 et seq.); • Earned Income Tax Credit (EITC) (26 U.S.C. 32);
• Low-Income Housing Credit (LIHTC) program (26 U.S.C. 42); • Special Supplemental Nutrition Program for Woman, Infants, and Children (WIC) (42 U.S.C. 1786);
• Supplemental Security Income (SSI) (42 U.S.C. 1381 et seq.); • Other programs administered by the HUD Secretary;
• Other means-tested forms of federal public assistance for which HUD has established a memorandum of understanding; and
• Other federal benefit determinations made in other forms of means-tested federal public assistance that the Secretary determines to have comparable reliability and announces through the Federal Register.
If the PHA elects to use the annual income determination from one of the above-listed forms of means-tested federal public assistance, then they must obtain the income information by means of a third-party verification. The third-party verification must state the family size, must be for the entire family, and must state the amount of the family’s annual income. The annual income need not be broken down by family member or income type. Annual income includes income earned from assets, therefore when using Safe Harbor to verify a family’s income, PHAs will neither further inquire about a family’s net family assets, nor about the income earned from those assets, except with respect to whether or not the family owns assets that exceed the asset limitation in 24 CFR 5.618. The Safe Harbor documentation will be considered acceptable if any of the following dates fall into the 12-month period prior to the receipt of the documentation by the PHA:
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• Income determination effective date;
• Program administrator’s signature date;
• Family’s signature date;
• Report effective date; or
• Other report-specific dates that verify the income determination date.
The only information that PHAs are permitted to use to determine income under this method is the total income determination made by the federal means-tested program administrator.
Other federal programs may provide additional information about income inclusions and exclusions in their award letters; however, these determinations and any other information must not be considered by the PHA. PHAs are not permitted to mix and match Safe Harbor income determinations and other income verifications.
If the PHA is unable to obtain Safe Harbor documentation or if the family disputes the other program’s income determination, the PHA must calculate the family’s annual income using traditional methods as outlined in Notice PIH 2023-27 and this chapter.
If the PHA uses a Safe Harbor determination to determine the family’s income, the family is obligated to report changes in income that meet the PHA’s reporting requirement and occur after the effective date of the transaction.
The amounts of unreimbursed reasonable attendant care expenses and child-care expenses deducted from a family’s annual income, except for when a family is approved for a child-care expense hardship exemption, must still be capped by the amount earned by any family member who is enabled to work as a result of the expense. PHAs are therefore required to obtain thirdparty verification of the applicable employment income and cap the respective expense deductions accordingly.
PHA Policy
The Safe Harbor documentation will not be accepted for New Admissions and Interims.
Safe Harbor documentation may be used at Annual Recertifications only if it accurately reflects household’s total income from all sources.
When available and applicable, the PHA will accept other programs’ Safe Harbor determinations of income at annual reexamination to determine the family’s total annual income.
The PHA will confirm with the family that all income listed is complete and accurate before accepting a Safe Harbor determination from another program. The income information must reflect the family’s full actual income, regardless of exclusions allowed by the other program. The PHA reserves the right to obtain independent third-party verification of income whenever the Safe Harbor documentation submitted by a family does not fully or conclusively establish the household’s total income. © Copyright 2024 Nan McKay & Associates, Inc.
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The PHA will still require third-party verification of all deductions such as the health and medical care expense or childcare expense deductions. Further, if the family is eligible for and claims the disability assistance expense or childcare expense deductions, where applicable, the PHA will obtain third-party verification of the amount of employment income of the individual(s) enabled to work in order to cap the respective expenses as required.
Prior to using any Safe Harbor determination from another program, the PHA will ask the family if they agree with the income amounts listed. If the family disputes the income amounts on the Safe Harbor determination, the PHA will obtain third-party verification of all sources of income and assets (as applicable).
The PHA will not accept other programs’ determinations of income for any new admission or interim reexamination.
With the exception of income determinations made under the Low-Income Housing Tax Credit (LIHTC) program, the PHA will accept Safe Harbor determinations from any of the programs listed above.
In order to be acceptable, the income determination must:
Be dated within 12 months of the dates listed above;
State the family size
Be for the entire family (i.e., the family members listed in the documentation must match the family’s composition in the assisted unit, except for household members); and
Must state the amount of the family’s actual annual income from all sources.
The determination need not list each source of income individually as long as the total represents the complete and accurate amount. If the PHA does not receive any acceptable income determination documentation or is unable to obtain documentation, then the PHA will revert to third-party verification of income for the family.
When families present multiple verifications from the same or different acceptable Safe Harbor programs, the PHA will use the most recent income determination, unless the family presents acceptable evidence that the PHA should consider an alternative verification from a different Safe Harbor source.
When the PHA uses a Safe Harbor income determination from another program, and the family’s income subsequently changes, the family is required to report the change to the PHA. Depending on when the change occurred, the change may or may not impact the PHA’s calculation of the family’s total annual income. Changes that occur between the time the PHA receives the Safe Harbor documentation and the effective date of the family’s annual reexamination will not be considered. If the family has a change in income that occurs after the annual reexamination effective date, the PHA will conduct an interim reexamination if the change meets the requirements for performing an © Copyright 2024 Nan McKay & Associates, Inc.
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interim reexamination as outlined in Chapter 11. In this case, the PHA will use thirdparty verification to verify the change. © Copyright 2024 Nan McKay & Associates, Inc.
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7B-I.C. STREAMLINED INCOME DETERMINATIONS [24 CFR 960.257(c); Notice PIH 2023-27] HUD permits PHAs to streamline the income determination process for family members with fixed sources of income. While third-party verification of all income sources must be obtained during the intake process and every three years thereafter, in the intervening years, the PHA may determine income from fixed sources by applying a verified cost of living adjustment (COLA) or other inflationary adjustment factor. Streamlining policies are optional. The PHA may, however, obtain third-party verification of all income, regardless of the source. Further, upon request of the family, the PHA must perform third-party verification of all income sources.
Fixed sources of income include Social Security and SSI benefits, pensions, annuities, disability or death benefits, and other sources of income subject to a COLA or rate of interest. The determination of fixed income may be streamlined even if the family also receives income from other non-fixed sources.
Two streamlining options are available, depending upon the percentage of the family’s income that is received from fixed sources.
When 90 percent or more of a family’s unadjusted income is from fixed sources, the PHA may apply the inflationary adjustment factor to the family’s fixed-income sources, provided that the family certifies both that 90 percent or more of their unadjusted income is fixed and that their sources of fixed income have not changed from the previous year. Sources of non-fixed income are not required to be adjusted and must not be adjusted by a COLA, but PHAs may choose to adjust sources of non-fixed income based on third-party verification. PHAs have the discretion to either adjust the non-fixed income or carry over the calculation of non-fixed income from the first year to years two and three.
When less than 90 percent of a family’s unadjusted income consists of fixed income, PHAs may apply a COLA to each of the family’s sources of fixed income. PHAs must determine all other income using standard verification requirements as outlined in Notice PIH 2023-27.
PHA Policy
When the PHA does not use a Safe Harbor income determination from a federal assistance program to determine the family’s annual income as outlined above, then PHA will use a streamlined income determinations where applicable.
Regardless of the precent of a family’s unadjusted income from fixed income sources:
The PHA will streamline the annual reexamination process by applying the verified COLA/inflationary adjustment factor to fixed-income sources.
The family will be required to sign a self-certification stating that their sources of fixed income have not changed from the previous year.
The PHA will document in the file how the determination that a source of income was fixed was made.
If the family’s sources of fixed income have changed from the previous year, the PHA will obtain third-party verification of any new sources of fixed income. © Copyright 2024 Nan McKay & Associates, Inc.
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All other income will be verified using third-party verification as outlined in Notice PIH 2023-27 and Chapter 7 of this policy.
In the following circumstances, regardless of the percentage of income received from fixed sources, the PHA will obtain third-party verification as outlined in Notice PIH 2023- 27 and Chapter 7 of this policy:
Of all assets when net family assets exceed the HUD-published threshold ($50,000 for 2024, and $51,600 for 2025);
Of all deductions and allowances from annual income;
If a family member with a fixed source of income is added; If verification of the COLA or rate of interest is not available; During the intake process and at least once every three years thereafter. 7B-I.D. VERIFICATION HIERARCHY [Notice PIH 2023-27]
When the PHA does not use a streamlined determination of income or an income determination from a means-tested federal assistance program, HUD requires the PHA to obtain third-party verification of:
• Reported family annual income;
• The value of net family assets when the net value exceeds the HUD-published threshold, as listed in HUD’s Inflation-Adjusted Values tables ($50,000 for 2024, and $51,600 for 2025); • Expenses related to deductions from annual income; and • Other factors that affect the determination of adjusted income.
HUD mandates the use of the EIV system and offers administrative guidance on the use of other methods to verify family information and specifies the circumstances in which each method will be used. In general HUD requires the PHA to use the most reliable form of verification that is available and to document the reasons when the PHA uses a lesser form of verification.
In order of priority, the forms of verification that the PHA will use are:
HUD developed a hierarchy that described verification documentation from most acceptable to least acceptable. The PHA must demonstrate efforts to obtain third party verification prior to accepting self-certification except instances when self-certification is explicitly allowed.
In order of priority, the hierarchy is:
• Highest: Level 6: Up-front Income Verification (UIV) using HUD’s Enterprise Income Verification (EIV) system
• Highest: Level 5: Up-front Income Verification (UIV) using a non-EIV system • High: Level 4:
- Written third-party verification from the source, also known as “family-provided verification”
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- Or EIV plus self-certification
• Medium: Level 3: Written third-party verification form • Medium: Level 2: Oral third-party verification
• Low: Level 1: Self-certification (not third-party verification) Each of the verification methods is discussed in subsequent sections below.
File Documentation
The PHA must document in the file how the figures used in income and rent calculations were determined. All verification attempts, information obtained, and decisions reached during the verification process will be recorded in the family’s file in sufficient detail to demonstrate that the PHA has followed all of the verification policies set forth in this plan. The record should be sufficient to enable a staff member or HUD reviewer to understand the process followed and conclusions reached.
7B-I.E. LEVEL 5 AND 6 VERIFICATIONS: UP-FRONT INCOME VERIFICATION (UIV) Up-front income verification (UIV) refers to the PHA’s use of the verification tools available from independent sources that maintain computerized information about earnings and benefits for a number of individuals. PHAs may use UIV sources before or during a family reexamination.
UIV will be used to the extent that these systems are available to the PHA.
There may be legitimate differences between the information provided by the family and UIVgenerated information. If the family disputes the accuracy of UIV data, no adverse action can be taken until the PHA has independently verified the UIV information and the family has been granted an opportunity to contest any adverse findings through the informal review/hearing process of the PHA.
HUD’s Enterprise Income Verification (EIV) System (Mandatory) PHAs must use HUD’s EIV system in its entirety as a third-party source to verify tenant employment and income information during annual and streamlined reexaminations of family composition and income in accordance with 24 CFR 5.236 and Notice PIH 2023-27.
HUD’s EIV system contains data showing earned income, unemployment benefits, social security benefits, and SSI benefits for participant families.
The income validation tool (IVT) in EIV provides projections of discrepant income for wages, unemployment compensation, and SSA benefits pursuant to HUD’s data sharing agreements with other departments.
The following policies apply to the use of HUD’s EIV system.
EIV Income Report
PHAs are required to obtain an EIV Income report for each family any time the PHA conducts an annual reexamination. However, PHAs are not required to use the EIV Income and IVT reports:
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• At annual reexamination if the PHA used Safe Harbor verification from another means-test federal assistance program to determine the family’s income; or • During any interim reexaminations.
The EIV Income is also not available for program applicants at admission.
When required to use the EIV Income Report, in order for the report to be considered current, the PHA must pull the report within 120 days of the effective date of the annual reexamination.
The EIV Income Report may be used to verify and calculate income at annual reexamination if the family self-certifies that the amount is accurate and representative of current income. The family must be provided with the information in EIV.
PHA Policy
Except for when Safe Harbor verification from another means-tested federal assistance program is used to determine the family’s annual income, the PHA will obtain EIV income and IVT reports for all annual reexaminations for all families on a monthly basis.
The PHA will ensure that all EIV Income Reports are pulled within 120 days of the effective date of the annual reexamination.
Income reports will only be used for interim reexaminations as necessary. For example, EIV may be used to verify that families claiming zero income are not receiving income from any sources listed in EIV.
Income reports will be retained in participant files with the applicable annual documents or interim reexamination documents (if applicable) for the duration of the family’s participation.
When the PHA determines through EIV reports and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 14, Program Integrity.
New Hires Report [Notice PIH 2023-27]
The New Hires Report identifies participant families who have new employment within the last six months. The report is updated monthly.
PHAs must review this information at annual reexamination except when the PHA uses Safe Harbor verification from another means-tested federal assistance program to determine the family’s income.
PHAs that do not require families to undergo interim reexaminations for earned income increases after an interim decrease are not required to review this report between a family’s annual reexamination. If the PHA requires an interim for increases in earned income after an interim decrease, then the PHA must review the report quarterly after the family’s interim decrease.
PHA Policy
In accordance with PHA policies in Chapter 11, the PHA does not process interim reexaminations for families who have increases in earned income. Except for instances © Copyright 2024 Nan McKay & Associates, Inc.
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in which the PHA uses Safe Harbor income determinations to determine a family’s annual income, the PHA will only review the New Hires Report at annual reexamination.
No Income Reported by HHS or SSA Report
This report is a tool for PHAs to identify participants who passed the SSA identity test, but no income information was reported by either HHS or SSA records. This scenario does not mean that the participant does not have any income. PHAs obtain written, third-party verification of any income reported by the participant. The PHA must identify in its policies and procedures when this report will be pulled [Notice PIH 2023-27].
PHA Policy
The PHA will generate the No Income Reported by HHS or SSA Report quarterly and will retain the report.
The PHA will re-verify the status of participants identified on the report quarterly. Based on the information provided by the family and in EIV, the PHA may require that family members provide verifications or sign release forms in order to obtain additional verification.
When the PHA determines through this report and third-party verification that a family has concealed or under-reported income, corrective action will be taken pursuant to the policies in Chapter 14, Program Integrity
EIV Identity Verification Report
The EIV system verifies tenant identities against SSA records. These records are compared to HUD data for a match on social security number, name, and date of birth.
PHAs are required to use EIV’s Identity Verification Report on a monthly basis to improve the availability of income information in EIV [Notice PIH 2023-27].
When identity verification for a participant fails, a message will be displayed within the EIV system and no income information will be displayed.
PHA Policy
The PHA will identify participants whose identity verification has failed by reviewing EIV’s Identity Verification Report on a monthly basis.
The PHA will attempt to resolve discrepancies by obtaining appropriate documentation from the participant. When the PHA determines that discrepancies exist as a result of PHA errors such as spelling errors or incorrect birth dates, it will correct the errors promptly.
Deceased Tenants Reports [Notice PIH 2012-4 and Notice PIH 2023-27] The Deceased Tenant Report identifies residents that have been reported by the SSA as deceased. The PHA is required to review the report at least quarterly.
PHA Policy
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The PHA will review the Deceased Tenants Report on a monthly basis.
When the Deceased Tenants Report identifies an individual as being deceased, PHAs must immediately send a letter to the head of household or emergency contact person (if the head of household is deceased and there is no other adult household member) to confirm the death of the listed household member. The PHA must notify the owner in writing of the deceased head of household.
PHAs may list the EOP as the last day of the month in which the death occurred. The landlord is entitled to receive the full HAP amount for the month in which the tenant death occurred.
PHA Policy
The PHA will list the EOP as the last day of the month in which the death occurred. The landlord is entitled to receive the full HAP amount for the month in which the tenant death occurred.
When the only remaining household member is the live-in aide, the live-in aide is not entitled or eligible for any rental assistance or continued occupancy. The PHA may not designate the live-in aide as the new head of household or change the relation code on the Form HUD-50058.
Other EIV Reports [Notice PIH 2023-27]
The PHA is required to review the Multiple Subsidy Report at least quarterly and the Failed EIV Pre-Screening and Failed Verification (Failed SSA Identity Test) reports at least monthly.
Upfront Income Verification Using Non-HUD Systems
In addition to mandatory use of the EIV system, HUD encourages PHAs to utilize other upfront verification sources.
PHA Policy
The PHA will inform all applicants and participants of its use of the following UIV resources during the admission and reexamination process:
HUD’s EIV system
The Work Number
7B-I.F. LEVEL 4 VERIFICATION [Notice PIH 2023-27]
HUD identifies two types of Level 4 verification: written-third party verification from the source and EIV + self-certification.
EIV + Self-Certification
EIV may be used as written third-party verification and may be used to calculate income if the family agrees with the information in EIV and self-certifies that the amount is accurate and representative of current income. This practice is known as EIV + self-certification. When calculating income using this method, the PHA may use its discretion to determine which © Copyright 2024 Nan McKay & Associates, Inc.
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method of calculation is reasonable: the last four quarters combined or an average of any number of quarters. The family must be provided with the information from EIV.
PHA Policy
At annual reexamination, if the PHA is unable to use a determination of income from a means-tested federal assistance program and if there are no reported changes to an income source, the PHA will use EIV + self-certification as verification of employment income, provided the family agrees with the amounts listed in EIV.
The PHA will use an average of the last two quarters of income listed in EIV to determine income from employment. The PHA will provide the family with the information in EIV.
The family will be required to sign a self-certification stating that the amount listed in EIV is accurate and representative of current income. If the family disagrees with using only the last two quarters of income listed in EIV, because of the seasonal or otherwise fluctuating nature of a particular family member’s employment, the PHA will permit the family to sign a self-certification stating that the average of all four quarters of income listed in EIV is accurate and representative of current annual income and use that amount for calculating annual income. If the family disagrees and contends that the amount in EIV is not reflective of current income, the PHA will use written third-party verification from the source as outlined below. The PHA will not use this method of verification at new admission since EIV is not available for applicant families or at interim reexamination since the income information in EIV is not current.
Written Third-Party Verification from the Source
Written, third-party verification from the source is also known as “tenant-provided verification.” In order to qualify as written-third party verification from the source, the documents must be original or authentic and (generally) dated within 120 days of the date received by the PHA. For fixed-income sources, a statement dated within the appropriate benefit year is acceptable documentation. The PHA may use the verification obtained during an interim reexamination for an annual reexamination if there have been no other changes to annual income since the interim reexamination. Documents may be supplied by the family or received from a third-party source.
Examples of acceptable tenant-provided documents include, but are not limited to pay stubs, payroll summary reports, employer notice or letters of hire and termination, SSA benefit verification letters, bank statements, child support payment stubs, welfare benefit letters and/or printouts, and unemployment monetary benefit notices. Income tax returns with corresponding official tax forms and schedules attached and including third-party receipt of transmission for income tax return filed (i.e., tax preparer’s transmittal receipt, summary of transmittal from online source, etc.) are an acceptable form of written, third-party verification.
The PHA is required to obtain, at minimum, two current and consecutive pay stubs when calculating income using third-party verification from the source. For new income sources or when two pay stubs are not available, the PHA should determine income based on the © Copyright 2024 Nan McKay & Associates, Inc.
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information from a traditional written, third-party verification form or the best available information.
When the family disputes EIV-reported employment income, the PHA uses written third-party verification.
When verification of assets is required, PHAs are required to obtain a minimum of one statement that reflects the current balance of banking/financial accounts.
PHA Policy
In general, the PHA will use third-party verification from the source in the following circumstances:
At annual reexamination when EIV + self-certification is not used; For all new admissions; and
For all interim reexaminations.
The PHA will not use this method if the PHA is able to use an income determination from a means-tested federal assistance program or if the PHA uses EIV + selfcertification as outlined above.
In general, third-party documents provided by the family or the source must be dated within 120 days of the date received by the PHA. However, for fixed-income sources, a statement dated within the appropriate benefit year is acceptable documentation.
The PHA may reject documentation provided by the family if the document is not an original, if the document appears to be forged, or if the document is altered, mutilated, or illegible. If the PHA determines that third-party documents provided by the family are not acceptable, the PHA will explain the reason to the family and request additional documentation from the family or will use a lower form of verification such as a written third-party verification form.
When verification of assets held by a banking or financial institution is required, the PHA will obtain one statement that reflects the current balance of the account. If the provided bank statement shows unusually large deposits, unexplained transfers to or from other accounts, or any irregularities that require clarification PHA may request additional bank statements.
When pay stubs are used, the PHA will require the family to provide the two most current, consecutive pay stubs. At the PHA’s discretion, if additional paystubs are needed due to the family’s circumstances (e.g., sporadic income, fluctuating schedule, etc.), the PHA may request additional paystubs or a payroll record. © Copyright 2024 Nan McKay & Associates, Inc.
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7B-I.G. LEVEL 3 VERIFICATION: WRITTEN, THIRD-PARTY FORM [Notice PIH 2023 -27] This type of verification is a form developed by the PHA and used uniformly for all families when needed to collect information from a third-party source. This is known as “traditional third-party verification.” PHAs send a PHA-developed form directly to the third-party source by mail, fax, or email and the source completes the form by hand (in writing or typeset).
The PHA may use this method when higher forms are unavailable or are rejected by the PHA or when the family is unable to provide acceptable verification. The PHA may skip this level of verification and may instead substitute oral third-party verification before moving to selfcertification.
PHA Policy
Typically, the PHA will attempt to send written third-party verification forms to the verification source whenever higher forms of verification are unavailable.
However, on a case-by-case basis, the PHA may choose to obtain oral third-party verification without first attempting, and in lieu of, a written-third party verification form.
7B.I.H. LEVEL 2: ORAL THIRD-PARTY VERIFICATION [Notice PIH 2023-27] For third-party oral verification, PHAs contact sources, identified by UIV techniques or by the family, by telephone or in person.
Third-party oral verification may be used when requests for written third-party verification forms have not been returned within a reasonable time—e.g., 10 business days.
PHAs must document in the file the date and time of the telephone call or visit, the name of the person contacted, the telephone number, as well as the information confirmed.
The PHA may skip this level of verification if they attempted written third-party verification via a form and the source did not respond and move directly to self-certification.
PHA Policy
In general, the PHA will attempt to obtain written third-party verification via a form from the verification source. If written third-party verification forms are not returned within 10 business days, the PHA will accept self-certification from the family without attempting to obtain oral third-party verification.
However, if the PHA chooses to obtain oral third-party verification, the PHA will document in the file the date and time of the telephone call or visit, the name of the person contacted and the telephone number, as well as the information confirmed. © Copyright 2024 Nan McKay & Associates, Inc.
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When Third-Party Verification is Not Required [Notice PIH 2023-27] Third-party verification may not be available in all situations. HUD has acknowledged that it may not be cost-effective or reasonable to obtain third-party verification of income, assets, or expenses when these items would have a minimal impact on the family’s total tenant payment.
PHA Policy
If the family cannot provide original documents, the PHA will pay the service charge required to obtain third-party verification, unless it is not cost effective in which case a self-certification will be acceptable as the only means of verification. The cost of verification will not be passed on to the family.
The cost of postage and envelopes to obtain third-party verification of income, assets, and expenses is not an unreasonable cost [VG, p. 18].
Primary Documents
Third-party verification is not required when legal documents are the primary source, such as a birth certificate or other legal documentation of birth.
Imputed Assets
HUD permits PHAs to accept a self-certification from a family as verification of assets disposed of for less than fair market value [HCV GB, p. 5-28].
PHA Policy
The PHA will accept a self-certification from a family as verification of assets disposed of for less than fair market value.
Value of Assets and Asset Income [24 CFR 982.5169(a)]
For families with net assets totaling $5,000 or less, the PHA may accept the family’s declaration of asset value and anticipated asset income. However, the PHA is required to obtain third-part verification of all assets regardless of the amount during the intake process and at least every three years thereafter.
PHA Policy
For families with net assets totaling $5,000 or less, the PHA will accept the family’s selfcertification of the value of family assets and anticipated asset income when applicable.
The family’s declaration must show each asset and the amount of income expected from that asset. All family members 18 years of age and older must sign the family’s declaration.
The PHA will use third-party documentation for assets as part of the intake process, whenever a family member is added to verify the individual’s assets, and every three years thereafter.
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7B-I.I. LEVEL 1: NON-THIRD-PARTY VERIFICATION TECHNIQUE: SELF-CERTIFICATION [Notice PIH 2023-27]
Non-third-party verification consists of a signed statement of reported income and/or expenses. This verification method should be used as a last resort when the PHA has not been successful in obtaining information via all other required verification techniques.
Self-certification, however, is an acceptable form of verification when:
• A source of income is fully excluded
• Net family assets are less than or equal to the HUD-published threshold (total $50,000 for 2024, and $51,600 for 2025) and the PHA has adopted a policy to accept self certification • The family declares that they do not have any present ownership in any real property • A family reports zero income;
• A family states that they have non-recurring income that will not be repeated in the coming year; and/or
• The PHA has adopted a policy to implement streamlined vertification for fixed sources of income (See Chapter 11)
When the PHA was required to obtain third-party verification but instead relies selfcertification, the family’s file must be documented to explain why third-party verification was not available.
HUD does not require that a self-certification be notarized; however, HUD recommends including language on any self-certification to ensure the certifier understands the consequences of knowingly providing false information.
PHA Policy
When information cannot be verified by a third party or by review of documents, family members will be required to submit self-certifications attesting to the accuracy of the information they have provided to the PHA.
The PHA may require a family to certify that a family member does not receive a particular type of income or benefit.
The self-certification must be made in a format acceptable to the PHA and must be signed by the family member whose information or status is being verified.
All self-certifications will include the following language:
“I/We, the undersigned, certify under penalty of perjury that the information provided here is true and correct, to the best of my knowledge and recollection. WARNING:
Anyone who knowingly submits a false claim or knowingly makes a false statement is subject to criminal and/or civil penalties, including confinement for up to five years, fines, and civil and administrative penalties (18 U.S.C. 287, 1001, 1010, 1012; 31 U.S.C. 3279, 3802).”
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PART II: VERIFYING FAMILY INFORMATION
7B-II.A. VERIFICATION OF LEGAL IDENTITY
PHA Policy
The PHA will require families to furnish verification of legal identity for each household member.
Verification of Legal Identity for Adults Verification of Legal Identity for Children Certificate of birth, naturalization papers
Church issued baptismal certificate
Current, valid driver’s license or
Department of Motor Vehicles
identification card
U.S. military discharge (DD 214)
Current U.S. passport
Current government employer
identification card with picture
Certificate of birth
Adoption papers
Custody agreement
Health and Human Services ID
Certified school records
If a document submitted by a family is illegible for any reason or otherwise questionable, more than one of these documents may be required.
If none of these documents can be provided and at the PHA’s discretion, a third party who knows the person may attest to the person’s identity. The certification must be provided in a format acceptable to the PHA and must be signed by the family member whose information or status is being verified.
Legal identity will be verified for all applicants at the time of eligibility determination and in cases where the PHA has reason to doubt the identity of a person representing themselves to be a participant.
7B-II.B. SOCIAL SECURITY NUMBERS [24 CFR 5.216, Notice PIH 2023-27] The family must provide documentation of a valid Social Security number (SSN) for each member of the household, with the exception of individuals who do not contend eligible immigration status. Exemptions also include existing program participants who were at least 62 years of age as of January 31, 2010, and had not previously disclosed an SSN.
Note that an individual who previously declared to have eligible immigration status may not change their declaration for the purpose of avoiding compliance with the SSN disclosure and documentation requirements or penalties associated with noncompliance with these requirements. Nor may the head of household opt to remove a household member from the family composition for this purpose.
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The PHA must accept the following documentation as acceptable evidence of the social security number:
• An original SSN card issued by the Social Security Administration (SSA) • An original SSA-issued document, which contains the name and SSN of the individual • An original document issued by a federal, state, or local government agency, which contains the name and SSN of the individual
While PHAs must attempt to gather third-party verification of SSNs prior to admission as listed above, PHAs also have the option of accepting a self-certification and a third-party document (such as a bank statement, utility or cell phone bill, or benefit letter) with the applicant’s name printed on it to satisfy the SSN disclosure requirement if the PHA has exhausted all other attempts to obtain the required documentation. If verifying an individual’s SSN using this method, the PHA must document why the other SSN documentation was not available.
If the tenant’s SSN becomes verified in EIV, then no further verification is required. If the tenant’s SSN fails the SSA identity match, then the PHA must obtain a valid SSN card issued by the SSA or an original document issued by a federal or state government agency that contains the name of the individual and the SSN of the individual, along with other identifying information of the individual. The tenant’s assistance must be terminated if they fail to provide the required documentation.
PHA Policy
The PHA will verify an individual’s SSN in the situations described above using the method described above as a last resort when no other forms of verification of the individual’s SSN are available.
The PHA may only reject documentation of an SSN provided by an applicant or participant if the document is not an original document or if the original document has been altered, mutilated, is illegible, or appears to be forged.
PHA Policy
The PHA will explain to the applicant or participant the reasons the document is not acceptable and request that the individual obtain and submit acceptable documentation of the SSN to the PHA within 90 days.
In the case of Moderate Rehabilitation Single Room Occupancy (SRO) individuals, the required documentation must be provided within 90 calendar days from the date of admission into the program. The PHA must grant one additional 90-day extension if it determines that the applicant’s failure to comply was due to circumstances that were beyond the applicant’s control and could not have been reasonably foreseen.
PHA Policy
The PHA will grant one additional 90-day extension if needed for reasons beyond the participant’s control such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency. If the individual fails to © Copyright 2024 Nan McKay & Associates, Inc.
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comply with SSN disclosure and documentation requirements upon expiration of the provided time period, the PHA will terminate the individual’s assistance.
If an applicant family includes a child under 6 years of age who joined the household within the 6 months prior to the date of voucher issuance, an otherwise eligible family may be admitted to the program and the family must provide documentation of the child’s SSN within 90 days of the effective date of the initial HAP contract. A 90-day extension will be granted if the PHA determines that the participant’s failure to comply was due to unforeseen circumstances and was outside of the participant’s control.
PHA Policy
The PHA will grant one additional 90-day extension if needed for reasons beyond the applicant’s control, such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency.
When a participant requests to add a new household member who is at least 6 years of age, or who is under the age of 6 and has an SSN, the participant must provide the complete and accurate SSN assigned to each new member at the time of reexamination or recertification, in addition to the documentation required to verify it. The PHA may not add the new household member until such documentation is provided.
When a participant requests to add a new household member who is under the age of 6 and has not been assigned an SSN, the participant must provide the SSN assigned to each new child and the required documentation within 90 calendar days of the child being added to the household. A 90-day extension will be granted if the PHA determines that the participant’s failure to comply was due to unforeseen circumstances and was outside of the participant’s control. During the period the PHA is awaiting documentation of the SSN, the child will be counted as part of the assisted household.
PHA Policy
The PHA will grant one additional 90-day extension if needed for reasons beyond the participant’s control such as delayed processing of the SSN application by the SSA, natural disaster, fire, death in the family, or other emergency.
Social security numbers must be verified only once during continuously assisted occupancy.
PHA Policy
The PHA will verify each disclosed SSN by:
Obtaining documentation from applicants and participants that is acceptable as evidence of social security numbers
Making a copy of Scanning the original documentation submitted, returning it to the individual, and retaining a copy in the tenant electronic file.file folder Once the individual’s verification status is classified as “verified,” the PHA may, at its discretion, remove and destroy copies of documentation accepted as evidence of social security numbers. © Copyright 2024 Nan McKay & Associates, Inc.
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The retention of the EIV Summary Report or Income Report is adequate documentation of an individual’s SSN.
PHA Policy
Once an individual’s status is classified as “verified” in HUD’s EIV system, the PHA will not remove and destroy copies of documentation accepted as evidence of social security numbers.
7B-II.C. DOCUMENTATION OF AGE
A birth certificate or other official record of birth is the preferred form of age verification for all family members. For elderly family members an original document that provides evidence of the receipt of social security retirement benefits is acceptable.
PHA Policy
If an official record of birth or evidence of social security retirement benefits cannot be provided, the PHA will require the family to submit other documents that support the reported age of the family member (e.g., school records, driver's license if birth year is recorded) and to provide a self-certification.
Age must be verified only once during continuously assisted occupancy. 7B-II.D. FAMILY RELATIONSHIPS
Applicants and program participants are required to identify the relationship of each household member to the head of household. Definitions of the primary household relationships are provided in the Eligibility chapter.
PHA Policy
Family relationships are verified only to the extent necessary to determine a family’s eligibility and level of assistance. Certification by the head of household normally is sufficient verification of family relationships.
Marriage
PHA Policy
Certification by the head of household is normally sufficient verification. If the PHA has reasonable doubts about a marital relationship, the PHA will require the family to document the marriage.
A marriage certificate generally is required to verify that a couple is married.
Separation or Divorce
PHA Policy
Certification by the head of household is normally sufficient verification. If the PHA has reasonable doubts about a separation or divorce, the PHA will require the family to © Copyright 2024 Nan McKay & Associates, Inc.
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provide documentation of the divorce or separation.
A certified copy of a divorce decree, signed by a court officer, is required to document that a couple is divorced.
A copy of a court-ordered maintenance or other court record is required to document a separation.
If no court document is available, documentation from a community-based agency will be accepted.
Absence of Adult Member
PHA Policy
If an adult member who was formerly a member of the household is reported to be permanently absent, the family must provide, at a minimum, two forms of evidence to support that the person is no longer a member of the family (e.g., documentation of another address at which the person resides such as a lease, utility bill, or driver’s license).
Foster Children and Foster Adults
PHA Policy
Third-party verification from the state or local government agency responsible for the placement of the individual with the family is required. 7B-II.E. VERIFICATION OF STUDENT STATUS
General Requirements
PHA Policy
The PHA requires families to provide information about the student status of all fulltime students who are 18 years of age or older. This information will be verified only if:
The family reports full-time student status for an adult other than the head, spouse, or co-head if family member is employed.
The family reports childcare expenses to enable a family member to further their education.
The family includes an adult student enrolled in an institution of higher education.
If the full-time adult student has employment income. Verification of full-time student status includes:
• Written verification from the registrar’s office indicating enrollment for sufficient number of credits to be considered a full-time student by the educational institution. Full-time student status will be verified at each © Copyright 2024 Nan McKay & Associates, Inc.
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certification. Failure to complete the required college units will result in the loss of full-time student status.
• Head of Household will be required to complete a Notice of Student Status form at each certification.
• Certified college transcripts to verify completion of college units. • If the student has part-time enrollment status in more than one educational institution, the units may be combined to achieve full-time student status.
Restrictions on Assistance to Students Enrolled in Institutions of Higher Education This section applies only to students who are seeking assistance on their own, separately from their parents. It does not apply to students residing with parents who are seeking or receiving HCV assistance.
PHA Policy
In accordance with the verification hierarchy described in section 7-I1.B, the PHA will determine whether the student is exempt from the restrictions in 24 CFR 5.612 by verifying any one of the following exemption criteria:
The student is enrolled at an educational institution that does not meet the definition of institution of higher education in the Higher Education Act of 1965 (see section Exhibit 3-2).
The student is at least 24 years old.
The student is a veteran, as defined in section 3-II.E.
The student is married.
The student has at least one dependent child, as defined in section 3-II.E.
The student is a person with disabilities, as defined in section 3-II.E, and was receiving assistance prior to November 30, 2005.
If the PHA cannot verify at least one of these exemption criteria, the PHA will conclude that the student is subject to the restrictions on assistance at 24 CFR 5.612. In addition to verifying the student’s income eligibility, the PHA will then proceed to verify either the student’s parents’ income eligibility (see section 7-III.J) or the student’s independence from their parents (see below).
Independent Student
PHA Policy
The PHA will verify a student’s independence from their parents to determine that the student’s parents’ income is not relevant for determining the student’s eligibility by doing all of the following:
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Either reviewing and verifying previous address information to determine whether the student has established a household separate from their parents for at least one year, or reviewing and verifying documentation relevant to determining whether the student meets the U.S. Department of Education’s definition of independent student (see section 3-II.E)
Reviewing the student’s prior year income tax returns to verify the student is independent or verifying the student meets the U.S. Department of Education’s definition of independent student (see section 3-II.E)
Requesting and obtaining written certification directly from the student’s parents identifying the amount of support they will be providing to the student, even if the amount of support is $0, except in cases in which the PHA determines that the student is a vulnerable youth (see section 3-II.E) 7B-II.F. DOCUMENTATION OF DISABILITY
The PHA must verify the existence of a disability in order to allow certain income disallowances and deductions from income. The PHA is not permitted to inquire about the nature or extent of a person’s disability [24 CFR 100.202(c)]. The PHA may not inquire about a person’s diagnosis or details of treatment for a disability or medical condition. If the PHA receives a verification document that provides such information, the PHA will not place this information in the tenant file. Under no circumstances will the PHA request a participant’s medical record(s). For more information on health care privacy laws, see the Department of Health and Human Services’ website at http://www.hhs.gov/ocr/privacy/.
The above cited regulation does not prohibit the following inquiries, provided these inquiries are made of all applicants, whether or not they are persons with disabilities [VG, p. 24]:
Inquiry into an applicant’s ability to meet the requirements of ownership or tenancy Inquiry to determine whether an applicant is qualified for a dwelling available only to persons with disabilities or to persons with a particular type of disability Inquiry to determine whether an applicant for a dwelling is qualified for a priority available to persons with disabilities or to persons with a particular type of disability Inquiring whether an applicant for a dwelling is a current illegal abuser or addict of a controlled substance
Inquiring whether an applicant has been convicted of the illegal manufacture or distribution of a controlled substance
Family Members Receiving SSA Disability Benefits
Verification of the receipt of disability benefits from the Social Security Administration (SSA) is sufficient verification of disability for the purpose of qualifying for waiting list preferences (if applicable) or certain income disallowances and deductions [VG, p. 23]. © Copyright 2024 Nan McKay & Associates, Inc.
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PHA Policy
For family members claiming disability who receive disability benefits from the SSA, the PHA will attempt to obtain information about disability benefits through the HUD Enterprise Income Verification (EIV) system. If documentation from HUD’s EIV System is not available, the PHA will request the most recent (dated within the appropriate benefit year) SSA benefit verification letter from each family member claiming disability status. If the family is unable to provide the document(s), the PHA will ask the family to request a benefit verification letter by either calling SSA at 1-800-772-1213, or by requesting it from www.ssa.gov. Once the applicant or participant receives the benefit verification letter they will be required to provide it to the PHA.
Family Members Not Receiving SSA Disability Benefits
Receipt of veteran’s disability benefits, worker’s compensation, or other non-SSA benefits based on the individual’s claimed disability are not sufficient verification that the individual meets HUD’s definition of disability in 24 CFR 5.403.
PHA Policy
For family members claiming disability who do not receive disability benefits from the SSA, a knowledgeable professional must provide third-party verification that the family member meets the HUD definition of disability. See the Eligibility chapter for the HUD definition of disability. The knowledgeable professional will verify whether the family member does or does not meet the HUD definition.
7B-II.G. CITIZENSHIP OR ELIGIBLE IMMIGRATION STATUS [24 CFR 5.508] Overview
Housing assistance is not available to persons who are not citizens, nationals, or eligible immigrants. Prorated assistance is provided for "mixed families" containing both eligible and ineligible persons. A detailed discussion of eligibility requirements is in the Eligibility chapter.
This verifications chapter discusses HUD and PHA verification requirements related to citizenship status.
The family must provide a certification that identifies each family member as a U.S. citizen, a U.S. national, an eligible noncitizen or an ineligible noncitizen and submit the documents discussed below for each family member. Once eligibility to receive assistance has been verified for an individual it need not be collected or verified again during continuously-assisted occupancy. [24 CFR 5.508(g)(5)]
U.S. Citizens and Nationals
HUD requires a declaration for each family member who claims to be a citizen or national. The declaration must be signed personally by any family member 18 or older and by a guardian for minors.
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The PHA may request verification of the declaration by requiring presentation of a birth certificate, United States passport or other appropriate documentation.
PHA Policy
The PHA requires all adult applicant family members to submit verification of their citizenship. All families will be notified of the requirement to submit evidence of their citizenship status when they apply. If evidence cannot reasonably be provided by the family, the PHA may accept a signed declaration from all family members as verification of citizenship, unless the PHA receives credible information indicating that an individual’s declaration may not be accurate. The PHA may utilize third party verification of citizenship if available.
Eligible Immigrants
Documents Required
All family members claiming eligible immigration status must declare their status in the same manner as citizens and nationals.
The documentation required for eligible noncitizens varies depending upon factors such as the date the person entered the U.S., the conditions under which eligible immigration status has been granted, age, and the date on which the family began receiving HUD-funded assistance.
Exhibit 7-1 at the end of this chapter summarizes documents family members must provide.
PHA Verification [HCV GB, pp. 5-3 and 5-7]
For family members aged 62 or older who claim to be eligible immigrants, proof of age is required in the manner described in 7-II.C. of this plan. No further verification of eligible immigration status is required.
For family members under the age of 62 who claim to be eligible immigrants, the PHA must verify immigration status with the United States Citizenship and Immigration Services (USCIS).
The PHA will follow all USCIS protocols for verification of eligible immigration status. © Copyright 2024 Nan McKay & Associates, Inc.
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7B-II.H. VERIFICATION OF PREFERENCE STATUS
The PHA must verify any preferences claimed by an applicant that determined placement on the waiting list.
PHA Policy
The PHA will offer a preference to any family that has been terminated from its HCV program due to insufficient program funding. The PHA will verify this preference using the PHA’s termination records.
The PHA also offers a preference for victims of domestic violence, dating violence, sexual assault, stalking, or human trafficking, as described in Section 4-III.C. To verify that applicants qualify for the preference, the PHA will follow documentation requirements outlined in Section 16-IX.D.
Displacement Preference: Families who claim they are being or have been displaced due to a disaster, government action, an eviction pursuant to the Ellis Act, Civil Code section 798.56(g) of the Mobile Home Residency Law, owner/relative occupancy from a rent controlled unit under Section 1806(a)(8) of the Santa Monica Rent Control Amendment, or owner-occupancy decontrol of a unit in a duplex or triplex must provide written verification by the displacing unit or agency of government, or by a service agency such as the Red Cross or FEMA. The PHA must also verify that the family has not yet relocated to standard replacement housing. The verification should be provided by the displacing entity.
Vulnerable Families Preference: SMHA approved referral partners are responsible for confirming that an applicant meets the criteria for the preference, which includes individuals affected by domestic violence, dating violence, sexual assault, stalking, or human trafficking. Once verified, the partner must complete the Tier 1 Form documenting the basis for the preference.
Residency PreferenceLive/Work Preference: In order to verify that an applicant is a resident, the PHA will require the following documents: rent receipts, lease, utility bills, employer or agency records, school records, driver’s licenses, or voters registration records to verify residency.
For families who have been hired to work in Santa Monica, a statement from the employer will be required. The employed family member must work at least 25 hours weekly in Santa Monica.
In order to qualify for a residential preference, homeless applicants must have become homeless in Santa Monica, must meet the definition of DedicatedPLUS and must be on the Santa Monica Service Registry.
Continuum of Care or Supportive Housing Graduates: The PHA may prioritize a limited number of current Continuum of Care program participants (“CoC graduates”) or © Copyright 2024 Nan McKay & Associates, Inc.
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tenants residing in City-funded supportive housing properties in Santa Monica (“supportive housing graduates”) who are stable and no longer require service participation to prevent them from recycling into homelessness. Eligibility for such preference must be documented by the current supportive services provider for the CoC program participant in the form indicated in Chapter 189.
Project-Based Targeting: The PHA may offer additional preferences for the PBV program or for particular PBV projects or units. Applicants for these programs must meet additional, specific eligibility requirements.
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PART III: VERIFYING INCOME AND ASSETS
Chapter 6 of this plan describes in detail the types of income that are included and excluded and how assets and income from assets are handled. Any income reported by the family must be verified. This part provides PHA policies that supplement the general verification procedures specified in Part I of this chapter.
PHA Policy
The following policies do not apply when the PHA uses a safe harbor income determination from a means-tested federal assistance program. 7B-III.A. EARNED INCOME
Tips
PHA Policy
Unless tip income is included in a family member’s W-2 by the employer or in UIV verification sources, persons who work in industries where tips are standard will be required to sign a certified estimate of tips received for the prior year or tips anticipated to be received in the coming year.
Wages
PHA Policy
When the PHA requires third-party verification of wages, for wages other than tips, the family must provide originals of the two most current, consecutive pay stubs. At the PHA’s discretion, if additional paystubs are needed due to the family’s circumstances (e.g., sporadic income, fluctuating schedule, etc.), the PHA may request additional paystubs or a payroll record.
7B-III.B. BUSINESS AND SELF EMPLOYMENT INCOME
The PHA must obtain written, third-party verification when the income type is not available in EIV. This includes income from self-employment.
PHA Policy
Business owners and self-employed persons will be required to provide:
An audited financial statement for the previous fiscal year if an audit was conducted. If an audit was not conducted, a statement of income and expenses must be submitted and the business owner or self-employed person must certify to its accuracy.
All schedules completed for filing federal and local taxes in the preceding year.
If accelerated depreciation was used on the tax return or financial statement, an accountant's calculation of depreciation expense, computed using straight-line depreciation rules.
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The PHA will provide a format for any person who is unable to provide such a statement to record income and expenses for the coming year. The business owner/self-employed person will be required to submit the information requested and to certify to its accuracy at all future reexaminations.
At any reexamination the PHA may request documents that support submitted financial statements such as manifests, appointment books, cash books, or bank statements.
If a family member has been self-employed less than three (3) months, the PHA will accept the family member's certified estimate of income and schedule an interim reexamination in three (3) months. If the family member has been self-employed for three (3) to twelve (12) months the PHA will require the family to provide documentation of income and expenses for this period and use that information to project income.
7B-III.C. PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS For policies governing streamlined income determinations for fixed sources of income, please see Chapter 11.
Social Security/SSI Benefits [Notice PIH 2023-27]
Verification requirements for Social Security (SS) and Supplemental Security Income (SSI) benefits differ for applicants and participants.
For applicants, since EIV does not contain SS or SSI benefit information, the PHA must ask applicants to provide a copy of their current SS and/or SSI benefit letter (dated within appropriate benefit year) for each family member that receives SS and/or SSI benefits. If the family is unable to provide the document or documents, the PHA should help the applicant request a benefit verification letter from SSA’s website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. The PHA must obtain the original benefit letter from the applicant, make a photocopy of the document for the file, and return the original to the family.
For participants, the PHA must obtain information through the HUD EIV system and confirm with the participants that the current listed benefit amount is correct. • If the participant agrees with the amount reported in EIV, the PHA must use the EIVreported gross benefit amount to calculate annual income from Social Security. PHAs are required to use the EIV-reported SS and SSI benefit amounts when calculating income unless the tenant disputes the EIV-reported amount. For example, an SSA benefit letter may list the monthly benefit amount as $450.80 and EIV displays the amount as $450.00. The PHA must use the EIV-reported amount unless the participant disputes the amount. • If the participant disputes the EIV-reported benefit amount, or if benefit information is not available in EIV, the PHA must request a current SSA benefit verification letter (dated within the appropriate benefit year) last 120 calendar days) from each family member that receives SS and/or SSI benefits. If the family is unable to provide the document or © Copyright 2024 Nan McKay & Associates, Inc.
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documents, the PHA should help the participant request a benefit verification letter from SSA’s website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772- 1213. The PHA must obtain the original benefit letter from the participant, make a photocopy of the document for the file, and return the original to the family.
Photocopies of social security checks or bank statements are not acceptable forms of verification for SS/SSI benefits.
7B-III.D. ALIMONY OR CHILD SUPPORT [Notice PIH 2023-27] Annual income includes “all amounts received,” not the amount that a family may be legally entitled to receive but which they do not receive. For example, a family’s child support or alimony income must be based on payments received, not the amounts to which the family is entitled by court or agency orders. A copy of a court order or other written payment agreement alone may not be sufficient verification of amounts received by a family.
PHA Policy
Verification will be obtained in the following order of priority:
Copies of the receipts and/or payment stubs for the 120 days prior to PHA request
Third-party verification form from the state or local child support enforcement agency
Third-party verification form from the person paying the support Family's self-certification of amount received
Note: Families are not required to undertake independent enforcement action 7B-III.E. NONRECURRING INCOME [Notice PIH 2023-27]
Income that will not be repeated beyond the coming year (i.e., the 12 months following the effective date of the certification), based on information provided by the family, is considered nonrecurring income and is excluded from annual income. PHAs may accept a self-certification from the family stating that the income will not be repeated in the coming year.
PHA Policy
The PHA will accept self-certification from the family stating that income will not be repeated in the coming year. However, the PHA may choose, on a case-by-case basis, to require third-party verification that income sources will not be repeated in the coming year.
7B-III.F. ASSETS AND INCOME FROM ASSETS
Net Family Assets [24 CFR 5.603]
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At admission and reexam, for families with net assets totaling less than or equal to the HUDpublished threshold listed in HUD’s current year Inflation-Adjusted Values tables ($50,000 for 2024, $51,600 for 2025)the PHA may, but is not required to, accept the family’s selfcertification that the family’s assets do not exceed $50,000 without taking any additional steps to verify the accuracy of the declaration. The declaration must include the amount of income the family expects to receive from assets which must be included in the family’s income. This includes declaring income from checking and savings accounts which, although excluded from the calculation of net family assets (because the combined value of non-necessary personal property does not exceed $50,000), may generate asset income. PHAs must clarify during the self-certification process which assets are included/excluded from net family assets.
For PHAs that choose to accept self-certification, the PHA is required to obtain third-party verification of all assets, regardless of the amount, at least once every three years.
PHAs who choose not to accept self-certifications of assets must verify all families’ assets on an annual basis.
When net family assets have a total value over the HUD-published threshold, the PHA may not rely on the family’s self-certification. Third-party verification of assets is required when net family assets exceed the HUD-published threshold.
When verification of assets is required, PHAs are required to obtain a minimum of one statement that reflects the current balance of banking/financial accounts.
PHA Policy
For families with net assets or equal to the HUD-published threshold listed in the current year’s Inflation-Adjusted Values tables, the PHA will accept the family’s selfcertification of the value of family assets and anticipated asset income. The family’s declaration must show the total amount of income expected from all assets. All family members 18 years of age and older must sign the family’s declaration. The PHA reserves the right to require additional verification in situations where the accuracy of the declaration is in question. Any income the family expects to receive from assets will be included in the family’s annual income. The family will be required to provide third-party verification of net family assets every three years.
When verification is required, in determining the value of checking or savings accounts, the PHA will use the current balance.
In determining the anticipated income from an interest-bearing checking or savings account when verification is required and the rate of return is known, the PHA will multiply the current balance of the account by the current rate of interest paid on the account. If a checking account does not bear interest, the anticipated income from the account is zero.
Self-Certification of Real Property Ownership [24 CFR 5.618(b)(2); Notice PIH 2023-27] The PHA must determine whether a family has present ownership in real property that is suitable for occupancy for purposes of determining whether the family is compliant with the © Copyright 2024 Nan McKay & Associates, Inc.
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asset limitation described in Chapters 3 and 12. At admission and reexam, the PHA may accept a self-certification from the family that the family does not have any present ownership in any real property that is suitable for occupancy. If the family declares they have present ownership in real property, the PHA must obtain third-party verification.
PHA Policy
The PHA will accept self-certification from the family that the family stating that the family does not have any present ownership in any real property. . The certification must be signed by all family members 18 years of age and older. The PHA reserves the right to require additional verification in situations where the accuracy of the declaration is in question.
If the family declares they have a present ownership in real property, the PHA will obtain third-party verification of the following factors: whether the family has the legal right to reside in the property; whether the family has effective legal authority to sell the property; and whether the property is suitable for occupancy by the family as a residence. However, in cases where a family member is a victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking the PHA will comply with confidentiality requirements under 24 CFR 5.2007 and will accept a self-certification. © Copyright 2024 Nan McKay & Associates, Inc.
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7B-III.G. NET INCOME FROM RENTAL PROPERTY
PHA Policy
The family must provide:
A current executed lease for the property that shows the rental amount or certification from the current tenant
A self-certification from the family members engaged in the rental of property providing an estimate of expenses for the coming year and the most recent IRS Form 1040 with Schedule E (Rental Income).
If schedule E was not prepared, the PHA will require the family members involved in the rental of property to provide a self-certification of income and expenses for the previous year and may request documentation to support the statement including: tax statements, insurance invoices, bills for reasonable maintenance and utilities, and bank statements or amortization schedules showing monthly interest expense.
7B-III.H. FEDERAL TAX REFUNDS OR REFUNDABLE TAX CREDITS [Notice PIH 2023-27] PHAs are not required to verify the amount of the family’s federal tax refund or refundable tax credit(s) if the family’s net assets are less than or equal to the HUD-published threshold listed in HUD’s current year Inflation-Adjusted Values tables ($50,000 for 2024, $51,600 for 2025), even in years when full verification of assets is required or if the PHA does not accept selfcertification of assets. PHAs must verify the amount of the family’s federal tax refund or refundable tax credits if the family’s net assets are greater than the HUD-published threshold. 7B-III.I. RETIREMENT ACCOUNTS
PHA Policy
The PHA will accept written third-party documents supplied by the family as evidence of the status of retirement accounts.
The type of original document that will be accepted depends upon the family member’s retirement status.
Before retirement, the PHA will accept an original document from the entity holding the account with a date that shows it is the most recently scheduled statement for the account but in no case earlier than 6 months from the effective date of the examination.
Upon retirement, the PHA will accept an original document from the entity holding the account that reflects any distributions of the account balance, any lump sums taken and any regular payments.
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After retirement, the PHA will accept an original document from the entity holding the account dated no earlier than 12 months before that reflects any distributions of the account balance, any lump sums taken and any regular payments.
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7B-III.J. INCOME FROM EXCLUDED SOURCES [Notice PIH 2023-27] A detailed discussion of excluded income is provided in Chapter 6, Part I.
HUD guidance on verification of excluded income draws a distinction between income which is fully excluded and income which is only partially excluded.
For fully excluded income, the PHA is not required to follow the verification hierarchy., For fully excluded income, the PHA is not required to document why third-party verification is not available, or report the income on the 50058. Fully excluded income is defined as income where the entire amount qualifies to be excluded from the annual income determination in accordance with 24 CFR 5.609(b) and any Federal Register notice on mandatory exclusions issued by HUD (for example, food stamps, earned income of a minor, or foster care funds).
PHAs may accept a family’s signed application or reexamination form as self-certification of fully excluded income. They do not have to require additional documentation. However, if there is any doubt that a source of income qualifies for full exclusion, PHAs have the option of requiring additional verification.
For partially excluded income, the PHA is required to follow the verification hierarchy and all applicable regulations, and to report the income on the 50058. Partially excluded income is defined as income where only a certain portion of what is reported by the family qualifies to be excluded and the remainder is included in annual income (for example, the income of an adult full-time student).
PHA Policy
The PHA will accept the family’s self-certification as verification of fully excluded income. The PHA may request additional documentation if necessary to document the income source.
The PHA will verify the source and amount of partially excluded income as described in Part 1 of this chapter.
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7B-III.K. ZERO INCOME FAMILIES [Notice PIH 2023-27]
PHAs have discretion to establish reasonable procedures to manage the risk of unreported income, such as asking families to complete a zero-income worksheet at admission or periodically after admission to determine if they have any sources of unreported income or searching any UIV sources for unreported income.
In calculating annual income, PHAs must not assign monetary value to nonmonetary in-kind donations from a food bank or similar organization received by the family [24 CFR §
5.609(b)(24)(vi)].
PHAs may accept a self-certification of zero income from the family without taking any additional steps to verify zero reported income. HUD does not require such self-certifications be notarized.
PHAs that perform zero income reviews must update local discretionary policies, procedures, and forms. Families who begin receiving income which does not trigger an interim reexamination should no longer be considered zero income even though the family’s income is not reflected on the Form HUD-50058.
PHA Policy
Families who report zero income are required to complete a written certification every 3 months as long as the family continues to report that they have no income. Families that report zero income will be required to complete a zero income checklist and worksheet and provide information regarding their means of basic sustenance, such as food, utilities, transportation, etc.
The PHA will check UIV sources and/or may request information from third-party sources to verify that certain forms of income such as unemployment benefits, TANF, SS, SSI, earned income, child support, etc., are not being received by families claiming to have zero annual income.
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7B-III.L. STUDENT FINANCIAL ASSISTANCE [24 CFR 5.609(b)(9)] The regulations under HOTMA distinguish between two categories of student financial assistance paid to both full-time and part-time students.. Any other grant-in-aid, scholarship, or other assistance amounts an individual receives for the actual covered costs charged by the institute of higher education not otherwise excluded by the federally mandated income exclusions are excluded [24 CFR 5.609(b)(9)(ii)].
PHA Policy
For a student subject to having a portion of their student financial assistance included in annual income in accordance with 24 CFR 5.609(b)(9), the PHA will request written third-party verification of both the source and the amount. Family-provided documents from the educational institution attended by the student will be requested, as well as documents generated by any other person or entity providing such assistance, as reported by the student.
In addition, the PHA will request written verification of the student’s tuition, fees, and other required charges
If the PHA is unable to obtain third-party written verification of the requested information, the PHA will pursue other forms of verification following the verification hierarchy in section 7-I.B.
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7B-III.M. PARENTAL INCOME OF STUDENTS SUBJECT TO ELIGIBILITY RESTRICTIONS If a student enrolled at an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the income of the student’s parents must be considered when determining income eligibility, unless the student is determined independent from their parents or a vulnerable youth in accordance with PHA policy [24 CFR 5.612, FR Notice 4/10/06, p. 18146, and FR Notice 9/21/16].
This provision does not apply to students residing with parents who are seeking or receiving HCV assistance. It is limited to students who are seeking or receiving assistance on their own, separately from their parents.
PHA Policy
If the PHA is required to determine the income eligibility of a student’s parents, the PHA will request an income declaration and certification of income from the appropriate parent(s) (as determined in section 3-II.E). The PHA will send the request directly to the parents, who will be required to certify to their income under penalty of perjury. The parents will be required to submit the information directly to the PHA. The required information must be submitted (postmarked) within 10 business days of the date of the PHA’s request or within any extended timeframe approved by the PHA.
The PHA reserves the right to request and review supporting documentation at any time if it questions the declaration or certification. Supporting documentation may include, but is not limited to, Internal Revenue Service (IRS) tax returns, consecutive and original pay stubs, bank statements, pension benefit statements, benefit award letters, and other official and authentic documents from a federal, state, or local agency. © Copyright 2024 Nan McKay & Associates, Inc.
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PART IV: VERIFYING MANDATORY DEDUCTIONS
7B-IV.A. DEPENDENT AND ELDERLY/DISABLED HOUSEHOLD DEDUCTIONS The dependent and elderly/disabled family deductions require only that the PHA verify that the family members identified as dependents or elderly/disabled persons meet the statutory definitions. No further verifications are required.
Dependent Deduction
See Chapter 6 for a full discussion of this deduction. The PHA must verify that:
• Any person under the age of 18 for whom the dependent deduction is claimed is not the head, spouse, or cohead of the family and is not a foster child • Any person aged 18 or older for whom the dependent deduction is claimed is not a foster adult or live-in aide, and is a person with a disability or a full-time student Elderly/Disabled Family Deduction
See Eligibility chapter for a definition of elderly and disabled families and Chapter 6 for a discussion of the deduction. The PHA must verify that the head, spouse, or cohead is 62 years of age or older or a person with disabilities.
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7B-IV.B. HEALTH AND MEDICAL CARE EXPENSE DEDUCTION
Policies related to medical expenses are found in Chapter 6. The amount of the deduction will be verified following the standard verification procedures described in Part I.
The PHA must comply with the Health Insurance Portability and Accountability Act (HIPAA) (Pub. L. 104-191, 110 Stat. 1936) and the Privacy Act of 1974 (Pub. L. 93-579, 88 Stat. 1896) when requesting documentation to determine unreimbursed health and medical care expenses. The PHA may not request documentation beyond what is sufficient to determine anticipated health and medical care costs. Before placing bills and documentation in the tenant file, the PHA must redact all personally identifiable information [FR Notice 2/14/23].
Amount of Expense
PHA Policy
Medical expenses will be verified through:
Medical Expense Claim form completed by the family.
Written third-party documents provided by the family, such as pharmacy printouts or receipts.
The PHA will make a best effort to determine what expenses from the past are likely to continue to occur in the future. The PHA will also accept evidence of monthly payments or total payments that will be due for medical expenses during the upcoming 12 months.
Written third-party verification forms, if the family is unable to provide acceptable documentation.
If third-party or document review is not possible, written family certification as to costs anticipated to be incurred during the upcoming 12 months.
In addition, the PHA must verify that:
• The household is eligible for the deduction.
• The costs to be deducted are qualified health and medical care expenses. • The expenses are not paid for or reimbursed by any other source. • Costs incurred in past years are counted only once.
Eligible Household
The health and medical care expense deduction is permitted only for households in which the head, spouse, or cohead is at least 62, or a person with disabilities. The PHA must verify that the family meets the definition of an elderly or disabled family provided in the Eligibility chapter and as described in Chapter 7 (7-IV.A.) of this plan.
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Qualified Expenses
To be eligible for the health and medical care expense deduction, the costs must qualify as medical expenses. See Chapter 6 for the PHA’s policy on what counts as a medical expense.
Unreimbursed Expenses
To be eligible for the health and medical care expense deduction, the costs must not be reimbursed by another source.
PHA Policy
The family will be required to certify that the medical expenses are not paid or reimbursed to the family from any source. If expenses are verified through a third party, the third party must certify that the expenses are not paid or reimbursed from any other source.
Expenses Incurred in Past Years
PHA Policy
When anticipated costs are related to ongoing payment of medical bills incurred in past years, the PHA will verify:
The anticipated repayment schedule
The amounts paid in the past, and
Whether the amounts to be repaid have been deducted from the family’s annual income in past years
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7B-IV.C. DISABILITY ASSISTANCE EXPENSES
Policies related to disability assistance expenses are found in 6-II.E. The amount of the deduction will be verified following the standard verification procedures described in Part I.
The PHA must comply with the Health Insurance Portability and Accountability Act (HIPAA) (Pub. L. 104-191, 110 Stat. 1936) and the Privacy Act of 1974 (Pub. L. 93-579, 88 Stat. 1896) when requesting documentation to determine unreimbursed auxiliary apparatus or attendance care costs. The PHA may not request documentation beyond what is sufficient to determine anticipated reasonable attendant care and auxiliary apparatus costs. Before placing bills and documentation in the tenant file, the PHA must redact all personally identifiable information [FR Notice 2/14/23].
Amount of Expense
Attendant Care
PHA Policy
Expenses for attendant care will be verified through:
Written third-party documents provided by the family, such as receipts or cancelled checks paid to the care provider. billing statements for purchase of auxiliary apparatus, or other evidence of monthly payments or total payments that will be due for the apparatus during the upcoming 12 months.
Third-party verification form signed by the provider, if family provided documents are not available.
If third-party verification is not possible, written family certification of estimated apparatus attendant care costs for the upcoming 12 months.
Auxiliary Apparatus
PHA Policy
Expenses for auxiliary apparatus will be verified through:
Written third-party documents provided by the family, such as billing statements for purchase of auxiliary apparatus, or other evidence of monthly payments or total payments that will be due for the apparatus during the upcoming 12 months.
Third-party verification form signed by the provider, if family-provided documents are not available.
If third-party verification is not possible, written family certification of estimated apparatus costs for the upcoming 12 months.
In addition, the PHA must verify that:
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• The family member for whom the expense is incurred is a person with disabilities (as described in 7-II.F above).
• The expense permits a family member, or members, to work (as described in Chapter 6.). • The expense is not reimbursed from another source (as described in Chapter 6.).
Family Member is a Person with Disabilities
To be eligible for the disability assistance expense deduction, the costs must be incurred for attendant care or auxiliary apparatus expense associated with a person with disabilities. The PHA will verify that the expense is incurred for a person with disabilities (See 7-II.F.).
Family Member(s) Permitted to Work
The PHA must verify that the expenses claimed actually enable a family member, or members, (including the person with disabilities) to work.
PHA Policy
The PHA will request third-party verification from a rehabilitation agency or knowledgeable medical professional indicating that the person with disabilities requires attendant care or an auxiliary apparatus to be employed, or that the attendant care or auxiliary apparatus enables another family member, or members, to work (See 6-II.E.).
This documentation may be provided by the family.
If third-party verification has been attempted and is either unavailable or proves unsuccessful, the family must certify that the disability assistance expense frees a family member, or members (possibly including the family member receiving the assistance), to work.
Unreimbursed Expenses
To be eligible for the disability expenses deduction, the costs must not be reimbursed by another source.
PHA Policy
The family will be required to certify that attendant care or auxiliary apparatus expenses are not paid by or reimbursed to the family from any source. © Copyright 2024 Nan McKay & Associates, Inc.
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