Verification and
Rent Calculation
Angela Foster, PH Revitalization Specialist
Claunella Richardson, Financial Analyst
Chandra Broadnax, Program Analyst
U. S. Department of Housing and Urban Development
Detroit HUD Field Office, Office of Public Housing
Willie C.H. Garrett, Public Housing Hub Director
Training Outline

Lesson 1: Eligibility For Admission
 Notification Letter
 Interview Process
 Required forms and documents

Lesson 2: Verification Process
 Document Verification
 What is and is not Income?
 Methods of Income Verification
 How to access and use EIV

Lesson 3: Rent Calculation
 How to calculate deductions
 How to calculate Rent
Benefits

Reduce rent underpayments and
overpayments by residents.

Maximize HUD’s limited housing
resources.

The Dollar Impact of Rent Errors
Lesson 1: Eligibility For Admission
Lesson 1: Objectives

Tips to construct a clear and concise notification letter so
the Family is not confused about what documents they must
bring to the interview.

Tips to construct a detailed Annual Income Checklist to
reduce the risk of overlooking eligible income.
Insight on how to conduct a respectful and productive
interview with the Family to ensure all required documents
are collected, the verification process is thoroughly
explained, questions are answered and forms requiring
signatures are signed.


Review the purpose of HUD form 9886 and the
Declaration Of Section 214 Status form to ensure the PHA
has permission to use the Family’s information for
verification purposes and are eligible citizens.
Notification Letter
The Notification Letter
commences the verification
Date:
process. It should state the date,
time, and location of the
Time:
interview and a list of what
documents the Family should
bring. A clear and concise letter Location:
can reduce the time of the
What to bring:
verification process and
expedites housing the Family.
The Interview
The PHA’s interview with the Family is the
beginning and most important component of
the verification process. It is where the PHA
lays the groundwork to build trust with the
Family, collect information, and explain the
housing program requirements. The interview
includes the review of documents and the
signature and exchange of documents between
the PHA and the Family.
*Give the family copies of what they sign.
The Interview
(cont.)

The PHA must conduct the interview with dignity and
respect. Establish an area to conduct interviews in private.
Treat the Family with excellent customer service with a

Establish a partnership with the Family. The process to
obtain Public Housing should not deplete the spirit of those
who need our help. The PHA is not checking to see if the
family is worthy, the PHA is verifying if the Family is eligible
per HUD regulations. Be objective not judgmental!
“Treat the Family the way you want to be treated”
The Interview

(cont.)
During the interview, the use of interpersonal
communication skills such as empathy, sympathy,
effective listening and reflecting are essential.
These skills help the PHA to communicate effectively
with the Family. An effective interview reduces the risk
of missing vital information needed to verify the
Family’s eligibility for housing assistance and alleviates
the burden on the Family to making unnecessary trips
back and forth to the PHA. This is especially
challenging for Families that have to rely on others or
unreliable public transportation.
The Interview

(cont.)
The PHA benefits from a well conducted
interview. It lessens the time the PHA staff has
to take to verify information and increases the
time it takes the PHA to house a Family.
Documentation Check List

Social Security Card

Birth Certificate

Driver’s License or
Valid Government
Issued IC

INS Documentation
Form HUD 9886
Authorization for the Release of
Information/Privacy Act Notice (cont.)

Uses of Information to be Obtained: HUD is required to protect the
income information it obtains in accordance with the Privacy Act of 1974, 5
U.S.C. 552a. HUD may disclose information (other than tax return
information) for certain routine uses, such as to other government agencies
for law enforcement purposes, to Federal agencies for employment suitability
purposes and to HAs for the purpose of determining housing assistance. The
HA is also required to protect the income information it obtains in accordance
with any applicable State privacy law. HUD and HA employees may be subject
to penalties for unauthorized disclosures or improper uses of the income
information that is obtained based on the consent form. Private owners
may not request or receive information authorized by this form.
Form HUD 9886
Authorization for the Release of
Information/Privacy Act Notice (cont.)

Who Must Sign the Consent Form:
Each member of your household who is
18 years of age or older must sign the
consent form. Additional signatures must
be obtained from new adult members
joining the household or whenever
members of the household become 18
years of age.
Form HUD 9886
Authorization for the Release of
Information/Privacy Act Notice (cont.)

Failure to Sign Consent Form: Failure to
sign the consent form may result in the denial
of eligibility or termination of assisted housing
benefits, or both. Denial of eligibility or
termination of benefits is subject to the HA’s
grievance procedures and Section 8 informal
hearing procedures.
Annual Income Checklist

A detailed Annual
Income Checklist
reduces the risk of
overlooking eligible
income which could
lead to under and
over payments by
residents.
Lesson 1: Wrap-up

Construct a comprehensive, clear and concise Notification Letter

Conduct a respectful and thorough Interview with Family

Collect required documents

Review with Family and sign Form HUD 9886

Review with Family and sign Declaration of Section 214 Status

Collect all Annual Income information.
Lesson 2: Verification Process
Lesson 2: Objectives

Review the purpose of Document
Verification.

Review what is and is not Income.

Review the Methods of Income Verification.

Learn how to access and use EIV Effectively
Verifying Social Security Numbers

One of the most important tools for identification is an
applicant’s/participant’s Social Security Number. Prior to
admission each Family member who has a Social Security
Number and who is at least six years of age is required to
disclose and verify that Social Security Number. New
Family members at least six years of age must provide
this verification prior to being added to the lease. This
information must be provided for children in assisted
households at the first regular reexamination after
turning six. When a Family is adding a new baby to the
lease, the PHA can help by providing Social Security
Number application forms. Children on whose behalf
welfare benefits are paid have social security numbers.
Verifying Social Security Numbers
(cont.)

The best verification of the Social Security
Number is the original Social Security card. If
the card is not available, the PHA may accept
letters from Social Security that establish and
state the number. Documentation from other
governmental agencies should also be accepted
that establishes and states the number. A
driver’s license, military ID, passport, or other
official document that establishes and states the
number is also acceptable. The documents used
to verify social security numbers should be
copied and placed in the applicant’s file.
Verifying Social Security Numbers
(cont.)

If applicants state that they do not have Social Security Numbers, the
PHA should ask if the applicants have ever worked, had a bank
account, received any government benefits or attended school in the
United States. If applicants respond negatively to these questions
and continue to state that they do not have a Social Security
Number, they are required to sign a certification to this effect. An
example of someone who might not have a social security number
would be an eligible immigrant who is retired and living on a pension
from their former country. The PHA may not require any
individual who does not have a Social Security Number to
obtain a Social Security Number. Most methods of verification
require the Social Security Number, so the PHA should be familiar
with how an applicant may obtain a Social Security Number locally.
Verifying Social Security Numbers
(cont.)

If applicants indicate they have Social Security
Numbers, but cannot readily verify them, the
Family cannot be assisted until verification
is provided. Applicants who have Social
Security Numbers but refuse to provide them
are not eligible for public housing.
Verifying Citizenship:
Declaration of Section 214 Status

Section 214 of the Housing and Community
Development Act of 1980, as amended,
restricts HUD from making financial assistance
available for noncitizens, unless they meet one
of the categories of eligible immigration status
specified in Section 214.
Verifying Citizenship

For noncitizens, the evidence consists of the
signed declaration of eligible immigration status
and one of the following:
Verifying Citizenship







Alien Registration Receipt Card
Arrival-Departure Record, with one of the
following annotations:
a.) Admitted as Refugee Pursuant to Section 207;
b.) Section 208;
c.) Asylum;
d.) Section 243(h);
Deportation stayed by Attorney General; or
- Paroled Pursuant to Section 212(d)(5) of
the INA.
Verifying Citizenship

Unannotated Arrival-Departure Record, with one of the
following:

a.) Final court action granting asylum, if no appeal is taken;

b.) Letter from INS asylum officer or district director granting asylum;

c.) Court decision granting withholding of deportation; or - Letter from
asylum officer granting withholding of deportation.

Temporary Resident card, annotated: Section 245A” or “Section 210”

Employment Authorization Card, annotated “Provision of Law
274a.12(11)” or “Provision of Law 274a.12”

Receipt issued by the INS indicating that the 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.
Verifying Citizenship

Birth Certificates are acceptable forms of
verification for Evidence of Citizenship.
The PHA verifies citizenship status through a
birth certificate, however a U.S. passport, military
identification card or DD-214 form are
acceptable.
 Copies of all documents must be retained in the
resident’s file.

What is Annual Income ?
24 CFR 5.609
 Annual
income is used both to determine
income eligibility and is the first step in
income-based rent calculation.
What is Income and how to Verify It
All Income MUST be Verified!
The PHA is responsible for Verifying Income,
NOT the Family!
24 CFR§ 960.259(c)(i)(ii)(iii)(iv)
What is Income and how to Verify It
Asset Income - Amounts derived from assets to which any
member of the family has access. Any withdrawal of cash or assets
from an investment. If the family has net family assets in excess of
$5,000, annual income shall include the greater of the actual
income derived from all net family assets or a percentage of the
value of such assets based on the current national passbook savings
rate, as determined by HUD.
Verify the following information 3rd Party Verification Methods:
 Bank
Statements
 Investment Statements
 IRS records
 Sell of Property documents (homes, stocks, boats)
 Property acquisition records
What is Income and how to Verify It (cont.)
Asset Income
NOTE:
The public housing program does not have a dollar
limit on the amount of assets a family can possess
and still be eligible for the program, but the income
produced by net family assets is counted as part of
Annual Income.
What is Income and how to Verify It (cont.)
Employment Income that includes all wages,
salaries, overtime pay, commissions, fees, tips,
bonuses.
Verify the following information through EIV and 3rd Party
Verification Methods:
Anticipated pay increases
 Start
date
Year-to-date earnings
 Termination
date
Bonuses
 Pay
frequency
Severance pay
 Pay
rate
Overtime
What is Income and how to Verify It (cont.)
Self-Employment Income from the operation of a
business or profession.
Verify the following information through EIV and 3rd Party
Verification Methods:

Net income (gross income – expenses)

Withdrawal of cash or assets except to the extent it is a
reimbursement of cash or assets invested by the family

Expenditures for business expansion or amortization of capital
indebtedness which are not deducted from the gross income.

Allowance for depreciation of assets used in business or
profession based on straight line depreciation.
What is Income and how to Verify It (cont.)
Social security payments, TANF,
Unemployment, and Pension Benefits
Verify the following information through EIV and 3rd
Party Verification Methods if there are discrepancies:
 Social
Security and SSI – Verify through EIV
 Unemployment – Verify through EIV
 TANF – Verify through EIV
 Pensions – Verify through EIV or 3rd party
verification methods
What is Income and how to Verify It (cont.)
Child support
Verify the following information:
Verify Child Support through 3rd party verification
methods; information is not available in EIV.
Verify if the family is actually receiving Child Support
before counting the court ordered amount.
Verify how much the family is receiving. To avoid
overpayment by the family, do not count the court
ordered amount if it is not the amount received by
the family.
What is Income and how to Verify It (cont.)
Use 3rd Party Verification Methods to Verify Income
Below
 Annuity
payments, Insurance policies.
 Private Retirement funds, disability or death benefits.
 Periodic receipts.
 All regular and special pay of a member of the Armed
Forces, (except for hostile fire pay, which is excluded)
 Regular contributions and gifts.
Note: Of all the forms of income that should be
included in Annual Income, contributions from sources
outside the household is the most often missed.
What is Not Annual Income?
24 CFR § 5.609(c)

a. Income from employment of children (including foster
children) under the age of 18 years.

b. Payments received for the care of foster children or
foster adults (usually persons with disabilities, unrelated to
the tenant family, who are unable to live alone).

c. Lump-sum additions to family assets, such as inheritances,
insurance payments (including payments under health and
accident insurance and worker’s compensation), capital
gains and settlement for personal or property losses.
What is Not Annual Income?
(24 CFR § 5.609(c)

d. Amounts received by the family that is
specifically for, or in reimbursement of, the cost
of medical expenses for any family member.

e. Income of a live-in aide.

f. The full amount of student financial assistance
paid directly to the student or to the
educational institution
What is Not Annual Income?
(24 CFR § 5.609(c)

g. The special pay to a family member serving in the Armed
Forces who is exposed to hostile fire.

h. Amounts received under training programs funded by HUD.

Amounts received under a resident service stipend. A resident
service stipend is a modest amount (not to exceed $200 per
month) 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. Such services may include, but are not
limited to, fire patrol, hall monitoring, lawn maintenance, resident
initiatives coordination, and serving as a member of the PHA’s
governing Board.

No resident may receive more than one such stipend
during the same period of time.
What is Not Annual Income?
(24 CFR § 5.609(c)

Incremental earnings and benefits resulting to
any family member from participation in
qualifying State or local employment training
programs (including training programs not
affiliated with a local government) and training
of a family member as resident management
staff. 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.
What is Not Annual Income?
(24 CFR § 5.609(c)

i. Temporary, nonrecurring, or sporadic income (including
gifts); The key element that causes the exclusion of this
income is that it is neither reliable nor periodic.

j. 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.

k. Earnings in excess of $480 for each full-time student 18
years of age or older (excluding the head of household and
spouse);
What is Not Annual Income?
(24 CFR § 5.609(c)

m. Adoption assistance payments in excess of $480 per adopted child.

n. Deferred periodic amounts from Supplemental Security Income and
Social Security benefits that are received in a lump sum amount or in
prospective monthly amounts; a lump sum payment covering the period
from application to determination of eligibility.

o. 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;
This exclusion would apply to State homestead exemptions, for
example.
What is Not Annual Income?
(24 CFR § 5.609(c)

p. Amounts paid by a State agency to a family with a
member who has a developmental disability and is
living at home to offset the cost of services and
equipment needed to keep the developmentally
disabled family member at home; the State funds
alluded to in this paragraph are paid to prevent the
institutionalization of a family member.

q. Amounts specifically excluded by any other
Federal statute 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 the above list of excluded income apply.
What is Not Annual Income?
(24 CFR § 5.609(c)
The following list of benefits is excluded income:

The value of the allotment provided to an eligible household for coupons under the
Food Stamp Act of 1977 [7 USC 2017 (h)].

Amounts of scholarships funded under Title IV of the Higher Education Act of 1965
including awards under the Federal work-study program or under the Bureau of
Indian Affairs student assistance programs [20 USC 1087 (uu)].

Examples of Title IV programs include but are not limited to:

Basic Educational Opportunity Grants (Pell Grants).

Supplemental Opportunity Grants.

State Student Incentive Grants.

College Work Study.

Byrd Scholarships.
Methods of Income Verification
1.
Written Third Party Verification: Independent verification of income
and/or expenses by contacting the individual income/expense source(s)
supplied by the family. The verification documents must be supplied directly to
the independent source by the PHA and be returned directly to the PHA from
the independent source.
2.
Oral Third Party Verification: Independent verification of income and/or
expenses by contacting the individual income/expense source(s) supplied by
the family, via telephone or in-person visit. PHA staff should document in the
tenant file, the date and time of the telephone call, the name of the person
contacted and telephone number, along with the confirmed verified
information. This verification method is commonly used in the event that the
independent source does not respond to the PHA’s faxed, mailed, or e-mailed
request for information in a reasonable time frame, i.e., ten (10)
business days.
Methods of Income Verification
3. Document Review: The PHA reviews original
documents provided by the tenant in support of
their declaration of income during the income
reexamination. This verification method can only be
used as the sole source of income verification when
third party verification cannot be obtained. When
the PHA resorts to reviewing tenant-provided
documents, the PHA must document in the tenant
file why third party verification was not available.
Methods of Income Verification
Acceptable Participant-Provided Documents
 Housing program participants have an obligation to the PHA
to provide any letter or other notice, including any letter or
notice from HUD that provides information concerning the
amount or verification of family income, per section 3(f) of
the U.S. Housing Act of 1937, as amended. In support of the
tenant’s declaration of income, the PHA may review original
(authentic) documents provided by the participant. All
documents should be dated within the last 60 days of the
interview. The PHA should make a photocopy of the original
document(s) and maintain the copy in the participant case
file. The PHA should also document in the tenant file, the
receipt, copy, and review of the original (authentic)
document.
Methods of Income Verification
Summary of some acceptable participant-provided documents

Consecutive and original pay stubs

Social Security Administration award letter

Bank statements

Pension benefit statements

Temporary Assistance to Needy Families (TANF) award letter

Other official and authentic documents from a Federal, State, or
local agency.
Methods of Income Verification

4. Tenant Certification: The tenant submits
an affidavit or notarized statement of reported
income and/or expenses. This verification
method should be used as a last resort when all
other verification methods are not possible.
When the PHA relies on tenant certification,
the PHA must document in the tenant file why
third party verification was not available.
Methods of Income Verification at a Glance
Verification Type
Oral 3rd Party
Verification Level of Importance
Mandatory and highest level of third party
verification
High (Mandatory if EIV income verification
is not available or if EIV data differs
substantially from tenant-reported
information
Medium (Mandatory if Written 3rd party
verification is not available
Document Review
Medium-Low (Use on provisional basis)
Resident Declaration
(Signed affidavit)
Low ( Use as a last resort)
EIV
Written 3rd Party
HOW TO ACCESS AND USE EIV AT A GLANCE
How does data get into EIV?
PHAs must review
EIV and maintain
the data it
provides
A PHA submits
a 50058 in PIC
– EIV receives
the tenant data
If a record
has a fatal
error, it will
not make it to
EIV.
EIV Verification
& Income
REPORTS
If your PHA fails
to report adverse
information in EIV,
an unqualified
applicant could
receive assistance.
If the weekly
summarization
fails, updated
data can be
delayed in EIV.
NDNH
(National Database of
New Hires)
SSA
Matching Process and Verification begins
(for Action Type1) and occurs at each
subsequent 50058 submission
How to Access and Use EIV at a glance
How do I access EIV?
Valid and Active
User ID
User must
view Security
Awareness
Training
• Must be assigned
for the PHA you
represent
PHA Coordinator
must assign EIV role
and notify the Field
Office Coordinator
Must access
Secure
Systems
every 60
days
• Field Office
Coordinator
completes the
overall
assignments
Maintain and utilize
your User ID
• Requires annual
recertification and
access of reports
monthly/quarterly
intervals
How to Access and Use EIV at a glance
Per PIH 2010 - 19
The New HUD Regulation
24 CFR 5.233.
◦ Effective January 31, 2010, all PHAs are required
to use the EIV system in its entirety. This means
that PHAs must use all features of the EIV system
How to Access and Use EIV at a glance
Per PIH 2010 - 19
Verify tenant employment and income
information during mandatory reexaminations of
family composition and income in accordance
with 24 CFR §5.236, and HUD administrative
guidance; and
Reduce administrative and subsidy payment
errors in accordance with HUD administrative
guidance.
What is the frequency required?
 If
a user at your
PHA has not used
the EIV system
within the last 6
months as required ,
you will receive a
notice of NONCOMPLIANCE.
What is mandated use?
 Accessing
detail
income reports for
all families subject to
an annual/interim &
accessing the
reports
How to comply with 24 CFR 5.233?
How to Access and Use EIV at a glance
EIV REPORTS YOU MUST USE:
 Monthly
1. Deceased Tenants Report
2. Identity Verification Report
3. Immigration Report

Quarterly
1. Existing Tenant Search
2. Multiple Subsidy Report
3. New Hires Report - (only those PHAs with an
interim increase reexamination policy)
How to Access and Use EIV at a glance
What
if the tenant does not provide
the PHA with requested information?
◦ If you fail to receive verification through
the allowable means:
 The PHA may determine that the tenant is not in
compliance with program requirements and
terminate tenancy or assistance, or both, if the
tenant fails to provide the requested information in
a timely manner (as prescribed by the PHA).
 A PHAs ACOP or EIV Policy should account for allowable timely
response thresholds
How to Access and Use EIV at a glance
What
if an EIV report reveals an income
source that was not reported by the tenant
or a *substantial difference in the reported
income information?
◦ The PHA is required to determine the retroactive rent as
far back as the existence of complete file documentation
(form HUD-50058 and supporting documentation) to
support such retroactive rent determinations
 *Substantial Difference is defined as >=$2,400 annually
Side Note:The tenant must be provided an opportunity to contest the
PHA’s determination of tenant rent underpayment.
Helpful EIV Tips
Maintain accurate files and utilize
the guidance HUD provides
 You must maintain copied
EIV information under
lock and key
 Run reports/print reports
regularly
 Report technical issues to
EIV Coordinator & issues
and Keep track of open
tickets
 Be proactive. If you are
having issues with EIV or
with a particular tenant’s
data, contact EIV
Coordinator immediately
 Review EIV Roundtable
Notes & Always join in on
EIV Roundtable
conference calls
Lesson 2: Wrap-up

Verify Documents to determine family eligibility.
Know what is and is not income per:
(24 CFR § 5.609) and 24 CFR § 5.609(c) respectively.


The use of EIV is mandatory.

Income Verification should take no longer than
10 days by following the Methods of Income
Verification.
Lesson 2: Wrap-up
•
Follow instruction provided when you receive notices
from EIV regarding resolving Debts Owed, Multiple
Subsidy, & Deceased Tenants cases
•
Run reports/print reports regularly
•
Report technical issues to EIV Coordinator & issues
and Keep track of open tickets
•
Review EIV Roundtable Notes & Always join in on EIV
Roundtable conference calls
Lesson 3: Rent Calculation
Lesson 3: Objectives
 Learn
how calculate deductions
to ensure the accuracy of
adjusted annual income.
 Learn
how to calculate rent to
reduce the risk of overpayments
and underpayments by residents.
DEDUCTIONS
Adjusted Income is:

Annual Income, minus

$480 per Dependent Deduction, minus

$400 Elderly/Disabled Deduction, minus

Unreimbursed medical expenses for elderly/disabled family beyond
3% threshold, minus

Unreimbursed reasonable attendant care and auxiliary apparatus
expenses for family member with disabilities to the extent
necessary to allow family member to be employed, not to exceed
earned income, beyond 3% threshold, minus

Reasonable childcare expenses which enable family member to
work or pursue education, minus

PH Permissible Deductions, minus

EID
Dependent Deduction

The Dependent deduction is Statutory per (24
CFR § 5.611). The amount is $480, and is
deducted from Annual Income.
This $480 annual deduction is available for a
member of the family (except live-in aides, foster
children and foster adults who may be household
members but are not family members) other than
the family head or spouse, who is under 18 years
of age, is a person with a disability, or is a full-time
student.
 NOTE: There is no maximum age limit for
who may qualify as a full-time student.

Dependent Deduction
How is it calculated?
 Number of dependents X $480
Verification
 Minor family member—documentation
demonstrating family member is a minor

Disabled family member—documentation
demonstrating family member is disabled

Full-time student—current enrollment
status letter
Elderly and Disabled Family Deduction

The Elderly and Disabled Family Deduction is
Statutory per (24 CFR § 5.611).

This $400 annual deduction is available to families
whose head of household, their spouse, or a sole
member who is at least 62 years of age (elderly
families), or a person with a disability (disabled
families). This may also include two or more such
persons living together, or two or more such
persons living with a live-in aide. Each Elderly or
Disabled Family is limited to one $400 deduction
regardless of the number of elderly or disabled
household members.
Elderly and Disabled Family Deduction
How is it calculated?
 Eligible Family X $400
Verification
 EIV
 Disability verification form completed by
medical professional
 Birth Certificate
Child Care Deduction

The Child Care Deduction is Statutory per (24 CFR § 5.611).

Childcare expenses are defined as the unreimbursed amounts
anticipated to be paid by the family for the care of children less
than 13 years of age during the period for which annual income
is computed (24 CFR § 5.603).

Such amounts are deductible from annual income only when the
care is necessary to enable a family member to actively seek
employment, be gainfully employed, or to further his or her
education.

Family may not be denied solely because a family member could
take care of the children.
Child Care Deduction (cont.)

The amount deducted must reflect reasonable
charges for childcare. In the case of childcare
necessary to permit employment, the amount
deducted may not exceed the amount of employment
income that is included in annual income.

The PHA is charged with determining what is a
reasonable amount, especially when the care is
provided to further a family member’s education.
Unlike the employment related portion of the
deduction, childcare costs for education purposes are
not “capped” by the amount earned. Surveying the
cost of childcare in the community is a good method
to determine when the PHA should cap the
deduction.
Child Care Deduction (cont.)
Verification

Actively seeking employment—verify with
W-2/Welfare to Work program; resident
provided statement


Employed—Wage income
Pursue education—enrollment verification
Disability Expense Deduction

This deduction covers unreimbursed costs for
attendant care or auxiliary apparatus for a disabled
family member. The deduction must be applied as
follows:

The reasonable attendant and auxiliary apparatus
expenses must enable an adult member of the family
to be employed (including the person with
disabilities).

The deduction may not exceed the earned income
received by adult family members who are able to
work because of the care or auxiliary apparatus.
Calculating Medical/Disability Expense
Deduction
The 3% threshold amount must only be
counted once in considering medical/disability
expense deductions
*Disability assistance deductions must be
calculated “before” medical deductions
since it is limited by the amount a person
works
Unreimbursed Medical Expense
Deductions

This deduction is granted only to elderly or
disabled families.

A range of unreimbursed medical expenses
and services can be claimed, including, but
not limited to the following, to the extent
that the total medical expenses exceed 3
percent of annual income (the PHA must put
definition in its ACOP. Use of IRS Medical
Expenses, found in IRS publication 502, as
guidance is acceptable):
The 3 Percent “Deductible” for
Disability and Medical Deductions

When only one deduction is present, the 3%
is applied to that deduction.
Example: Medical only – Elderly family with
no dependents.
Annual Income = $15,500;
3% of A.I. = $ 465
Anticipated medical costs = $400
$400 is less than $465, so this family receives
no medical deduction.
Note: The family would receive the $400
deduction for being an elderly household.
The 3 Percent “Deductible” for
Disability and Medical Deductions






Example: Attendant care/apparatus only – Single
person with a disability, no dependents.
This family receives a deduction of $1,935 for the
assistive animal ($2,400 - $465). In addition the
family will also receive the $400 deduction for
being a household headed by a person with a
disability.
Annual Income = $15,500
3 Percent of A.I. =$465
Assistive animal care costs =$2,400
$2,400 is greater than 3% of Annual Income,
subtract $465 Deduction = $1,935
The 3 Percent “Deductible” for
Disability and Medical Deductions

Example: The 3 Percent “Deductible” with Both
Unreimbursed Medical and Disability Expense
Deductions

Families with a head or spouse who is elderly or
a person with a disability may (potentially) receive
both the unreimbursed medical and disability
expense deductions.

Families with a member, other than the head or
spouse, who is a person with a disability may only
qualify for the disability expense deduction.
The 3 Percent “Deductible” for
Disability and Medical Deductions
Example (cont.):
Head of household is a senior with a
disability who works part time.
 Annual Income = $15,500
 Income from employment =$ 6,600
Anticipated medical costs =$400
 Assistive animal care costs =$3,000
 Total Medical and Disability costs=$3,400


Total allowed deduction =$2,935 ($3,400 -$465)
Permissive Deductions

Permissive Deductions (see 24 CFR §
5.611) are defined as additional, optional
deductions that may be applied to annual
income. If the PHA opts to use permissive
deductions, it must have a written policy
guiding their administration, and the
deductions must be applied consistently.
Permissive Deductions (cont.)
PHAs considering the use of permissive deductions
should apply the following considerations when
developing a new deduction:

Permissive deductions must be included in the PHA’s
ACOP and granted to all families that qualify for them.

Permissive deductions should “fill in” or complement
existing income exclusions and deductions.

Permissive (and mandatory) deductions can be thought of
in two ways: 1. deductions based on need or family
circumstance and 2. deductions designed to encourage
self-sufficiency or other economic purpose.
Asset Income






If the family has an asset which they can access, the
annual dollar amount is counted whether they receive
the interest/dividends or not
Asset income is based on what the family receives on
the investment, not on what they put in
If the cash value of the investments is greater than
$5,000, either the actual income derived or 2%
(passbook rate) will be counted, whichever is greater
PHAs must determine the cash value of assets in some
cases since this may affect their rent calculation.
The cash value is equal to the market value minus the
expense to convert the asset to cash:
Cash Value=Market Value- Expenses
Business Income
The net income from the operation of a
business or profession. Expenditures for business
expansion or amortization of capital indebtedness
shall not be used as deductions in determining net
income. An allowance for depreciation of assets
used in a business or profession may be deducted,
based on straight-line decline, as provided in Internal
Revenue Service regulations. Any withdrawal of cash
or assets from the operation of a business or
profession will be included in income, except to the
extent the withdrawal is reimbursement of cash or
assets invested in the operation by the family.
Welfare Income / TANF (24 CFR § 5.609)
Welfare assistance (TANF). If the welfare assistance payment
includes an amount specifically designated for shelter and utilities
that is subject to adjustment by the welfare assistance agency in
accordance with the actual cost of shelter and utilities, the amount
of welfare assistance income to be included as income shall consist
of: - the amount of the allowance or grant exclusive of the amount
specifically designated for shelter or utilities, plus - the maximum
amount that the welfare assistance agency could in fact allow the
family for shelter and utilities. If the family’s welfare assistance is
radically reduced from the standard of need by applying a
percentage, the amount calculated shall be the amount resulting
from one application of the percentage.
Note – Food Stamps are excluded from Annual Income.
Welfare Income / TANF
How is it calculated? Monthly Cash Assistance
Amount x 12 minus the amount of Food Stamps
Example: The family receives $700 per month cash
assistance and $400 per month food stamps.
$700 x12 =$8400 – annual cash assistance amount
$400 x 12 = $4800 – annual food stamps amount
8400 + 4800 – (4800 food stamp exclusion) = $8400
$8400 = Annual Welfare/TANF Income
Wages Calculation
How is it calculated?
1. Average the number of hours worker per year
Example: 40 hr. work week = 2080 per year
40 hrs. x 52 weeks (the number of weeks in a year = 2080 hrs. yr.)
Example: 32 hr. work week = 1664 per year
32 hrs. x 52 weeks (the number of weeks in a year = 1664 hrs. yr.)
2. Hourly rate x hrs. per year
$7.00 x 2080 = $14560 = Annual employment income based
on 40 per yr.
Social Security, Social Security
Supplemental Income Calculation
How is it calculated?
 Monthly Amount x 12







Family receives SS benefits $500 per mo.
Family receives SSI benefits $250 per mo.
Family receives State of Michigan SSI quarterly
(receives 4 times per year) $69
$500 x 12 = $6,000
$250 x 12 = $3,000
$69 x 4 = $276
Total Annual Income = $9,276
Lesson 3: Wrap-up

Calculate ALL verified Deductions before rent is
calculated to obtain Adjusted Annual Income.

QA/QC deduction calculations before rent is
calculated.

Calculate Rent using all verified income and
verified Deductions

QA/QC Rent calculations and provide family
with a rent choice: Flat Rent or 30% of Monthly
Adjusted Income.
Summary of Training

Construct a comprehensive notification
letter in lay terms that tells the family the
date and time of the Interview and what
documents they must bring.

Conduct a respectful and thorough Interview
to ensure no information is missed and trust
is built with the family.

The PHA is responsible for Verifying Income,
NOT the Family!
24 CFR§ 960.259(c)(i)(ii)(iii)(iv)
Summary of Training (cont.)

Take no longer than 10 days to Verify
Income by using the “MANDATORY” EIV
system and the Methods of Verification
Hierarchy Chart.

Calculate Deductions and QA/QC the
process.

Calculate Rent, QA/QC the process and
provide the family with a rent choice and
give them a copy of the signed choice
form.
Resources

HUD’s Public Housing Occupancy Guidebook

Code of Federal Regulation (CFR)

ACOP – Admission and Continued Occupancy Policy

24 CFR § 5.609 – States what is Annual Income

24 CFR § 5.609(c) – States what is NOT Annual Income

24 CFR § Part 960 – Admission to, and Occupancy of Public Housing

24 CFR § Part 966 – Public Housing Leasing and Grievance Procedures

Electronic Code of Federal Regulation for HUD http://www.ecfr.gov/cgibin/textidx?SID=be81e73214ab2ae15d297c24bde62391&tpl=/ecfrbrowse/
Title24/24tab_02.tpl
Helpful Hint: Using HUD’s Public Housing
Occupancy Guidebook is a Safety Net because all
of its content is per HUD’s Regulations