Chapter IV: Income – Allowances, Assets, Expenses, Verifications and Calculations
Effective: September 2009
Section C: Income Excludes
The following items should be excluded from annual income. All income exclusions need to be verified using TPV but do not need to be entered in Elite except for earned income disregard.
1. Adoption Assistance Payments in excess of $480 per adopted child. Include only the first $480 received per year as annual income.
2. Census Takers Earned Income - Term of employment is temporary (cannot exceed 180 days) and does not culminate in permanent employment.
3. Dependent Income - Exclude all earned income of dependent family members under age 18. See Earned Income Disregard below for details on when to disregard adult dependent (disabled individual’s) income.
4. Earned Income Disregard (EID) For Persons With Disabilities (CFR 5.617) - Effective April 20, 2001, HUD implemented a policy that disregards or provides a disallowance of increases in earned income for family members with disabilities. The disregard applies only to participants in the HCV Program. The disregard does NOT apply to participants in the Moderate Rehabilitation Program or participants living in SRO developments.
All household income is included for purposes of admission to the program (i.e. determining income eligibility, 40% affordability, income targeting.)
This disregard only applies to the family members with disabilities who have an increase in earned income after their initial HCV participation date, not the entire household. A disabled family is a family whose head, spouse or sole member is a person with disabilities.
If the family member’s disability is not verified by current receipt of SSI or a permanent Verification of Disability and/or Special Medical Needs (MSHDA 16), the disability must be re-verified annually.
Click here to view the additional information pertaining to this topic.
Click here to view EID examples.
5. Educational Assistance
- Wages and other earned income in excess of $480 for full-time students who are 18 years or older (except the head of household, spouse or co-head). Include the first $480 as income. (Note: These full-time students are generally living in an assisted household with his or her parent(s) and the parent(s) are the head of household. Student is considered a dependent.)
- The full amount of financial aid and scholarships funded under Title IV of the Higher Education Act of 1965, Federal Work Study programs, Bureau of Indian Affairs Student Assistance, Education entitlements, Grants, and all other amounts received for student financial assistance IF the full or part-time student is living in an assisted household with his or her parent(s) and the parent(s) are the head of household. (Note: student is considered a dependent.)
- Financial assistance to a student in excess of tuition will not be included in annual income in determining the student’s eligibility when the student is over the age of 23 years with dependent children.
- Student loans and loan proceeds.
6. Foster Children and Foster Adult(s) Care Payments - Foster adults are usually unrelated individuals with disabilities who are unable to live alone. Payments received for the care of foster children and foster adults are not considered income.
7. Holocaust Reparations - Payments made by a foreign government to persons who were persecuted during the Nazi era.
8. Home Care Payments - Amounts paid by a State agency (i.e. Michigan’s Family Support Subsidy Program) to families who have a developmentally disabled family member(s), adult or child, living at home. Possible uses of the subsidy include, but are not limited to:
- Family counseling
- Home remodeling and purchase of special equipment to accommodate the needs of the impaired child or adult (ramps, wider doors, shower chair, etc)
- In-home specialized care
- Respite (baby-sitting) care
- Special diets
- Unique transportation costs
9. Income specifically excluded by Federal statute. Examples include, but are not limited to
- Agent Orange Settlements - Payments received after January 1, 1989 from the Agent Orange Settlement Fund or any other fund established in the “In Re Agent Orange” product liability litigation.
- Child Care and Development Block Grant Act of 1990 - the value of any child care provided or arranged (or reimbursement for costs incurred) under this Act.
- Crime Victim Compensation - Any amount of compensation under the Victim of Crime Act.
- Domestic Volunteer Services Act of 1973 - Payments under this Act include programs for seniors, national volunteer antipoverty programs, and small business administration programs such as:
- Active Corps of Executives (ACE)
- Foster Grandparents
- National Volunteer Program to Assist Small Business and Promote Volunteer Services to Persons with Business Experience
- Older American Committee Service Program
- Peace Corps
- RSVP - Retired Senior Volunteer Program
- Senior Companions Programs
- Service Corps of Retired Executives (SCORE)
- Service Learning Program
- Special Volunteer Programs
- VISTA - Volunteers in Service to America
- Earned Income Tax Credit - The Internal Revenue Service (IRS) provides the Earned Income Tax Credit to low-income workers with children. Low-income workers must apply for the credit and will receive it in advance, in their regular paycheck, or in a single lump sum when filing their income tax return.
- Food Stamps – Exclude the value of the allotment provided to an eligible household under the Food Stamp Act of 1977.
Note: Food contributions provided occasionally to the household from organizations or persons would be excluded from annual income because they fall into the category of “temporary, nonrecurring or sporadic income”. However, food contributions provided on a regular, ongoing basis—for example weekly or monthly, would be classified as “regular contributions or gifts received from organizations or from persons not residing in the dwelling” and would be included in annual income.
- Heating Assistance - Payments or allowances made under the Department of Health and Human Services Low-Income Home Energy Assistance Program (LIHEAP).
- Indian Settlements/Trusts:
- Payments received under the Maine Indian Claims Settlement Act of 1980.
- Payments received under the Alaska Native Claim Settlement Act.
- Income derived from certain sub marginal land of the US held in trust for particular Indian Tribes.
- Income derived from the disposition of funds of the Grand River Band of Ottawa Indians.
- Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation.
- The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the US Claims Court, the interests of individual Indians in trust or restricted lands, including the first $2000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands.
- Title IV of the Higher Education Act of 1965 – The full amount of financial aid and scholarships funded under Title IV of the Higher Education Act of 1965 including awards under the Federal Work Study Program, Bureau of Indian Affairs Student Assistance, Education entitlements, Grants, and all other amounts received for student financial assistance except as provided for the housing portion of athletic scholarships and the additional provisions of the ineligible student provisions.
- Title V of the Older American’s Act of 1965: Payments received from programs funded under Title V, including the Senior Community Service in Employment Program (SCSEP) funded through the Department of Labor. The program provides grants to organizations who fund part-time employment of persons 55 years of age or older with limited income. Examples include, but are not limited to:
- AARP - American Association of Retired Persons
- Green Thumb
- National Association for the Spanish Elderly
- National Council of Senior Citizens (a.k.a. Senior Aides)
- National Urban League
- NCBA - National Caucus for Black Aged
- NCOA - National Council on Aging
- Senior Community Services Employment Program (CSEP)
- Spina Bifida – Any allowance paid under the provision of 38 U.S.C. 1805 to a child suffering from Spina Bifida who is the child of a Vietnam veteran.
- Allowances, earnings and payments to Americorps participants under the National and Community Services Act of 1990.
- Allowances, earnings and payments to individuals participating in programs underthe Workforce Investment Act of 1998.
- Medicare incentive reimbursements for discount cards.
10. Kin-GAP Payments - Subsidies to children leaving the juvenile family court system to live with a relative or legal guardian. These subsidies are paid by states and serve as an alternative to foster care placements.
11. Live-in Aide (full-time) Income - The provider is not considered a member of the household and only resides in the unit to provide services.
12. Lump Sum Additions to Family Assets – If the payment is expected to be received on a regular ongoing basis, it is not a ‘lump sum’ and therefore is counted as income. All types of lump sum additions excluded from annual income are included as an asset unless otherwise exempt by HUD.
13. Medical Reimbursements - Amounts received specifically for reimbursement of the cost of medical expenses for any family member.
14. Medicare Prescription Drug Benefit Subsidy – Exclude the low-income subsidy received by beneficiaries enrolled in the Medicare Prescription Drug Plan Part D effective January 1, 2006. More information about Medicare Prescription Drug Benefit subsidy is available at 1-800-633-4227 or www.medicare.gov.
15. Military Pay - The following income must be excluded:
- Full amount of military pay of any family member (except head of household, co-head or spouse) who is permanently (more than 90 days) away from home in the military (including Coast Guard, National Guard, and Reserve Units) is excluded. Note: The member must be removed from the Lease and the Family Composition (MSHDA 51a).
- Special "hostile fire/imminent danger pay for serving an area in direct support of military operations in a designated combat zone" is payment received by a person serving in the Armed Forces who is exposed to hostile fire and is always excluded income. Generally, hostile fire/imminent danger pay is not included on W-2 Forms for persons who do qualify for the exclusion and is included on W-2 forms for persons who do not qualify for the exclusion.
- Income of a guardian who is temporarily living in a unit solely for the purpose of caring for dependents that a military person leaves in the unit is not to be counted in determining family income and the amount of rent the family pays based on family income.
- Other military pay specifically excluded by law.
16. Reimbursement from Other Publicly Assisted Programs for related or out-of-pocket expenses are excluded when made solely to allow participation in the program. Examples include 1) child care, transportation and other work related expenses when a welfare recipient, as a condition of continued benefits, works in a nonprofit agency to acquire job skills; and 2) payments received by a volunteer fire fighter for transportation reimbursement.
17. Resident Service Stipend - Amounts received by a resident of a development for performing a service, on a part-time basis, which enhances the quality of life in the development, for the PHA, or the owner, subject to the following:
- Not to exceed $200/month - If the resident is paid more than $200/month, the entire stipend (including the $200) is included as income.
- Such services may include, but are not limited to: fire patrol, hall monitoring, lawn maintenance, or resident Initiatives coordination.
18. Scholarships and Grants – see Educational Assistance
19. State or Local Tax Credits, Refunds and Rebates
- Includes rebates for property taxes paid on a dwelling unit, i.e. Homestead Property Tax Refund.
- Income tax refund checks are not income, nor assets.
20. Social Security and SSI Lump Sum/Deferred Periodic Payments - Include lump sum payments as an asset, not income.
21. TANF Child-Only Grants or TANF Non-Needy Grants - FSS families that receive Temporary Assistance for Needy Families (TANF) Child-Only Grants or TANF Non-Needy Grants that are made to a dependent child or to a caretaker on the child's behalf solely on the basis of the child's need and not on the need of the child's current non-parental caretaker do not qualify as welfare assistance because these grants are not designed to meet the “family’s ongoing basic needs”.
22. Temporary, Nonrecurring or Sporadic Income - Includes gifts and cash contributions received less than every three months and/or are less than $1,200 a year.
23. Training Programs - HUD excludes earnings and benefits from employment training programs funded by HUD and incremental increases in income resulting from participation in a qualifying state or local employment-training program, including those not affiliated with a local government. Incremental refers to the increase between the total amount of earnings and public assistance of a family member prior to enrollment in the training program, and the earnings and public assistance of the family member after enrollment in the training program. The exclusion applies only for the period during which the family member participates in the employment-training program. All other amounts, increases and decreases, are treated in the usual manner in determining annual income.
HUD defines a “Training Program” as a program which:
- Has clearly defined goals and objectives,
- Has a variety of components,
- Takes place in a series of sessions over a period of time,
- Is designed to lead to a higher level of proficiency,
- Enhances the individual’s ability to obtain employment; and
- Has a performance standard to measure proficiency.
Training may include, but is not limited to:
- Classroom training in a specific occupational skill,
- On-the-job training with wages subsidized by the program,
- Basic education.
Income derived from the following specific training programs is excluded for purposes of determining eligibility and benefits:
- Workforce Investment Act of 1998, formally known as the Job Training Partnership Act (JTPA) or the AmeriCorps Living Allowance under the National and Community Service Act of 1990.
- All amounts received under any training program funded by HUD, including the Comprehensive Improvement Assistance Program (CIAP). Tenant trainees receive allowances to cover costs associated with participation in the program (day care, transportation, clothing, etc.). Upon completion of the training, if the trainee obtains new employment, these allowances are considered income.
- Plan for Achieving Self Support (PASS): Disregard monies issued to a disabled person exclusively set aside for use under PASS, which provides support for certain aged, blind, and disabled individuals and is encouraged by the SSI program.
24. Visitor’s Income – Visitor’s income is not included if they have been in the unit less than 14 consecutive days, or for less than 30 total days in a 12 month period. If the visitor is a caretaker for children, in the absence of their guardian, the caretaker can remain in the unit as a visitor until a determination of custody is made.