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Section 8/Housing Choice Voucher Administrative Plan
Copyright 2014 City of Dubuque Consent Items # 14. ITEM TITLE: Section 8/Housing Choice Voucher Administrative Plan Amendments SUMMARY: City Manager recommending approval of a resolution approving changes to the Housing Choice Voucher/Section 8 Administrative Plan. RESOLUTION Approving amendments to the Section 8 Administrative Plan SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s) ATTACHMENTS: Description Type Proposed Administrati e Plan Changes for Section 8/Housing Choice Voucher Administrati e Plan-MVM City Manager Memo Memo Staff memo Staff Memo Exhibit Supporting Documentation Exhibit B Supporting Documentation Exhibit Supporting Documentation Resolution Resolutions THE CITY OF Dubuque UBE I erica .i Masterpiece on the Mississippi 2007-2012-2013 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Proposed Administrative Plan Changes for Section 8/Housing Choice Voucher Administrative Plan for City Council Approval DATE: February 8, 2016 Housing and Community Development Department Director Alvin Nash recommends City Council approval of a Resolution approving changes to the Housing Choice Voucher/Section 8 Administrative Plan. The proposed amendment to the Administrative Plan makes changes to Chapter 5, 6, and 11 of the plan as follows: Chapter 5 Briefings and Voucher Issuance; Part I Section 5-I.B.Briefing Notification and Attendance adjusts the time to allow applicants arriving within 15 minutes after the scheduled time of the briefing to attend the briefing. This allows additional time for applicants to locate the Federal Building and find appropriate parking to attend the briefing. Chapter 6 Income and Subsidy Determinations; Part III Calculating Family Share and PHA Subsidy sets the minimum rent for this locality at $0.00 and removes hardship exemptions. Chapter 11 Reexaminations, 11-II.C. Changes Affecting Income or Expenses, PHA-Initiated Interim Reexaminations proposes that while all changes in income are required to be reported, the family share of the rent will be processed only when the gross income increases by $200 or more per month. This proposal will be more efficient for processing interim reexaminations. I concur with the recommendation and respectfully request Mayor and City Council approval. Mic ael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager Alvin Nash, Housing & Community Development Department Director 2 THE CITY OF Dubuque AII-Ame1 rica City DUBgkE r Masterpiece on the Mississippi 2007.2012.2013 TO: Michael C. Van Milligen, City Manager FROM: Alvin Nash, Director Housing and Community Development SUBJECT: Proposed Administrative Plan Changes for Section 8/Housing Choice Voucher Administrative Plan for City Council Approval DATE: February 3, 2016 Introduction The purpose of the memorandum is to request the City Council's approval of the attached resolution approving changes to the Housing Choice Voucher/Section 8 Administrative Plan. Background Federal regulations require Housing Authorities to prepare and maintain an Administrative Plan. The authority for Public Housing Authority policies is derived from federal statutes, federal regulations, guidance issued by HUD, state law, and local policy. Changes to the administrative plan require review by the Resident Advisory Board, the Housing Commission, the City Council and HUD. The Voluntary Compliance Agreement requires changes to the administrative plan be reviewed by HUD for approval, submitted to the Resident Advisory Board, followed by the City's Housing Commission for public comment and approval, and to the City Council for final approval. After City Council approval, the City will fully adopt and implement the amended Administrative Plan. Discussion The proposed amendment to the Administrative Plan makes changes to Chapter 5, 6, and 11 of the plan. The Chapters with red-line changes are included in Exhibit A, B, and C respectively. Exhibit A: Chapter 5 Briefings and Voucher Issuance; Part I Section 5-I.B.Briefing Notification and Attendance (page 5-2) proposed change adjusts the time to allow applicants arriving within 15 minutes after the scheduled time of the briefing to attend the briefing. This allows additional time for applicants to locate the Federal Building and find appropriate parking to attend the briefing. Anyone attending within the first fifteen minutes will need to stay an additional amount of time to review topics covered within that time frame. The previous policy stated that if the applicant arrived one minute after the scheduled time of the briefing, the applicant would not be allowed into the briefing meeting. This policy often caused hardships for applicants that are not familiar with locations of the office and parking. Exhibit B: Chapter 11 Reexaminations, 11-II.C. Changes Affecting Income or Expenses, PHA-Initiated Interim Reexaminations (Page 11-10 to 11-11) proposes that while all changes in income are required to be reported, the family share of the rent will be processed only when the gross income increases by $200 or more per month. This proposal will be more efficient for processing interim reexaminations and will alleviate any administrative burden. The previous policy indicated that an interim reexamination would be performed whenever the family's income changes in any amount. Staff has indicated that often the dollar amounts of the changes in income did not result in an increased amount of family share of rent and was burdensome to calculate each change and provide notices to the family. By setting an increase dollar amount, only those changes that significantly affect tenant share of rent will be recalculated and will be processed in a more efficient manner. Exhibit C: Chapter 6 Income and Subsidy Determinations; Part III Calculating Family Share and PHA Subsidy (Pages 6-45, 6-47 to 6-50) proposed change sets the minimum rent for this locality at $0.00 and removes hardship exemptions. The previous policy set a minimum rent for this locality at $50/month allowing for an appeal. The appeal process included the determination of financial hardships along with the length of time for the hardships. The financial hardships were split by temporary hardships lasting 90 days or less or long term hardships defined as expected to last more than 90 days. The process of this determination along with temporary hardships included scheduling and holding an appeal, calculation of repayment agreements and additional monitoring for the repayments. Commission Action The Resident Advisory Board reviewed the changes on November 19, 2015. No objections were received. The Housing Commission reviewed and approved the proposed amendments at the January 26, 2016meeting. Action Step The action requested of the City Council is to approve the Mayor's execution of the attached resolution, approving the amendments to the Section 8 Administrative Plan. Prepared by Janet Walker, Assisted Housing Supervisor 2 RESOLUTION NO. 41-16 RESOLUTION APPROVING AMENDMENTS TO THE SECTION 8 ADMINISTRATIVE PLAN Whereas, the City of Dubuque is designated as a Public Housing Authority; and Whereas, the City of Dubuque maintains a comprehensive Public Housing Agency Plan; and Whereas, the City of Dubuque desires to amend said Public Housing Agency Plan; and Whereas, said amendments are approved by HUD, Resident Advisory Board and the Housing Commission, the amendments must be approved by resolution of the City Council for adoption and implementation; and Whereas, the Housing Commission held a public meeting on January 26, 2016; and Whereas, the Housing Commission voted to approve said amendments and recommended approval by the City Council. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the Section 8 Administrative Plan is hereby amended to adopt the changes to the Plan adjusting arrival time for applicants to attend briefings, attached hereto as Exhibit A. Section 2. That the Section 8 Administrative Plan is hereby amended to adopt the changes to the Plan for processing interim reexaminations, attached hereto as Exhibit B. Section 3. That the Section 8 Administrative Plan is hereby amended to adopt the changes to the Plan setting the minimum rent for this locality at $0.00 and removing hardship exemptions, attached hereto as Exhibit C. Passed, approved and adopted this 15th day of February, 201 -0 , 1J4, " r- ri Roy D BV01, Mayor Attest: Ke in Firnstahl,k Ci Jerk Exhibit A: Chapter 5 BRIEFINGS AND VOUCHER ISSUANCE INTRODUCTION This chapter explains the briefing and voucher issuance process. When a family is determined to be eligible for the Housing Choice Voucher(HCV)program, the PHA must ensure that the family fully understands the way the program operates and the family's obligations under the program. This is accomplished through both an oral briefing and provision of a briefing packet containing the HUD-required documents and other information the family needs to know in order to lease a unit under the program. Once the family is fully informed of the program's requirements,the PHA issues tqe family a voucher. The voucher includes the unit size for which the family qualifies based on the PHA's subsidy standards, as well as the issue and expiration date of the voucher. The voucher is the document that authorizes the family to begin its search for a unit, and limits the amount of time the family has to successfully locate an acceptable unit. This chapter describes HUD regulations and PHA policies related to these topics in two parts: Part L Briefings and Family Obligations. This part details the program's requirements for briefing families orally, and for providing written materials describing the program and its requirements. It includes a particular focus on the family's obligations under the program. Part IL Subsidy Standards and Voucher Issuance. This part discusses the PHA's standards for determining how many bedrooms a family of a given composition qualifies for, which in turn affects the amount of subsidy the family can receive. It also discusses the policies that dictate how vouchers are issued, and how long families have to locate a unit. PART I: BRIEFINGS AND FAMILY OBLIGATIONS 5-LA. OVERVIEW HUD regulations require the PHA to conduct mandatory briefings for applicant families who qualify for a voucher. The briefing provides a broad description of owner and family responsibilities, explains the PHA's procedures, and includes instructions on how to lease a unit. This part describes how oral briefings will be conducted, specifies what written information will be provided to families, and lists the family's obligations under the program. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-1 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. 5-LB. BRIEFING [24 CFR 982.3011 The PHA must give the family an oral briefing and provide the family with a briefing packet containing written information about the program. Families may be briefed individually or in groups. At the briefing, the PHA must ensure effective communication in accordance with Section 504 requirements (Section 504 of the Rehabilitation Act of 1973), and ensure that the briefing site is accessible to individuals with disabilities. For a more thorough discussion of accessibility requirements, refer to Chapter 2. PHA Policv Briefings will be conducted in group meetings. Generally, all adult family members are required to attend the briefing. If any adult member is unable to attend, the PHA may waive this requirement as long as the head of household attends the briefing. Families that attend group briefings and still need individual assistance will be referred to an appropriate PHA staff person. Briefings will be conducted in English. For limited English proficient(LEP) applicants, the PHA will provide translation services in accordance with the PHA's LEP plan (See Chapter 2). Notification and Attendance PHA Policv Families will be notified of their eligibility for assistance at the time they are invited to attend a briefing. The notice will identify who is required to attend the briefing, as well as the date and time of the scheduled briefing. If the notice is returned by the post office with no forwarding address, the applicant will be contacted by telephone call, e-mail or by applicant's authorized additional contact person to inform the applicant of the date and time of the scheduled briefing. If PHA staff is unable to reach the applicant because of changes in address or phone that the applicant had failed to provide to the PHA,then the applicant will be denied and their name will not be placed back on the waiting list. Applicants who fail to attend a scheduled briefing will be scheduled for another briefing automatically. The PHA will notify the family of the date and time of the second scheduled briefing. Applicants who fail to attend two scheduled briefings, without prior PHA approval, will be denied assistance (see Chapter 3). If an applicant arrives late to the briefing session, he/she will not be allowed to attend the briefing. An applicant is considered late if the applicant arrives enemore than fifteen (15) minutes after the scheduled time of the briefing. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-2 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. Oral Briefing [24 CFR 982.301(a)] Each briefing must provide information on the following subjects: • How the Housing Choice Voucher program works; • Family and owner responsibilities; • Where the family can lease a unit, including renting a unit inside or outside the PHA's jurisdiction; • For families eligible under portability, an explanation of portability. The PHA cannot discourage eligible families from moving under portability; • For families living in high-poverty census tracts, an explanation of the advantages of moving to areas outside of high-poverty concentrations. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-3 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. Briefing Packet [24 CFR 982.301(b)] Documents and information provided in the briefing packet must include the following: • The term of the voucher, and the PHA's policies on any extensions or suspensions of the term. If the PHA allows extensions,the packet must explain how the family can request an extension. • A description of the method used to calculate the housing assistance payment for a family, including how the PHA determines the payment standard for a family, how the PHA determines total tenant payment for a family, and information on the payment standard and utility allowance schedule. • An explanation of how the PHA determines the maximum allowable rent for an assisted unit. • Where the family may lease a unit. For a family that qualifies to lease a unit outside the PHA jurisdiction under portability procedures,the information must include an explanation of how portability works. • The HUD-required tenancy addendum, which must be included in the lease. • The form the family must use to request approval of tenancy, and a description of the procedure for requesting approval for a tenancy. • A statement of the PHA policy on providing information about families to prospective owners. • The PHA subsidy standards including when and how exceptions are made. • The HUD brochure on how to select a unit. • The HUD pamphlet on lead-based paint entitled Protect Your Family from Lead in Your Home. • Information on federal, state and local equal opportunity laws and a copy of the housing discrimination complaint form. • A list of landlords or other parties willing to lease to assisted families or help families find units, especially outside areas of poverty or minority concentration. • Notice that if the family includes a person with disabilities,the family may request a list of available accessible units known to the PHA. • The family obligations under the program, including any obligations of a welfare-to-work family. • The grounds on which the PHA may terminate assistance for a participant family because of family action or failure to act. • PHA informal hearing procedures including when the PHA is required to offer a participant family the opportunity for an informal hearing, and how to request the hearing. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-4 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. If the PHA is located in a metropolitan area, the following additional information must be included in the briefing packet in order to receive full points under SEMAP Indicator 7, Expanding Housing Opportunities [24 CFR 985.3(g)]: This indicator applies only to PHAs with jurisdiction in metropolitan FMR areas. The indicator shows whether the PHA has adopted and implemented a written policy to encourage participation by owners of units located outside areas of poverty or minority concentration; informs rental voucher holders of the full range of areas where they may lease units both inside and outside the PHA's jurisdiction; and supplies a list of landlords or other parties who are willing to lease units or help families find units, including units outside areas of poverty or minority concentration. (24 CFR 982.54(d)(5), 982.301(a) and 982.301(b)(4)and 982.301(b)(12)) • Maps showing areas with housing opportunities outside areas of poverty or minority concentration, both within its jurisdiction and its neighboring jurisdiction • Information about the characteristics of these areas including job opportunities, schools, transportation, and other services • An explanation of how portability works, including a list of portability contact persons for neighboring PHAs with names, addresses, and telephone numbers Additional Items to Be Included in the Briefing Packet In addition to items required by the regulations, PHAs may wish to include supplemental materials to help explain the program to both participants and owners [HCV GB p. 8-7, Notice PIH 2010-19]. PHA Policv The PHA will provide the following additional materials in the briefing packet: Information on how to fill out and file a housing discrimination complaint form Information about the protections afforded by the Violence against Women Act of 2005 (VAWA)to victims of domestic violence, dating violence, and stalking(see section 16-IX.C) Information about the protections afforded by the Protecting Tenants at Foreclosure Act(PTFA) (see section 13-IIG) "Is Fraud Worth It?" (form HUD-1141-OIG), which explains the types of actions a family must avoid and the penalties for program abuse "What You Should Know about EIV," a guide to the Enterprise Income Verification (EIV) system published by HUD as an attachment to Notice PIH 2010-19 A description of the Family Self-Sufficiency program and an explanation of how to apply Notification that the applicant must report any changes in family composition and/or income during the period between issuance of the Voucher and execution of the HAP Voucher Contract. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-5 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. 5-LC. FAMILY OBLIGATIONS Obligations of the family are described in the housing choice voucher(HCV)regulations and on the voucher itself. These obligations include responsibilities the family is required to fulfill, as well as prohibited actions. The PHA must inform families of these obligations during the oral briefing, and the same information must be included in the briefing packet. When the family's unit is approved and the HAP contract is executed, the family must meet those obligations in order to continue participating in the program. Violation of any family obligation may result in termination of assistance, as described in Chapter 12. Time Frames for Reporting Changes Required By Family Obligations PHA Policv Unless otherwise noted below, when family obligations require the family to respond to a request or notify the PHA of a change, notifying the PHA of the request or change within 10 business days is considered prompt notice. When a family is required to provide notice to the PHA,the notice must be in writing unless the family has requested and received a reasonable accommodation to provide notices in a different manner. Verbal communication will be allowed if the family is limited by disability and is unable to offer the requested written notice or if the family does not possess the ability(LEP, illiterate). Family Obligations [24 CFR 982.5511 The family obligations of the voucher are listed as follow: • The family must supply any information that the PHA or HUD determines to be necessary, including submission of required evidence of citizenship or eligible immigration status. • The family must supply any information requested by the PHA or HUD for use in a regularly scheduled reexamination or interim reexamination of family income and composition. • The family must disclose and verify social security numbers and sign and submit consent forms for obtaining information. • Any information supplied by the family must be true and complete. • The family is responsible for any Housing Quality Standards (HQS)breach by the family caused by failure to pay tenant-provided utilities or appliances, or damages to the dwelling unit or premises beyond normal wear and tear caused by any member of the household or guest. PHA Policv Damages beyond normal wear and tear will be considered to be damages that could be assessed against the security deposit. • The family must allow the PHA to inspect the unit at reasonable times and after reasonable notice, as described in Chapter 8 of this plan. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-6 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. • The family must not commit any serious or repeated violation of the lease. PHA Policv The PHA will determine if a family has committed serious or repeated violations of the lease based on available evidence, including but not limited to, a court-ordered eviction or an owner's notice to evict, police reports, and affidavits from the owner, neighbors, or other credible parties with direct knowledge. Serious and repeated lease violations will include, but not be limited to, nonpayment of rent, disturbance of neighbors, or destruction of property, living or housekeeping habits that cause damage to the unit or premises, or criminal activity. Generally,the criterion to be used will be whether or not the reason for the eviction was the fault of the tenant. Any incidents of, or criminal activity related to, domestic violence, dating violence, or stalking will not be construed as serious or repeated lease violations by the victim [24 CFR 5.2005(c)(1)]. • The family must notify the PHA and the owner before moving out of the unit or terminating the lease. PHA Policv The family must comply with lease requirements regarding written notice to the owner. The family must provide written notice to the PHA at the same time the owner is notified. • The family must promptly give the PHA a copy of any owner eviction notice. • The family must use the assisted unit for residence by the family. The unit must be the family's only residence. PHA Policv The assisted unit must be the only place of residence for the family. No other residence or address may be used without written approval from the HA (only given in cases of medical necessities to reside elsewhere or other extenuating circumstances). Under no circumstances shall an assisted housing unit be used for places of furlough for anyone that is incarcerated. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-7 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. • The composition of the assisted family residing in the unit must be approved by the PHA. The family must promptly notify the PHA in writing of the birth, adoption, or court-awarded custody of a child. The family must request PHA approval to add any other family member as an occupant of the unit. PHA Policv The family must notify the PHA in writing of the birth, adoption, or court-awarded custody of a child within 30 days. The written notice must be accompanied with verification of the household membership change unless the participant is unable to provide the written notice due to limited English proficiency, a disability that may prohibit the participant from being able to provide written verification or the participant's notification to staff members of illiteracy. In those cases, verbal notice may be allowed along with the required verification. Verification shall include birth certificate (or identity verification), social security card and income of or for the additional member. Any addition of a family member that is not due to birth, adoption, or court-awarded custody, must be approved by the landlord and the HA including requesting a live-in aide, foster child or any other person. The request to add an adult family member must be submitted in writing and approved by the PHA. The adult member may not reside or move into the unit until written permission is granted by the PHA. All requests to add an additional adult family member must be accompanied by a written agreement by the landlord allowing the adult member to be added to the household. The PHA will determine eligibility of the new member in accordance with the policies in Chapter 3. Family income must be reported and include any income of any additional family member. The HA must conduct a reexamination utilizing additional income, and must make appropriate adjustments in the housing assistance payment and family unit size. • The family must promptly notify the PHA in writing if any family member no longer lives in the unit. PHA Policy The family must notify the PHA in writing within 14 calendar days if any family member no longer lives in the unit. Verbal notice shall be allowed if the participant is unable to provide written notice due to limited English proficiency, a disability that may prohibit the participant from being able to provide written notice or the participant's notification to staff of illiteracy. • If the PHA has given approval, a foster child or a live-in aide may reside in the unit. The PHA has the discretion to adopt reasonable policies concerning residency by a foster child or a live-in aide, and to define when PHA consent may be given or denied. For policies related to the request and approval/disapproval of foster children,foster adults, and live-in aides, see Chapter 3 (sections LK and LM), and Chapter 11 (section ILB). ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-8 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. • The family must not sublease the unit, assign the lease, or transfer the unit. PHA Policv Subleasing includes receiving payment to cover rent and utility costs by a person living in the unit who is not listed as a family member (approved member of an assisted family). • The family must supply any information requested by the PHA to verify that the family is living in the unit or information related to family absence from the unit. • The family must promptly notify the PHA when the family is absent from the unit. PHA Policy Notice is required under this provision when any family member will be absent from the unit for an extended period. An extended period is defined as any period greater than two weeks or 14 calendar days. Written notice must be provided to the PHA and the property owner/manager at the start of the extended absence. Verbal notice shall be allowed if the participant is unable to provide written notice due to limited English proficiency, a disability that may prohibit the participant from being able to provide written notice or the participant's notification to staff of illiteracy. Any absences extending beyond 30 consecutive days must have PHA approval in writing prior to the absence. The family may apply for PHA approval for an extended absence by submitting a written request to the PHA and the owner prior to the absence. The family must allow sufficient time for a written response by the HA (no less than two weeks.) Absences of 30 days or longer without prior written HA approval shall be considered abandonment of the unit. Approval for absences from residence and address usage longer than 30 days shall be given due to physician-approved medical causes. However, in no instance shall the tenant be absent from the assisted unit for more than 180 consecutive calendar days. Absences for longer than 180 consecutive calendar days shall be cause for termination. • The family must pay utility bills and provide and maintain any appliances that the owner is not required to provide under the lease [Form HUD-52646, Voucher]. PHA Policv All utilities and services for which the participant is responsible shall be provided in an approved family member's name (approved member of an assisted family)unless prior authorization is granted by the Housing Agency. Any violation of this policy shall be cause for termination. • The family must not own or have any interest in the unit, (other than in a cooperative and owners of a manufactured home leasing a manufactured home space). • Family members must not commit fraud, bribery, or any other corrupt or criminal act in connection with the program. (See Chapter 14, Program Integrity for additional information). ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-9 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. • Family members must not engage in drug-related criminal activity or violent criminal activity or other criminal activity that threatens the health, safety or right to peaceful enjoyment of other residents and persons residing in the immediate vicinity of the premises. See Chapter 12 for HUD and PHA policies related to drug-related and violent criminal activity. • Members of the household must not engage in abuse of alcohol in a way that threatens the health, safety or right to peaceful enjoyment of the other residents and persons residing in the immediate vicinity of the premises. See Chapter 12 for a discussion of HUD and PHA policies related to alcohol abuse. • An assisted family or member of the family must not receive HCV program assistance while receiving another housing subsidy, for the same unit or a different unit under any other federal, state or local housing assistance program. • A family must not receive HCV program assistance while residing in a unit owned by a parent, child, grandparent, grandchild, sister or brother of any member of the family, unless the PHA has determined (and has notified the owner and the family of such determination) that approving rental of the unit, notwithstanding such relationship, would provide reasonable accommodation for a family member who is a person with disabilities. [Form HUD-52646, Voucher] ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-10 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. PART II: SUBSIDY STANDARDS AND VOUCHER ISSUANCE 5-ILA. OVERVIEW The PHA must establish subsidy standards that determine the number of bedrooms needed for families of different sizes and compositions. This part presents the policies that will be used to determine the family unit size (also known as the voucher size) a particular family should receive, and the policies that govern making exceptions to those standards. The PHA must also establish policies related to the issuance of the voucher,to the voucher term, and to any extensions or suspensions of the voucher term. 5-II.B. DETERMINING FAMILY UNIT (VOUCHER) SIZE [24 CFR 982.4021 For each family,the PHA determines the appropriate number of bedrooms under the PHA subsidy standards and enters the family unit size on the voucher that is issued to the family. The family unit size does not dictate the size of unit the family must actually lease, nor does it determine who within a household will share a bedroom/sleeping room. The following requirements apply when the PHA determines family unit size: • The subsidy standards must provide for the smallest number of bedrooms needed to house a family without overcrowding. • The subsidy standards must be consistent with space requirements under the housing quality standards. • The subsidy standards must be applied consistently for all families of like size and composition. • A child who is temporarily away from the home because of placement in foster care is considered a member of the family in determining the family unit size. • A family that consists of a pregnant woman (with no other persons) must be treated as a two- person family. • Any live-in aide (approved by the PHA to reside in the unit to care for a family member who is disabled or is at least 50 years of age)must be counted in determining the family unit size; ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-11 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. • Unless a live-in-aide resides with a family,the family unit size for any family consisting of a single person must be either a zero- or one-bedroom unit, as determined under the PHA subsidy standards. PHA Policv Bedroom size assignments on Vouchers will be made so that the smallest number of bedrooms needed to house a family without overcrowding shall be issued. The subsidy standards will be consistent with space requirements under the City of Dubuque Housing Code. The subsidy standards will be applied consistently for all families of like size and composition. A child who is temporarily away from the home because of placement in foster care is considered a member of the family in determining the family unit size. A family that consists of a pregnant woman (with no other persons)must be treated as a two- person family(parent/minor child) and shall be assigned a two bedroom voucher. Any live-in aide (approved by the PHA to reside in the unit to care for a family member who is disabled)must be counted as a person residing in the household in determining the family unit size and shall be issued a separate bedroom. (Also see Verification Requirements in Chapter 7.) In the case of a participant who shares custody of a child (or children)with a parent or guardian residing outside of the household, the child shall be included as a member of the household when considering the assignment of bedroom size if the child (or children) legally reside with the participant and is considered a household member. Disabled household members shall be provided separate bedrooms in cases of disabled household members receiving supportive services to enhance independent living from another agency. The bedroom size assignments on Vouchers shall be made according to the number of persons and relationship in the household. Two persons shall be assigned to each bedroom/sleeping room in cases of children or adults cohabitating and/or married. The PHA will assign one bedroom for each two persons within the household, except in the following circumstances: Head of Household residing with an adult or minor child shall be allocated separate bedrooms resulting in a two bedroom Voucher. Head of Household who is residing with more than one adult or minor child under the age of 10 years old shall be allocated Voucher size allowing for two persons per bedroom and a separate bedroom for head of household that includes spouse/cohabitant. In determining Voucher size for parent(s) including cohabitant, a separate bedroom shall be allocated for the head of household/spouse/cohabitant and a separate bedroom for more than one adult or minor children of opposite sex age 10 years or older. Same sex adult or minor children shall be allocated one bedroom for each two persons. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-12 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. Adding additional persons to the household shall not increase the voucher issuance until the annual recertification or unit change, if needed, as long as adding the person does not overcrowd the current unit. The dwelling unit must have at least one bedroom or living/sleeping room for each two persons The PHA will reference the following chart in determining the appropriate voucher size for a family: Voucher Size Persons in Household (Minimum—Maximum) 1 Bedroom 1-2 2 Bedrooms 2-4 3 Bedrooms 3-6 4 Bedrooms 5-8 5 Bedrooms 7-10 6 Bedrooms 9-12 ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-13 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. 5-II.C. EXCEPTIONS TO SUBSIDY STANDARDS In determining family unit size for a particular family, the PHA may grant an exception to its established subsidy standards if the PHA determines that the exception is justified by the age, sex, health, handicap, or relationship of family members or other personal circumstances [24 CFR 982.402(b)(8)]. Reasons may include, but are not limited to: • A need for an additional bedroom for medical equipment • A need for a separate bedroom for reasons related to a family member's disability, medical or health condition For a single person who is not elderly, disabled, or a remaining family member, an exception cannot override the regulatory limit of a zero or one bedroom [24 CFR 982.402(b)(8)]. PHA Policv The PHA will consider granting an exception for any of the reasons specified in the regulation: the age, sex, health, disability, or relationship of family members or other personal circumstances. The family must request any exception to the subsidy standards in writing, whenever possible. The request must explain the need or justification for a larger family unit size, and must include appropriate documentation. Requests based on health-related reasons must be verified by a knowledgeable professional source (e.g., doctor or health professional, peer support group, non-medical service agency or a reliable third party who is in a position to know about the individual's disability), unless the disability and the disabilityrelatedrequest for accommodation is readily apparent or otherwise known. The family's continued need for an additional bedroom due to special medical equipment must be re-verified at annual reexamination. The PHA will notify the family of its determination within 10 business days of receiving the family's request. If a participant family's request is denied, the notice will inform the family of their right to request an informal hearing. Verbal requests shall be allowed if the participant is unable to provide written notice due to limited English proficiency, a disability that may prohibit the participant from being able to provide written request or the participant's notification to staff of illiteracy. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-14 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. 5-II.D. VOUCHER ISSUANCE AND RESCISSIONS [24 CFR 982.3021 When a family is selected from the waiting list(or as a special admission as described in Chapter 4), or when a participant family wants to move to another unit, the PHA issues a Housing Choice Voucher, form HUD-52646. This chapter deals only with voucher issuance for applicants. For voucher issuance associated with moves of program participants, please refer to Chapter 10. The voucher is the family's authorization to search for housing. It specifies the unit size for which the family qualifies, and includes both the date of voucher issuance and date of expiration. It contains a brief description of how the program works and explains the family obligations under the program. The voucher is evidence that the PHA has determined the family to be eligible for the program, and that the PHA expects to have money available to subsidize the family if the family finds an approvable unit. However, the PHA does not have any liability to any party by the issuance of the voucher, and the voucher does not give the family any right to participate in the PHA's housing choice voucher program [Voucher, form HUD-52646] A voucher can be issued to an applicant family only after the PHA has determined that the family is eligible for the program based on verification of information received within the 60 days prior to issuance [24 CFR 982.201(e)] and after the family has attended an oral briefing [HCV 8-1]. PHA Policv Vouchers will be issued to eligible applicants immediately following the mandatory briefing or as soon as a voucher becomes available. The PHA should have sufficient funds to house an applicant before issuing a voucher. If funds are insufficient to house the family at the top of the waiting list, the PHA must wait until it has adequate funds before it calls another family from the list [HCV GB p. 8-10]. PHA Policv Prior to issuing any vouchers,the PHA will determine whether it has sufficient funding in accordance with the policies in Part VIII of Chapter 16. If the PHA determines that there is insufficient funding after a voucher has been issued,the PHA may rescind the voucher and place the affected family back on the waiting list. PHA Policv Although vouchers are issued on the basis that the PHA will have enough money to subsidize families that locate an approvable unit within the term of their voucher, it is possible for the PHA to discover after vouchers have been issued that there is not enough funding to provide subsidy to all of the applicant families that are currently searching for a unit. If this occurs, the PHA may need to rescind vouchers. If, due to budgetary constraints,the PHA must rescind vouchers that have already been issued to families, the PHA will do so according to the instructions under each of the categories below. The PHA will first rescind vouchers that fall under Category 1. Vouchers in Category 2 will only be rescinded after all vouchers under Category 1 have been rescinded. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-15 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. Category 1: Vouchers for which a Request for Tenancy Approval (RTA) and proposed lease have not been submitted to the PHA. Vouchers will be rescinded in order of the date and time they were issued, starting with the most recently issued vouchers. Category 2: Vouchers for which a Request for Tenancy Approval and proposed lease have been submitted to the PHA. Vouchers will be rescinded in order of the date and time the RTA was submitted to the PHA, starting with the most recently submitted requests. Families who have their voucher rescinded will be notified in writing. When funding is again available, families will be selected from the waiting list in accordance with PHA selection policies described in Chapter 4. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-16 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. 5-II.E. VOUCHER TERM, EXTENSIONS, AND SUSPENSIONS Voucher Term [24 CFR 982.3031 The initial term of a voucher must be at least 60 calendar days. The initial term must be stated on the voucher [24 CFR 982.303(a)]. PHA Policv The initial voucher term will be 60 calendar days. The family must submit a Request for Tenancy Approval and proposed lease within the 60-day period unless the PHA grants an extension. Extensions of Voucher Term [24 CFR 982.303(b)] The PHA has the authority to grant extensions of search time, to specify the length of an extension, and to determine the circumstances under which extensions will be granted. There is no limit on the number of extensions that the PHA can approve. Discretionary policies related to extension and expiration of search time must be described in the PHA's administrative plan [24 CFR 982.54]. PHAs must approve additional search time if needed as a reasonable accommodation to make the program accessible to and usable by a person with disabilities. The extension period must be reasonable for the purpose. The family must be notified in writing of the PHA's decision to approve or deny an extension. The PHA's decision to deny a request for an extension of the voucher term is not subject to informal review [24 CFR 982.554(c)(4)]. PHA Policv The PHA will automatically approve one 30-day extension upon written request from the family. The PHA will approve additional 30-day extensions only in the following circumstances: It is necessary as a reasonable accommodation for a person with disabilities. It is necessary due to reasons beyond the family's control, as determined by the PHA. Following is a list of extenuating circumstances that the PHA may consider in making its decision. The presence of these circumstances does not guarantee that an extension will be granted: Serious illness or death in the family Other family emergency Obstacles due to employment Whether the family has already submitted requests for tenancy approval that were not approved by the PHA Whether family size or other special circumstances make it difficult to find a suitable unit ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-17 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. Any request for an additional extension must include the reason(s) an additional extension is necessary. The PHA may require the family to provide documentation to support the request or obtain verification from a qualified third party. All requests for extensions to the voucher term must be made in writing and submitted to the PHA prior to the expiration date of the voucher (or extended term of the voucher). The PHA will decide whether to approve or deny an extension request within 10 business days of the date the request is received, and will immediately provide the family written notice of its decision. Verbal requests shall be allowed if the participant is unable to provide written notice due to limited English proficiency, a disability that may prohibit the participant from being able to provide written request or the participant's notification to staff of illiteracy. Suspensions of Voucher Term [24 CFR 982.303(c)] At its discretion, a PHA may adopt a policy to suspend the housing choice voucher term if the family has submitted a Request for Tenancy Approval (RTA) during the voucher term. "Suspension"means stopping the clock on a family's voucher term from the time a family submits the RTA until the time the PHA approves or denies the request [24 CFR 982.4]. The PHA's determination not to suspend a voucher term is not subject to informal review [24 CFR 982.554(c)(4)]. PHA Policv When a Request for Tenancy Approval and a proposed lease are received by the PHA, the term of the voucher will be suspended while the PHA processes the request. When the PHA denies a request for tenancy,the family will be notified immediately that the clock on the voucher term has restarted. The notice will include the new expiration date of the voucher. Expiration of Voucher Term Once a family's housing choice voucher term (including any extensions) expires, the family is no longer eligible to search for housing under the program. If the family still wishes to receive assistance, the PHA may require that the family reapply, or may place the family on the waiting list with a new application date but without requiring reapplication. Such a family does not become ineligible for the program on the grounds that it was unable to locate a unit before the voucher expired [HCV GB p. 8-13]. PHA Policv If an applicant family's voucher term or extension expires before the family has submitted a Request for Tenancy Approval (RTA), the PHA will require the family to reapply for assistance. Within 10 business days after the expiration of the voucher term or any extension,the PHA will notify the family in writing that the voucher term has expired and that the family must reapply in order to be placed on the waiting list. ©Copyright 2013 Nan McKay&Associates,Inc. Page 5-18 City of Dubuque Adminplan 11/2015 Unlimited copies may be made for internal use. Exhibit B: Chapter 11 REEXAMINATIONS INTRODUCTION The PHA is required to reexamine each family's income and composition at least annually, and to adjust the family's level of assistance accordingly. Interim reexaminations are also needed in certain situations. This chapter discusses both annual and interim reexaminations, and the recalculation of family share and subsidy that occurs as a result. HUD regulations and PHA policies concerning reexaminations are presented in three parts: Part L Annual Reexaminations. This part discusses the process for conducting annual reexaminations. Part IL Interim Reexaminations. This part details the requirements for families to report changes in family income and composition between annual reexaminations. Part III: Recalculating Familv Share and Subsidy Amount. This part discusses the recalculation of family share and subsidy amounts based on the results of annual and interim reexaminations. Policies governing reasonable accommodation, family privacy, required family cooperation, and program abuse, as described elsewhere in this plan, apply to both annual and interim reexaminations. PART I: ANNUAL REEXAMINATIONS [24 CFR 982.5161 11-LA. OVERVIEW The PHA must conduct a reexamination of family income and composition at least annually. This includes gathering and verifying current information about family composition, income, and expenses. Based on this updated information, the family's income and rent must be recalculated. This part discusses the schedule for annual reexaminations, the information to be collected and verified, and annual reexamination effective dates. ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-1 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 11-I.B. SCHEDULING ANNUAL REEXAMINATIONS The PHA must establish a policy to ensure that the annual reexamination for each family is completed within a 12-month period, and may require reexaminations more frequently [HCV GB p. 12-1]. PHA Policv The PHA will begin the annual reexamination process 120 days in advance of its scheduled effective date. Generally,the PHA will schedule annual reexamination effective dates to coincide with the family's anniversary date. The first annual recertification and any recertification for families reporting zero income must be a face- to-face interview. After the first year, mail recertifications will be utilized unless the family has had a documented history of not reporting correctly within the previous two years. All families reporting zero income shall meet with a Family Self-Sufficiency Coordinator during their annual reexamination process to discuss opportunities. An interview will be scheduled if the family requests assistance in providing information or documentation requested by the PHA. Anniversary date is defined as 12 months from the effective date of the family's last annual reexamination or, during a family's first year in the program, from the effective date of the family's initial examination (admission). If the family moves to a new unit, the PHA will perform a new annual reexamination. The PHA also may schedule an annual reexamination for completion prior to the anniversary date for administrative purposes. Notification of and Participation in the Annual Reexamination Process The PHA is required to obtain the information needed to conduct annual reexaminations. How that information will be collected is left to the discretion of the PHA. However, PHAs should give tenants who were not provided the opportunity the option to complete Form HUD-92006 (Supplement to Application for Federally Assisted Housing) at this time [Notice PIH 2009-36]. PHA Policv Annual Reexamination Interviews: For the first annual reexamination process, families generally are required to participate in an annual reexamination interview, which must be attended by the head of household, spouse, or cohead. If participation in an in- person interview poses a hardship because of a family member's disability, the family should contact the PHA to request a reasonable accommodation (see Chapter 2). During the first annual reexamination process, families will be required to meet with a Family Self-Sufficiency Coordinator to discuss opportunities. Notification of annual reexamination interviews will be sent by first-class mail and will contain the date,time, and location of the interview. In addition, it will inform the family of the information and documentation that must be brought to the interview. If the family is unable to attend a scheduled interview, the family should contact the PHA in advance of the interview to schedule a new appointment. If a family does not attend ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-2 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. the scheduled interview, the PHA will send a second notification with a new interview date and appointment time. If a family fails to attend two scheduled interviews without PHA approval, or if the notice is returned by the post office with no forwarding address, a notice of termination (see Chapter 12)will be sent to the family's address of record, and to any alternate address provided in the family's file. An advocate, interpreter, or other assistant may assist the family in the interview process. The family and the PHA must execute a certification attesting to the role and the assistance provided by any such third party. Annual Reexaminations Conducted by Mail: After the first year, annual reexaminations will be conducted by mail unless the family has had a documented history of not reporting correctly or has had experiences with family obligation violations within the previous two years or is reporting zero income for the household. Notification of the annual reexamination will be sent by first-class mail and will inform the family of the information and documentation that must be provided to the PHA, and the deadline for providing it. Documents will be accepted by mail, by fax, or in-person. If the notice is returned by the post office with no forwarding address, a notice of termination (see Chapter 12) will be sent to the family's address of record, as well as to any alternate address provided in the family's file. An interview will be scheduled if the family requests assistance in providing information or documentation requested by the PHA. 11-LC. CONDUCTING ANNUAL REEXAMINATIONS As part of the annual reexamination process, families are required to provide updated information to the PHA regarding the family's income, expenses, and composition [24 CFR 982.551(b)]. PHA Policv Families will be asked to bring all required information (as described in the reexamination notice)to the reexamination appointment. The required information will include a PHA-designated reexamination form, an Authorization for the Release of Information/Privacy Act Notice, as well as supporting documents or forms related to the family's income, expenses, and family composition. Any required documents or information that the family is unable to provide at the time of the interview must be provided within 10 business days of the interview. If the family is unable to obtain the information or materials within the required time frame, the family may request an extension. For reexaminations conducted by mail,families will be asked to supply all required information (as described in the reexamination notice)before the deadline specified in the notice. The required information will include a PHA-designated reexamination form, an ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-3 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Authorization for the Release of Information/Privacy Act Notice, as well as supporting documents or forms related to the family's income, expenses, and family composition. The PHA will notify the family in writing if any required documentation or information is missing. The missing information or documentation must be provided within 10 business days of the date the PHA notifies the family. If the family is unable to obtain the information or materials within the required time frame, the family may request an extension. If the family requests or the PHA schedules an in-person interview, families will be asked to bring all required information (as described in the reexamination notice)to the reexamination appointment. Any required documents or information that the family is unable to provide at the time of the interview must be provided within 10 business days of the interview. If the family is unable to obtain the information or materials within the required time frame, the family may request an extension. In all cases, if the family does not provide the required documents or information within the required time period (plus any extensions), the family will be sent a notice of termination (see Chapter 12). The information provided by the family generally must be verified in accordance with the policies in Chapter 7. Unless the family reports a change, or the PHA has reason to believe a change has occurred in information previously reported by the family, certain types of information that are verified at admission typically do not need to be re-verified on an annual basis. These include: • Legal identity • Age • Social security numbers • A person's disability status • Citizenship or immigration status If adding a new family member to the unit causes overcrowding according to the Housing Quality Standards (HQS) (see Chapter 8),the PHA must issue the family a new voucher, and the family and PHA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the PHA must terminate the HAP contract in accordance with its terms [24 CFR 982.403]. ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-4 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 11-I.D. DETERMINING ONGOING ELIGIBILITY OF CERTAIN STUDENTS [24 CFR 982.552(b)(5)] Section 327 of Public Law 109-115 established new restrictions on the ongoing eligibility of certain students (both part- and full-time)who are enrolled in institutions of higher education. If a student enrolled in 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 student's eligibility must be reexamined along with the income eligibility of the student's parents on an annual basis. In these cases, both the student and the student's parents must be income eligible for the student to continue to receive HCV assistance. If, however, a student in these circumstances is determined independent from his or her parents in accordance with PHA policy, the income of the student's parents will not be considered in determining the student's ongoing eligibility. Students who reside with parents in an HCV assisted unit are not subject to this provision. It is limited to students who are receiving assistance on their own, separately from their parents. PHA Policv During the annual reexamination process, the PHA will determine the ongoing eligibility of each student who is subject to the eligibility restrictions in 24 CFR 5.612 by reviewing the student's individual income as well as the income of the student's parents. If the student has been determined "independent"from his/her parents based on the policies in Sections 3-ILE and 7-ILE, the parents' income will not be reviewed. If the student is no longer income eligible based on his/her own income or the income of his/her parents, the student's assistance will be terminated in accordance with the policies in Section 12-LD. If the student continues to be income eligible based on his/her own income and the income of his/her parents (if applicable), the PHA will process a reexamination in accordance with the policies in this chapter. ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-5 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 11-I.E. EFFECTIVE DATES The PHA must establish policies concerning the effective date of changes that result from an annual reexamination [24 CFR 982.516]. PHA Policv In general, an increase in the family share of the rent that results from an annual reexamination will take effect on the family's anniversary date, and the family will be notified at least 30 days in advance. If less than 30 days remain before the scheduled effective date, the increase will take effect on the first of the month following the end of the 30-day notice period. If a family moves to a new unit,the increase will take effect on the effective date of the new lease and HAP contract, and no 30-day notice is required. If the PHA chooses to schedule an annual reexamination for completion prior to the family's anniversary date for administrative purposes,the effective date will be determined by the PHA, but will always allow for the 30-day notice period. If the family causes a delay in processing the annual reexamination, increases in the family share of the rent will be applied retroactively, to the scheduled effective date of the annual reexamination. The family will be responsible for any overpaid subsidy and may be offered a repayment agreement in accordance with the policies in Chapter 16. In general, a decrease in the family share of the rent that results from an annual reexamination will take effect on the family's anniversary date. If a family moves to a new unit,the decrease will take effect on the effective date of the new lease and HAP contract. If the PHA chooses to schedule an annual reexamination for completion prior to the family's anniversary date for administrative purposes,the effective date will be determined by the PHA. If the family causes a delay in processing the annual reexamination, decreases in the family share of the rent will be applied prospectively, from the first day of the month following completion of the reexamination processing. Delays in reexamination processing are considered to be caused by the family if the family fails to provide information requested by the PHA by the date specified, and this delay prevents the PHA from completing the reexamination as scheduled. ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-6 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. PART II: INTERIM REEXAMINATIONS [24 CFR 982.5161 11-ILA. OVERVIEW Family circumstances may change between annual reexaminations. HUD and PHA policies dictate what kinds of information about changes in family circumstances must be reported, and under what circumstances the PHA must process interim reexaminations to reflect those changes. HUD regulations also permit the PHA to conduct interim reexaminations of income or family composition at any time. When an interim reexamination is conducted, only those factors that have changed are verified and adjusted [HCV GB, p. 12-10]. In addition to specifying what information the family must report, HUD regulations permit the family to request an interim determination if other aspects of the family's income or composition changes. The PHA must complete the interim reexamination within a reasonable time after the family's request. This part includes HUD and PHA policies describing what changes families are required to report, what changes families may choose to report, and how the PHA will process both PHA- and family-initiated interim reexaminations. 11-II.B. CHANGES IN FAMILY AND HOUSEHOLD COMPOSITION The family is required to report all changes in family composition. The PHA must adopt policies prescribing when and under what conditions the family must report changes in income and housing composition. However, due to family obligations under the program, the PHA has limited discretion in this area PHA Policv The PHA will conduct interim reexaminations to account for any changes in household composition that occur between annual reexaminations. The PHA requires written notice along with verification of any household membership changes - unless the participant is unable to provide the written notice due to limited English proficiency, a disability that may prohibit the participant from being able to provide written verification or the participant's notification to staff members of illiteracy. In those cases, verbal notice may be allowed along with the required verification forms. New Family Members Not Requiring PHA Approval The addition of a family member as a result of birth, adoption, or court-awarded custody does not require PHA approval. However,the family is required to promptly notify the PHA of the addition [24 CFR 982.551(h)(2)]. PHA Policy The family must inform the PHA of the birth, adoption, or court-awarded custody of a child within 30 days of the occurrence. ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-7 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. New Family and Household Members Requiring Approval With the exception of children who join the family as a result of birth, adoption, or court- awarded custody, a family must request PHA approval to add a new family member [24 CFR 982.55l(h)(2)] or other household member(live-in aide or foster child) [24 CFR 982.55l(h)(4)]. When any new family member is added, the PHA must conduct a reexamination to determine any new income or deductions associated with the additional family member and to make appropriate adjustments in the family share of the rent and the HAP payment [24 CFR 982.516(e)]. If a change in family size causes a violation of Housing Quality Standards (HQS) space standards (see Chapter 8), the PHA must issue the family a new voucher, and the family and PHA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family,the PHA must terminate the family's HAP contract in accordance with its terms [24 CFR 982.403]. PHA Policv Families must request PHA and landlord approval to add a new family member, live-in aide, foster child, or foster adult. This includes any person not on the lease who is expected to stay in the unit for more than 15 consecutive days or 30 cumulative days within a 12-month period and therefore no longer qualifies as a"guest." However, with landlord permission and notification to the PHA, guests may be allowed to stay up to 90 cumulative days. Requests must be made in writing and approved by the PHA prior to the individual moving into the unit. Children who are subject to a joint custody arrangement or for whom a family has visitation privileges,that are not included as a family member because they live outside of the assisted household more than 50 percent of the time, are not subject to the time limitations of guests as described above. A family may request an exception to this policy for valid reasons (e.g., care of a relative recovering from a medical procedure is expected to last 40 consecutive days). An exception will not be made unless the family can identify and provide documentation of the residence to which the guest will return. The PHA will not approve the addition of a new family or household member unless the individual meets the PHA's eligibility criteria(see Chapter 3) and documentation requirements (see Chapter 7, Part II). The PHA will not approve the addition of a foster child or foster adult if it will cause a violation of HQS space standards. If the PHA determines an individual meets the PHA's eligibility criteria and documentation requirements, the PHA will provide written approval to the family. If the approval of a new family member or live-in aide will cause overcrowding according to HQS standards,the approval letter will explain that the family will be issued a voucher and will be required to move. ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-8 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. If the PHA determines that an individual does not meet the PHA's eligibility criteria or documentation requirements, the PHA will notify the family in writing of its decision to deny approval of the new family or household member and the reasons for the denial. The PHA will make its determination within 10 business days of receiving all information required to verify the individual's eligibility. Departure of a Family or Household Member Families must promptly notify the PHA if any family member no longer lives in the unit [24 CFR 982.55l(h)(3)]. Because household members are considered when determining the family unit(voucher) size [24 CFR 982.402], the PHA also needs to know when any live-in aide, foster child, or foster adult ceases to reside in the unit. PHA Policv If a household member ceases to reside in the unit, the family must inform the PHA within 30 days. This requirement also applies to a family member who has been considered temporarily absent at the point that the family concludes the individual is permanently absent. If a live-in aide, foster child, or foster adult ceases to reside in the unit, the family must inform the PHA within 30 days. ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-9 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 11-ILC. CHANGES AFFECTING INCOME OR EXPENSES Interim reexaminations can be scheduled either because the PHA has reason to believe that changes in income or expenses may have occurred, or because the family reports a change. When a family reports a change, the PHA may take different actions depending on whether the family reported the change voluntarily, or because it was required to do so. PHA-Initiated Interim Reexaminations PHA-initiated interim reexaminations are those that are scheduled based on circumstances or criteria defined by the PHA. They are not scheduled because of changes reported by the family. PHA Policy Families are required to report all increases in income other than the annual cost of living allowance increases from the Social Security Administration within 30 days of the date the change takes effect. The PHA will conduct interim reexaminations in each of the following instances: The PHA will conduct an interim reexamination to recalculate the new family share of rent when the gross income increases by $200.00 or more per month. For families receiving the Earned Income Disallowance (EID), the PHA will conduct an interim reexamination at the start and conclusion of the second 12 month exclusion period (50 percent phase-in period). If the family has reported zero income,the PHA will require monthly reporting of all income and expenses until the family obtains a source of income or until historical data from the monthly reports help identify a pattern of income. If at the time of the annual reexamination,tenant-provided documents were used on a provisional basis due to the lack of third-party verification, and third-party verification becomes available, the PHA will retroactively adjust the annual reexamination. The PHA may conduct an interim reexamination at any time in order to correct an error in aprevious reexamination, or to investigate atenant fraud complaint. ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-10 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Family-Initiated Interim Reexaminations The PHA must adopt policies prescribing when and under what conditions the family must report changes in family income or expenses [24 CFR 982.516(c)]. In addition, HUD regulations require that the family be permitted to obtain an interim reexamination any time the family has experienced a change in circumstances since the last determination [24 CFR 982.516(b)(2)]. Required Reporting HUD regulations give the PHA the freedom to determine the circumstances under which families will be required to report changes affecting income. PHA Policv The PHA will conduct interim reexaminations to account for any changes in household composition that occur between annual reexaminations. Families are required to report all increases in income, with the exception of annual cost of living allowance increases from the Social Security Administration within 30 days of the date the change takes effect. The PHA will conduct an interim reexamination to recalculate the new family share of rent when the gross income increases by $200.00 or more per month. Optional Reporting The family may request an interim reexamination any time the family has experienced a change in circumstances since the last determination [24 CFR 982.516(b)(2)]. The PHA must process the request if the family reports a change that will result in a reduced family income [HCV GB, p. 12-9]. If a family reports a decrease in income from the loss of welfare benefits due to fraud or non- compliance with a welfare agency requirement to participate in an economic self-sufficiency program,the family's share of the rent will not be reduced [24 CFR 5.615]. For more information regarding the requirement to impute welfare income see Chapter 6. PHA Policy Families may report changes in expenses at any time. Families are required to report all increases in income, with the exception of annual cost of living allowance increases from the Social Security Administration within 30 days of the date the change takes effect. If a family reports a change that it was not required to report and that would result in a decrease in the family share of rent, the PHA will conduct an interim reexamination. See Section 11-ILD. for effective dates. ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-11 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 11-II.D. PROCESSING THE INTERIM REEXAMINATION Method of Reporting PHA Policy The family may notify the PHA of changes either orally or in writing. If the family provides oral notice, the PHA may also require the family to submit the changes in writing. Generally, the family will not be required to attend an interview for an interim reexamination. However, if the PHA determines that an interview is warranted, the family may be required to attend. Based on the type of change reported, the PHA will determine the documentation the family will be required to submit. The family must submit any required information or documents within 10 business days of receiving a request from the PHA. This time frame may be extended for good cause with PHA approval. The PHA will accept required documentation by mail, by fax, or in person. Participants must complete an Interim Change Report (available at the Housing Office or website)that must be submitted along with verification of all changes from the appropriate employer(s)/agencies unless the participant is unable to provide the written notice due to limited English proficiency, a disability that may prohibit the participant from being able to provide written verification or the participant's notification to staff members of illiteracy. Effective Dates The PHA must establish the time frames in which any changes that result from an interim reexamination will take effect [24 CFR 982.516(d)]. The changes may be applied either retroactively or prospectively, depending on whether there is to be an increase or a decrease in the family share of the rent, and whether the family reported any required information within the required time frames [HCV GB, p. 12-10]. PHA Policv If the family share of the rent is to increase: The increase will be effective on the first of the month following 90 days from the effective date of the income change. If a family fails to report a change within the required time frames, or fails to provide all required information within the required time frames, the increase will be applied retroactively, to the date it would have been effective had the information been provided on a timely basis. The family will be responsible for any overpaid subsidy and may be offered a repayment agreement in accordance with the policies in Chapter 16. If the family share of the rent is to decrease: All decreases in income must be reported in writing and verifications must be received on or before the 20th of a month to be processed with an effective date the 1"day of the following month. Any decreases in income reported after the ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-12 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 201' of a month but on or before the last business day of month will be processed retroactively with an effective date the 1" day of the following month provided the change was received in writing and verifications have been received. ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-13 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. PART III: RECALCULATING FAMILY SHARE AND SUBSIDY AMOUNT 11-IILA. OVERVIEW After gathering and verifying required information for an annual or interim reexamination,the PHA must recalculate the family share of the rent and the subsidy amount, and notify the family and owner of the changes [24 CFR 982.516(d)(2), HCV 12-6 and 12-10]. While the basic policies that govern these calculations are provided in Chapter 6, this part lays out policies that affect these calculations during a reexamination. 11-III.B. CHANGES IN PAYMENT STANDARDS AND UTILITY ALLOWANCES In order to calculate the family share of the rent and HAP amount correctly, changes in payment standards, subsidy standards, or utility allowances may need to be updated and included in the PHA's calculations. Specific policies governing how subsidy standards, payment standards, and utility allowances are applied are discussed below. Payment Standards [24 CFR 982.5051 The family share of the rent and HAP calculations must use the correct payment standard for the family,taking into consideration the family unit size, the size of unit, and the area in which the unit is located [HCV GB, p. 12-5]. See Chapter 6 for information on how to select the appropriate payment standard. When the PHA changes its payment standards or the family's situation changes, new payment standards are applied at the following times: • If the PHA's payment standard amount changes during the term of the HAP contract, the date on which the new standard is applied depends on whether the standard has increased or decreased: - If the payment standard amount has increased, the increased payment standard will be applied at the first annual reexamination following the effective date of the increase in the payment standard. - If the payment standard amount has decreased,the decreased payment standard will be applied at the second annual reexamination following the effective date of the decrease in the payment standard. • 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. ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-14 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Subsidy Standards [24 CFR 982.505(c)(4)] If there is a change in the family unit size that would apply to a family during the HAP contract term, either due to a change in family composition, or a change in the PHA's subsidy standards (see Chapter 5), the new family unit size must be used to determine the payment standard amount for the family at the family's first annual reexamination following the change in family unit size. Utility Allowances [24 CFR 982.517(d)] The family share of the rent and HAP calculations must reflect any changes in the family's utility arrangement with the owner, or in the PHA's utility allowance schedule [HCV GB, p. 12-5]. Chapter 16 discusses how utility allowance schedules are established. When there are changes in the utility arrangement with the owner,the PHA must use the utility allowances in effect at the time the new lease and HAP contract are executed. At reexamination, the PHA must use the PHA current utility allowance schedule [24 CFR 982.517(d)(2)]. PHA Policy Revised utility allowances will be applied to a family's rent and subsidy calculations at the first annual reexamination after the allowance is adopted. 11-III.C. NOTIFICATION OF NEW FAMILY SHARE AND HAP AMOUNT The PHA must notify the owner and family of any changes in the amount of the HAP payment [HUD-52641, HAP Contract]. The notice must include the following information [HCV GB, p. 12-6]: • The amount and effective date of the new HAP payment • The amount and effective date of the new family share of the rent • The amount and effective date of the new tenant rent to owner The family must be given an opportunity for an informal hearing regarding the PHA's determination of their annual or adjusted income, and the use of such income to compute the housing assistance payment [24 CFR 982.555(a)(1)(i)] (see Chapter 16). PHA Policv The notice to the family will include the annual and adjusted income amounts that were used to calculate the family share of the rent and the housing assistance payment. The notice also will state the procedures for requesting an informal hearing. 11-IILD. DISCREPANCIES During an annual or interim reexamination, the PHA may discover that information previously reported by the family was in error, or that the family intentionally misrepresented information. In addition, the PHA may discover errors made by the PHA. When errors resulting in the overpayment or underpayment of subsidy are discovered, corrections will be made in accordance with the policies in Chapter 13.1 ©Copyright 2013 Nan McKay&Associates,Inc. Page 11-15 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Exhibit C: Chapter 6 INCOME AND SUBSIDY DETERMINATIONS [24 CFR Part 5, Subparts E and F; 24 CFR 982] INTRODUCTION A family's income determines eligibility for assistance and is also used to calculate the family's payment and the PHA's subsidy. The PHA will use the policies and methods described in this chapter to ensure that only eligible families receive assistance and that no family pays more or less than its obligation under the regulations. This chapter describes HUD regulations and PHA policies related to these topics in three parts as follows: • Part 1: Annual Income. HUD regulations specify the sources of income to include and exclude to arrive at a family's annual income. These requirements and PHA policies for calculating annual income are found in Part I. • Part Il: Adjusted Income. Once annual income has been established HUD regulations require the PHA to subtract from annual income any of five mandatory deductions for which a family qualifies. These requirements and PHA policies for calculating adjusted income are found in Part 11. • Part III: Calculating Familv Share and PHA Subsidy. This part describes the statutory formula for calculating total tenant payment(TTP),the use of utility allowances, and the methodology for determining PHA subsidy and required family payment. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-1 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. PART I: ANNUAL INCOME 6-LA. OVERVIEW The general regulatory definition of annual income shown below is from 24 CFR 5.609. 5.609 Annual income. (a) Annual income means all amounts, monetary or not, which: (1) Go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or (2) Are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date; and (3) Which are not specifically excluded in paragraph [5.609(c)]. (4) Annual income also means amounts derived (during the 12-month period)from assets to which any member of the family has access. In addition to this general definition, HUD regulations establish policies for treating specific types of income and assets. The full texts of those portions of the regulations are provided in exhibits at the end of this chapter as follows: • Annual Income Inclusions (Exhibit 6-1) • Annual Income Exclusions (Exhibit 6-2) • Treatment of Family Assets (Exhibit 6-3) • Earned Income Disallowance for Persons with Disabilities (Exhibit 6-4) • The Effect of Welfare Benefit Reduction (Exhibit 6-5) Sections 6-L13 and 6-LC discuss general requirements and methods for calculating annual income. The rest of this section describes how each source of income is treated for the purposes of determining annual income. HUD regulations present income inclusions and exclusions separately [24 CFR 5.609(b) and 24 CFR 5.609(c)]. In this plan, however, the discussions of income inclusions and exclusions are integrated by topic (e.g., all policies affecting earned income are discussed together in section 6-LD). Verification requirements for annual income are discussed in Chapter 7. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-2 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-I.B. HOUSEHOLD COMPOSITION AND INCOME Income received by all family members must be counted unless specifically excluded by the regulations. It is the responsibility of the head of household to report changes in family composition. The rules on which sources of income are counted vary somewhat by family member. The chart below summarizes how family composition affects income determinations. Summary of Income Included and Excluded by Person Live-in aides Income from all sources is excluded [24 CFR 5.609(c)(5)]. Foster child or foster adult Income from all sources is excluded [24 CFR 5.609(c)(2)]. Head, spouse, or cohead All sources of income not specifically excluded by the Other adult family members regulations are included. Children under 18 years of age Employment income is excluded [24 CFR 5.609(c)(1)]. All other sources of income, except those specifically excluded by the regulations, are included. Full-time students 18 years of Employment income above $480/year is excluded [24 CFR age or older(not head, spouse, 5.609(c)(11)]. or cohead) All other sources of income, except those specifically excluded by the regulations, are included. PHA Policy Additional information on household composition as it relates to eligibility is found in Chapter 3 of this plan. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-3 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Temporarily Absent Family Members The income of family members approved to live in the unit will be counted, even if the family member is temporarily absent from the unit [HCV GB, p. 5-18]. PHA Policv Generally an individual who is or is expected to be absent from the assisted unit for 180 consecutive days or less is considered temporarily absent and continues to be considered a family member. Generally an individual who is or is expected to be absent from the assisted unit for more than 180 consecutive days is considered permanently absent and no longer a family member. Exceptions to this general policy are discussed below. (Also see Chapter 3 for definition of temporarily absent.) Absent Students PHA Policv When someone who has been considered a family member attends school away from home, the person will continue to be considered a family member unless information becomes available to the PHA indicating that the student has established a separate household or the family declares that the student has established a separate household. Absences Due to Placement in Foster Care Children temporarily absent from the home as a result of placement in foster care are considered members of the family [24 CFR 5.403]. PHA Policv If a child has been placed in foster care,the PHA will verify with the appropriate agency whether and when the child is expected to be returned to the home. Unless the agency confirms that the child has been permanently removed from the home, the child will be counted as a family member. Absent Head, Spouse, or Cohead PHA Policv An employed head, spouse, or cohead absent from the unit more than 180 consecutive days due to employment will continue to be considered a family member as long as at least one household member remains in the assisted unit. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-4 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Family Members Permanently ConTmed for Medical Reasons If a family member is confined to a nursing home or hospital on a permanent basis, that person is no longer considered a family member and the income of that person is not counted [HCV GB, p. 5-22]. PHA Policy The PHA will request verification from a responsible medical professional and will use this determination. If the responsible medical professional cannot provide a determination, the person generally will be considered temporarily absent. The family may present evidence that the family member is confined on a permanent basis and request that the person not be considered a family member. When an individual who has been counted as a family member is determined permanently absent, the family is eligible for the medical expense deduction only if the remaining head, spouse, or cohead qualify as an elderly person or a person with disabilities. Joint Custody of Dependents PHA Policv When a joint custody agreement causes a child to live in more than one location,the PHA must determine whether the child is a member of an assisted family. Dependents that are subject to a joint custody arrangement will be considered a member of the family, if they live with the applicant or participant family 50 percent or more of the time. When more than one applicant or participant family is claiming the same dependents as family members, the family with primary custody at the time of the initial examination or reexamination will be able to claim the dependents. If there is a dispute about which family should claim them,the PHA will make the determination based on available documents such as court orders, or an IRS return showing which family has claimed the child for income tax purposes. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-5 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Caretakers for a Child PHA Policy This policy is intended to address those relatively rare and temporary circumstances in which children remain in a unit without a parent or designated guardian. This might happen in the case of the death of the parent. In such circumstances, the care arrangements for the child may be formal or informal. The approval of a caretaker is at the owner and PHA's discretion and subject to the owner and PHA's screening criteria. If neither a parent nor a designated guardian remains in a household receiving HCV assistance, the PHA will take the following actions. (1) If a responsible agency has determined that another adult is to be brought into the assisted unit to care for a child for an indefinite period, the designated caretaker will not be considered a family member until a determination of custody or legal guardianship is made. (2) If a caretaker has assumed responsibility for a child without the involvement of a responsible agency or formal assignment of custody or legal guardianship, the caretaker will be treated as a visitor for 90 days. After the 90 days has elapsed, the caretaker will be considered a family member unless information is provided that would confirm that the caretaker's role is temporary. In such cases the PHA will extend the caretaker's status as an eligible visitor. (3) At any time that custody or guardianship legally has been awarded to a caretaker, the housing choice voucher will be transferred to the caretaker. (4) During any period that a caretaker is considered a visitor,the income of the caretaker is not counted in annual income and the caretaker does not qualify the family for any deductions from income. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-6 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-LC. ANTICIPATING ANNUAL INCOME The PHA is required to count all income "anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date" [24 CFR 5.609(a)(2)]. Policies related to anticipating annual income are provided below. Basis of Annual Income Projection The PHA generally will use current circumstances to determine anticipated income for the coming 12-month period. HUD authorizes the PHA to use other than current circumstances to anticipate income when: • An imminent change in circumstances is expected [HCV GB, p. 5-17] • It is not feasible to anticipate a level of income over a 12-month period (e.g., seasonal or cyclic income) [24 CFR 5.609(d)] • The PHA believes that past income is the best available indicator of expected future income [24 CFR 5.609(d)] PHAs are required to use HUD's Enterprise Income Verification (EIV) system in its entirety as a third party source to verify employment and income information, and to reduce administrative subsidy payment errors in accordance with HUD administrative guidance [24 CFR 5.233(a)(2)]. HUD allows PHAs to use tenant-provided documents (pay stubs)to project income once EIV data has been received in such cases where the family does not dispute the EIV employer data and where the PHA does not determine it is necessary to obtain additional third-party data. PHA Policv When EIV is obtained and the family does not dispute the EIV employer data, the PHA will use current tenant-provided documents to project annual income. When the tenant- provided documents are pay stubs, the PHA will make every effort to obtain current and consecutive pay stubs dated within the last 60 days of the interview date or date of application if mailed for renewal purposes. The PHA will obtain written and/or oral third-party verification in accordance with the verification requirements and policy in Chapter 7 in the following cases: If EIV or other UIV data is not available, If the family disputes the accuracy of the EIV employer data, and/or If the PHA determines additional information is needed. In such cases,the PHA will review and analyze current data to anticipate annual income. In all cases,the family file will be documented with a clear record of the reason for the decision, and a clear audit trail will be left as to how the PHA annualized projected income. When the PHA cannot readily anticipate income based upon current circumstances (e.g., in the case of seasonal employment, unstable working hours, or suspected fraud), the ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-7 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. PHA will review and analyze historical data for patterns of employment, paid benefits, and receipt of other income and use the results of this analysis to establish annual income. Anytime current circumstances are not used to project annual income, a clear rationale for the decision will be documented in the file. In all such cases the family may present information and documentation to the PHA to show why the historic pattern does not represent the family's anticipated income. Known Changes in Income If the PHA verifies an upcoming increase or decrease in income, annual income will be calculated by applying each income amount to the appropriate part of the 12-month period. Example: An employer reports that a full-time employee who has been receiving $8/hour will begin to receive $8.25/hour in the eighth week after the effective date of the reexamination. In such a case the PHA would calculate annual income as follows: ($8/hour x 40 hours x 7 weeks) + ($8.25 x 40 hours x 45 weeks). The family may present information that demonstrates that implementing a change before its effective date would create a hardship for the family. In such cases the PHA will calculate annual income using current circumstances and then require an interim reexamination when the change actually occurs. This requirement will be imposed even if the PHA's policy on reexaminations does not require interim reexaminations for other types of changes. When tenant-provided third-party documents are used to anticipate annual income,they will be dated within the last 60 days of the reexamination interview date or PHA request date. Projecting Income In HUD's EIV webcast of January 2008, HUD made clear that PHAs are not to use EIV quarterly wages to project annual income. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-8 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-LD. EARNED INCOME Types of Earned Income Included in Annual Income Wages and Related Compensation The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services is included in annual income [24 CFR 5.609(b)(1)]. PHA Policv For persons who regularly receive bonuses or commissions, the PHA will verify and then average amounts received for the two years preceding admission or reexamination. If only a one-year history is available, the PHA will use the prior year amounts. In either case the family may provide, and the PHA will consider, a credible justification for not using this history to anticipate future bonuses or commissions. If a new employee has not yet received any bonuses or commissions,the PHA will count only the amount estimated by the employer. The file will be documented appropriately. Some Types of Military Pay All regular pay, special pay and allowances of a member of the Armed Forces are counted [24 CFR 5.609(b)(8)] except for the special pay to a family member serving in the Armed Forces who is exposed to hostile fire [24 CFR 5.609(c)(7)]. Types of Earned Income Not Counted in Annual Income Temporary, Nonrecurring, or Sporadic Income [24 CFR 5.609(c)(9)] This type of income (including gifts) is not included in annual income. Sporadic income includes temporary payments from the U.S. Census Bureau for employment lasting no longer than 180 days [Notice PIH 2009-19]. PHA Policy Sporadic income is income that is not received periodically and cannot be reliably predicted. For example, the income of an individual who works occasionally as a handyman would be considered sporadic if future work could not be anticipated and no historic, stable pattern of income existed. Children's Earnings Employment income earned by children (including foster children)under the age of 18 years is not included in annual income [24 CFR 5.609(c)(1)]. (See Eligibility chapter for a definition of foster children.) Certain Earned Income of Full-Time Students Earnings in excess of$480 for each full-time student 18 years old or older (except for the head, spouse, or cohead) are not counted [24 CFR 5.609(c)(11)]. To be considered "full-time," a ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-9 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. student must be considered "full-time"by an educational institution with a degree or certificate program [HCV GB, p. 5-29]. Income of a Live-in Aide Income earned by a live-in aide, as defined in [24 CFR 5.403], is not included in annual income [24 CFR 5.609(c)(5)]. (See Eligibility chapter for a full discussion of live-in aides.) Income Earned under Certain Federal Programs Income from some federal programs is specifically excluded from consideration as income [24 CFR 5.609(c)(17)], including: • Payments to volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058) • Awards under the federal work-study program (20 U.S.C. 1087 uu) • Payments received from programs funded under Title V of the Older Americans Act of 1985 (42 U.S.C. 3056(f)) • Allowances, earnings, and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d)) • Allowances, earnings, and payments to participants in programs funded under the Workforce Investment Act of 1998 (29 U.S.C. 293 1) Resident Service Stipend Amounts received under a resident service stipend are not included in annual income. A resident service stipend is a modest amount(not to exceed $200 per individual per month)received by a resident for performing a service for the PHA 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 [24 CFR 5.600(c)(8)(iv)]. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-10 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. State and Local Employment Training Programs Incremental earnings and benefits to any family member resulting from participation in qualifying state or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff are excluded from annual income. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives and are excluded only for the period during which the family member participates in the training program [24 CFR 5.609(c)(8)(v)]. PHA Policv The PHA defines training program as "a learning process with goals and objectives, generally having a variety of components, and taking place in a series of sessions over a period to time. It is designed to lead to a higher level of proficiency, and it enhances the individual's ability to obtain employment. It may have performance standards to measure proficiency. Training may include, but is not limited to: (1) classroom training in a specific occupational skill, (2) on-the-job training with wages subsidized by the program, or(3)basic education" [expired Notice PIH 98-2, p. 3]. The PHA defines incremental earnings and benefits as the difference between: (1)the total amount of welfare assistance and earnings of a family member prior to enrollment in a training program, and (2)the total amount of welfare assistance and earnings of the family member after enrollment in the program [expired Notice PIH 98-2, pp. 3-4]. In calculating the incremental difference, the PHA will use as the pre-enrollment income the total annualized amount of the family member's welfare assistance and earnings reported on the family's most recently completed HUD-50058. End of participation in a training program must be reported in accordance with the PHA's interim reporting requirements. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-11 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. HUD-Funded Training Programs Amounts received under training programs funded in whole or in part by HUD [24 CFR 5.609(c)(8)(i)] are excluded from annual income. Eligible sources of funding for the training include operating subsidy, Section 8 administrative fees, and modernization, Community Development Block Grant(CDBG), HOME program, and other grant funds received from HUD. PHA Policv To qualify as a training program, the program must meet the definition of training program provided above for state and local employment training programs. Earnedlncome Tax Credit Earned income tax credit(EITC) refund payments received on or after January 1, 1991 (26 U.S.C. 320)), are excluded from annual income [24 CFR 5.609(c)(17)]. Although many families receive the EITC annually when they file taxes, an EITC can also be received throughout the year. The prorated share of the annual EITC is included in the employee's payroll check. Earned Income Disallowance The earned income disallowance for persons with disabilities is discussed in section 6-I.E below. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-12 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-I.E. EARNED INCOME DISALLOWANCE FOR PERSONS WITH DISABILITIES [24 CFR 5.6171 The earned income disallowance (EID) encourages people with disabilities to enter the work force by not including the full value of increases in earned income for a period of time. The full text of 24 CFR 5.617 is included as Exhibit 6-4 at the end of this chapter. Eligibility criteria and limitations on the disallowance are summarized below. Eligibility This disallowance applies only to individuals in families already participating in the HCV program (not at initial examination). To qualify, the family must experience an increase in annual income that is the result of one of the following events: • Employment of a family member who is a person with disabilities and who was previously unemployed for one or more years prior to employment. Previously unemployed includes a person who annually has earned not more than the minimum wage applicable to the community multiplied by 500 hours. The applicable minimum wage is the federal minimum wage unless there is a higher state or local minimum wage. • Increased earnings by a family member who is a person with disabilities and whose earnings increase during participation in an economic self-sufficiency or job-training program. A self- sufficiency program includes a program designed to encourage, assist, train, or facilitate the economic independence of HUD-assisted families or to provide work to such families [24 CFR 5.603(b)]. • New employment or increased earnings by a family member who is a person with disabilities and who has received benefits or services under Temporary Assistance for Needy Families (TANF) or any other state program funded under Part A of Title IV of the Social Security Act within the past six months. If the benefits are received in the form of monthly maintenance, there is no minimum amount. If the benefits or services are received in a form other than monthly maintenance, such as one-time payments, wage subsidies, or transportation assistance, the total amount received over the six-month period must be at least $500. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-13 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Calculation of the Disallowance Calculation of the earned income disallowance for an eligible member of a qualified family begins with a comparison of the member's current income with his or her "prior income." PHA Policv The PHA defines prior income, or prequalifying income, as the family member's last certified income prior to qualifying for the EID. The family member's prior, or prequalifying, income remains constant(as a baseline)throughout the period that he or she is participating in the EID. Initial 12-Month Exclusion During the initial 12-month exclusion period, the full amount(100 percent) of any increase in income attributable to new employment or increased earnings is excluded. The 12 months are cumulative and need not be consecutive. PHA Policy The initial EID exclusion period will begin on the first of the month following the date an eligible member of a qualified family is first employed or first experiences an increase in earnings. Second 12-Month Exclusion and Phase-In During the second 12-month exclusion period, the exclusion is reduced to half(50 percent) of any increase in income attributable to employment or increased earnings. The 12 months are cumulative and need not be consecutive. Lifetime Limitation The EID has a four-year(48-month) lifetime maximum. The four-year eligibility period begins at the same time that the initial exclusion period begins and ends 48 months later. The one-time eligibility for the EID applies even if the eligible individual begins to receive assistance from another housing agency, if the individual moves between public housing and Section 8 assistance, or if there are breaks in assistance. PHA Policv During the 48-month eligibility period,the PHA will schedule and conduct an interim reexamination each time there is a change in the family member's annual income that affects or is affected by the EID (e.g., when the family member's income falls to a level at or below his/her prequalifying income, when one of the exclusion periods ends, and at the end of the lifetime maximum eligibility period). ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-14 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-I.F. BUSINESS INCOME [24 CFR 5.609(b)(2)] Annual income includes "the net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family" [24 CFR 5.609(b)(2)]. Business Expenses Net income is "gross income less business expense" [HCV GB, p. 5-19]. PHA Policy To determine business expenses that may be deducted from gross income, the PHA will use current applicable Internal Revenue Service (IRS) rules for determining allowable business expenses [see IRS Publication 535], unless atopic is addressed by HUD regulations or guidance as described below. Business Expansion HUD regulations do not permit the PHA to deduct from gross income expenses for business expansion. PHA Policv Business expansion is defined as any capital expenditures made to add new business activities, to expand current facilities, or to operate the business in additional locations. For example, purchase of a street sweeper by a construction business for the purpose of adding street cleaning to the services offered by the business would be considered a business expansion. Similarly,the purchase of a property by a hair care business to open at a second location would be considered a business expansion. Capital Indebtedness HUD regulations do not permit the PHA to deduct from gross income the amortization of capital indebtedness. PHA Policv Capital indebtedness is defined as the principal portion of the payment on a capital asset such as land, buildings, and machinery. This means the PHA will allow as a business expense interest, but not principal, paid on capital indebtedness. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-15 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Negative Business Income If the net income from a business is negative, no business income will be included in annual income; a negative amount will not be used to offset other family income. Withdrawal of Cash or Assets from a Business HUD regulations require the PHA to include in annual income the withdrawal of cash or assets from the operation of a business or profession unless the withdrawal reimburses a family member for cash or assets invested in the business by the family. PHA Policv Acceptable investments in a business include cash loans and contributions of assets or equipment. For example, if a member of an assisted family provided an up-front loan of $2,000 to help a business get started, the PHA will not count as income any withdrawals from the business up to the amount of this loan until the loan has been repaid. Investments do not include the value of labor contributed to the business without compensation. Co-owned Businesses PHA Policy If a business is co-owned with someone outside the family, the family must document the share of the business it owns. If the family's share of the income is lower than its share of ownership,the family must document the reasons for the difference. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-16 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-LG. ASSETS [24 CFR 5.609(b)(3) and 24 CFR 5.603(b)] Overview There is no asset limitation for participation in the HCV program. However, HUD requires that the PHA include in annual income the anticipated "interest, dividends, and other net income of any kind from real or personal property" [24 CFR 5.609(b)(3)]. This section discusses how the income from various types of assets is determined. For most types of assets, the PHA must determine the value of the asset in order to compute income from the asset. Therefore, for each asset type, this section discusses: • How the value of the asset will be determined • How income from the asset will be calculated Exhibit 6-1 provides the regulatory requirements for calculating income from assets [24 CFR 5.609(b)(3)], and Exhibit 6-3 provides the regulatory definition of net family assets. This section begins with a discussion of general policies related to assets and then provides HUD rules and PHA policies related to each type of asset. General Policies Income from Assets The PHA generally will use current circumstances to determine both the value of an asset and the anticipated income from the asset. As is true for all sources of income, HUD authorizes the PHA to use other than current circumstances to anticipate income when (1) an imminent change in circumstances is expected (2) it is not feasible to anticipate a level of income over 12 months or (3)the PHA believes that past income is the best indicator of anticipated income. For example, if a family member owns real property that typically receives rental income but the property is currently vacant, the PHA can take into consideration past rental income along with the prospects of obtaining a new tenant. PHA Policv Anytime current circumstances are not used to determine asset income, a clear rationale for the decision will be documented in the file. In such cases the family may present information and documentation to the PHA to show why the asset income determination does not represent the family's anticipated asset income. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-17 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Valuing Assets The calculation of asset income sometimes requires the PHA to make a distinction between an asset's market value and its cash value. • The market value of an asset is its worth 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. PHA Policy Reasonable costs that would be incurred when disposing of an asset include, but are not limited to, penalties for premature withdrawal, broker and legal fees, and settlement costs incurred in real estate transactions [HCV GB, p. 5-28]. Lump-Sum Receipts Payments that are received in a single lump sum, such as inheritances, capital gains, lottery winnings, insurance settlements, and proceeds from the sale of property, are generally considered assets, not income. However, such lump-sum receipts are counted as assets only if they are retained by afamily in aform recognizable as an asset(e.g., deposited in a savings or checking account) [RHIIP FAQs]. (For a discussion of lump-sum payments that represent the delayed start of a periodic payment, most of which are counted as income, see sections 64.11 and 6-I.I.) Imputing Income from Assets[24 CFR 5.609(6)(3), Notice PIH 2012-29] When net family assets are $5,000 or less, the PHA will include in annual income the actual income anticipated to be derived from the assets. When the family has net family assets in excess of$5,000,the PHA will include in annual income the greater of(1)the actual income derived from the assets or(2)the imputed income. Imputed income from assets is calculated by multiplying the total cash value of all family assets by an average passbook savings rate as determined by the PHA. • Note: The HUD field office no longer provides an interest rate for imputed asset income. The "safe harbor" is now for the PHA to establish a passbook rate within 0.75 percent of a national average. • The PHA must review its passbook rate annually to ensure that it remains within 0.75 percent of the national average. PHA Policv The PHA will initially set the imputed asset passbook rate at zero percent. The PHA will review the passbook rate annually, in December of each year. If the national rate is at or below 0.75 percent, the PHA will continue to use zero percent. If the national rate exceeds 0.75 percent at the time of the annual review,the PHA will adjust the rate to the current national rate. Changes to the passbook rate will take effect on February 1 following the December review. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-18 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Determining Actual Anticipated Income from Assets It may or may not be necessary for the PHA to use the value of an asset to compute the actual anticipated income from the asset. When the value is required to compute the anticipated income from an asset, the market value of the asset is used. For example, if the asset is a property for which a family receives rental income, the anticipated income is determined by annualizing the actual monthly rental amount received for the property; it is not based on the property's market value. However, if the asset is a savings account, the anticipated income is determined by multiplying the market value of the account by the interest rate on the account. Withdrawal of Cash or Liquidation of Investments Any withdrawal of cash or assets from an investment will be included in income except to the extent that the withdrawal reimburses amounts invested by the family. For example, when a family member retires, the amount received by the family from a retirement investment plan is not counted as income until the family has received payments equal to the amount the family member deposited into the retirement investment plan. Jointly Owned Assets The regulation at 24 CFR 5.609(a)(4) specifies that annual income includes "amounts derived (during the 12-month period)from assets to which any member of the family has access." PHA Policv If an asset is owned by more than one person and any family member has unrestricted access to the asset, the PHA will count the full value of the asset. A family member has unrestricted access to an asset when he or she can legally dispose of the asset without the consent of any of the other owners. If an asset is owned by more than one person, including a family member, but the family member does not have unrestricted access to the asset,the PHA will prorate the asset according to the percentage of ownership. If no percentage is specified or provided for by state or local law, the PHA will prorate the asset evenly among all owners. Assets Disposed Offor Less than Fair Market Value[24 CFR 5.603(6)] HUD regulations require the PHA to count as a current asset any business or family asset that was disposed of for less than fair market value during the two years prior to the effective date of the examination/reexamination, except as noted below. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-19 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Minimum Threshold The HTVC Guidebook permits the PHA to set a threshold below which assets disposed of for less than fair market value will not be counted [HCV GB, p. 5-27]. PHA Policv The PHA will not include the value of assets disposed of for less than fair market value unless the cumulative fair market value of all assets disposed of during the past two years exceeds the gross amount received for the assets by more than $1,000. When the two-year period expires,the income assigned to the disposed asset(s) also expires. If the two-year period ends between annual recertification, the family may request an interim recertification to eliminate consideration of the asset(s). Assets placed by the family in nonrevocable trusts are considered assets disposed of for less than fair market value except when the assets placed in trust were received through settlements or judgments. Separation or Divorce The regulation also specifies that assets are not considered disposed of for less than fair market value if they are disposed of as part of a separation or divorce settlement and the applicant or tenant receives important consideration not measurable in dollar terms. PHA Policv All assets disposed of as part of a separation or divorce settlement will be considered assets for which important consideration not measurable in monetary terms has been received. In order to qualify for this exemption, a family member must be subject to a formal separation or divorce settlement agreement established through arbitration, mediation, or court order. Foreclosure or Bankruptcy Assets are not considered disposed of for less than fair market value when the disposition is the result of a foreclosure or bankruptcy sale. Family Declaration PHA Policy Families must sign a declaration form at initial certification and each annual recertification identifying all assets that have been disposed of for less than fair market value or declaring that no assets have been disposed of for less than fair market value. The PHA may verify the value of the assets disposed of if other information available to the PHA does not appear to agree with the information reported by the family. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-20 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Types of Assets Checking and Savings Accounts For regular checking accounts and savings accounts, cash value has the same meaning as market value. If a checking account does not bear interest, the anticipated income from the account is zero. PHA Policy In determining the value of a checking account, the PHA will use the current balance. In determining the value of a savings account, the PHA will use the current balance. In determining the anticipated income from an interest-bearing checking or savings account, the PHA will multiply the value of the account by the current rate of interest paid on the account. Investment Accounts Such as Stocks, Bonds, Saving Certificates, and Money Market Funds Interest or dividends earned by investment accounts are counted as actual income from assets even when the earnings are reinvested. The cash value of such an asset is determined by deducting from the market value any broker fees, penalties for early withdrawal, or other costs of converting the asset to cash. PHA Policy In determining the market value of an investment account, the PHA will use the value of the account on the most recent investment report. How anticipated income from an investment account will be calculated depends on whether the rate of return is known. For assets that are held in an investment account with a known rate of return (e.g., savings certificates), asset income will be calculated based on that known rate (market value multiplied by rate of earnings). When the anticipated rate of return is not known (e.g., stocks), the PHA will calculate asset income based on the earnings for the most recent reporting period. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-21 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Equity in Real Property or Other Capital Investments Equity(cash value) in a property or other capital asset is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker fees)that would be incurred in selling the asset [HCV GB, p. 5-25]. PHA Policy In determining the equity, the PHA will determine market value by examining the recent sales of at least three properties in the surrounding or similar neighborhood that possess comparable factors that affect market value or the assessed value if available from property records through the appropriate county websites. The PHA will first use the payoff amount for the loan (mortgage) as the unpaid balance to calculate equity. If the payoff amount is not available, the PHA will use the basic loan balance information to deduct from the market value in the equity calculation. Equity in real property and other capital investments is considered in the calculation of asset income except for the following types of assets: • Equity accounts in HUD homeownership programs [24 CFR5.603(b)] • The value of a home currently being purchased with assistance under the HCV program Homeownership Option for the first 10 years after the purchase date of the home [24 CFR 5.603(b), Notice PIH 2012-3] • Equity in owner-occupied cooperatives and manufactured homes in which the family lives [HCV GB, p. 5-25] • Equity in real property when a family member's main occupation is real estate [HCV GB, p. 5-25]. This real estate is considered a business asset, and income related to this asset will be calculated as described in section 6-IF. • Interests in Indian Trust lands [24 CFR 5.603(b)] • Real property and capital assets that are part of an active business or farming operation [HCV GB, p. 5-25] The PHA must also deduct from the equity the reasonable costs for converting the asset to cash. Using the formula for calculating equity specified above, the net cash value of real property is the market value of the loan (mortgage) minus the expenses to convert to cash [Notice PIH 2012-3]. PHA Policv For the purposes of calculating expenses to convert to cash for real property, the PHA will use ten percent of the market value of the home. A family may have real property as an asset in two ways: (1) owning the property itself and (2) holding a mortgage or deed of trust on the property. In the case of a property owned by a family member, the anticipated asset income generally will be in the form of rent or other payment for ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-22 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. the use of the property. If the property generates no income, actual anticipated income from the asset will be zero. In the case of a mortgage or deed of trust held by a family member, the outstanding balance (unpaid principal) is the cash value of the asset. The interest portion only of payments made to the family in accordance with the terms of the mortgage or deed of trust is counted as anticipated asset income. PHA Policy In the case of capital investments owned jointly with others not living in a family's unit, a prorated share of the property's cash value will be counted as an asset unless the PHA determines that the family receives no income from the property and is unable to sell or otherwise convertthe asset to cash. Trusts A trust is a legal arrangement generally regulated by state law in which one party (the creator or grantor)transfers property to a second party (the trustee)who holds the property for the benefit of one or more third parties (the beneficiaries). Revocable Trusts If any member of a family has the right to withdraw the funds in a trust,the value of the trust is considered an asset [HCV GB, p. 5-25]. Any income earned as a result of investment of trust funds is counted as actual asset income, whether the income is paid to the family or deposited in the trust. Nonrevocable Trusts In cases where a trust is not revocable by, or under the control of, any member of a family, the value of the trust fund is not considered an asset. However, any income distributed to the family from such a trust is counted as a periodic payment or a lump-sum receipt, as appropriate [24 CFR 5.603(b)]. (Periodic payments are covered in section 6-LH. Lump-sum receipts are discussed earlier in this section.) Retirement Accounts Company Retirement/Pension Accounts In order to correctly include or exclude as an asset any amount held in a company retirement or pension account by an employed person, the PHA must know whether the money is accessible before retirement [HCV GB, p. 5-26]. While a family member is employed, only the amount the family member can withdraw without retiring or terminating employment is counted as an asset [HCV GB, p. 5-26]. After a family member retires or terminates employment, any amount distributed to the family member is counted as a periodic payment or a lump-sum receipt, as appropriate [HCV GB, p. 5- 26], except to the extent that it represents funds invested in the account by the family member. (For more on periodic payments, see section 6-IH.) The balance in the account is counted as an asset only if it remains accessible to the family member. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-23 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. IRA, Keogh, and Similar Retirement Savings Accounts IRA, Keogh, and similar retirement savings accounts are counted as assets even though early withdrawal would result in a penalty [HCV GB, p. 5-25]. Personal Property Personal property held as an investment, such as gems,jewelry, coin collections, antique cars, etc., is considered an asset [HCV GB, p. 5-25]. PHA Policv In determining the value of personal property held as an investment, the PHA will use the family's estimate of the value. The PHA may obtain an appraisal to confirm the value of the asset if there is reason to believe that the family's estimated value is off by $50 or more. The family must cooperate with the appraiser, but cannot be charged any costs related to the appraisal. Generally, personal property held as an investment generates no income until it is disposed of. If regular income is generated (e.g., income from renting the personal property),the amount that is expected to be earned in the coming year is counted as actual income from the asset. Necessary items of personal property are not considered assets [24 CFR 5.603(b)]. PHA Policv Necessary personal property consists of only those items not held as an investment, and may include clothing, furniture, household furnishings,jewelry, and vehicles, including those specially equipped for persons with disabilities. Life Insurance The cash value of a life insurance policy available to a family member before death, such as a whole life or universal life policy, is included in the calculation of the value of the family's assets [HCV GB 5-25]. The cash value is the surrender value. If such a policy earns dividends or interest that the family could elect to receive, the anticipated amount of dividends or interest is counted as income from the asset whether or not the family actually receives it. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-24 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-I.11. PERIODIC PAYMENTS Periodic payments are forms of income received on a regular basis. HUD regulations specify periodic payments that are and are not included in annual income. Periodic Payments Included in Annual Income • Periodic payments from sources such as social security, unemployment and welfare assistance, annuities, insurance policies, retirement funds, and pensions. However, periodic payments from retirement accounts, annuities, and similar forms of investments are counted only after they exceed the amount contributed by the family [24 CFR 5.609(b)(4) and (b)(3)]. • Disability or death benefits and lottery receipts paid periodically, rather than in a single lump sum [24 CFR 5.609(b)(4) and HCV, p. 5-14]. Lump-Sum Payments for the Delayed Start of a Periodic Payment Most lump-sums received as a result of delays in processing periodic payments, such as unemployment or welfare assistance, are counted as income. However, lump-sum receipts for the delayed start of periodic social security or supplemental security income (SSI)payments are not counted as income [CFR 5.609(b)(4)]. Additionally, any deferred disability benefits that are received in a lump-sum or in prospective monthly amounts from the Department of Veterans Affairs are to be excluded from annual income [FR Notice 11/24/08]. PHA Policy When a delayed-start payment is received and reported during the period in which the PHA is processing an annual reexamination, the PHA will adjust the family share and PHA subsidy retroactively for the period the payment was intended to cover. The family may pay in full any amount due or request to enter into a repayment agreement with the PHA. Treatment of Overpayment Deductions from Social Security Benefits The PHA must make a special calculation of annual income when the Social Security Administration (SSA) overpays an individual, resulting in a withholding or deduction from his or her benefit amount until the overpayment is paid in full. The amount and duration of the withholding will vary depending on the amount of the overpayment and the percent of the benefit rate withheld. Regardless of the amount withheld or the length of the withholding period, the PHA must use the reduced benefit amount after deducting only the amount of the overpayment withholding from the gross benefit amount [Notice PIH 2012-10]. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-25 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Periodic Payments Excluded from Annual Income • Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the assisted family, who are unable to live alone) [24 CFR 5.609(c)(2)]. Kinship guardianship assistance payments (Kin-GAP) and other similar guardianship payments are treated the same as foster care payments and are likewise excluded from annual income [Notice PIH 2012-1]. PHA Policy The PHA will exclude payments for the care of foster children and foster adults only if the care is provided through an official arrangement with a local welfare agency [HCV GB, p. 5-18]. • Amounts paid by a state agency to a family with a member who has a developmental disabilitv and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home [24 CFR 5.609(c)(16)]. • Amounts received under the Low-Income Home Energy Assistance Program (42 U.S.C. 1626(c)) [24 CFR 5.609(c)(17)]. • Amounts received under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858q) [24 CFR 5.609(c)(17)]. • Earned Income Tax Credit(EITC)refund payments (26 U.S.C. 320)) [24 CFR 5.609(c)(17)]. Note: EITC may be paid periodically if the family elects to receive the amount due as part of payroll payments from an employer. • Lump-sums received as a result of delays in processing Social Security and SSI payments (see section 6-LJ.) [24 CFR 5.609(b)(4)]. • Lump-sums or prospective monthly amounts received as deferred disability benefits from the Department of Veterans Affairs (VA) [FR Notice 11/24/08]. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-26 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-I.I. PAYMENTS IN LIEU OF EARNINGS Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation, and severance pay, are counted as income [24 CFR 5.609(b)(5)] if they are received either in the form of periodic payments or in the form of a lump-sum amount or prospective monthly amounts for the delayed start of a periodic payment. If they are received in a one-time lump sum (as a settlement, for instance), they are treated as lump-sum receipts [24 CFR 5.609(c)(3)]. (See also the discussion of periodic payments in section 6-IH and the discussion of lump-sum receipts in section 6-IG.) ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-27 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-I.J. WELFARE ASSISTANCE Overview Welfare assistance is counted in annual income. Welfare assistance includes Temporary Assistance for Needy Families (TANF) and any payments to individuals or families based on need that are made under programs funded separately or jointly by federal, state, or local governments [24 CFR 5.603(b)]. Sanctions Resulting in the Reduction of Welfare Benefits [24 CFR 5.6151 The PHA must make a special calculation of annual income when the welfare agency imposes certain sanctions on certain families. The full text of the regulation at 24 CFR 5.615 is provided as Exhibit 6-5. The requirements are summarized below. This rule applies only if a family was receiving HCV assistance at the time the sanction was imposed. Covered Families The families covered by 24 CFR 5.615 are those "who receive welfare assistance or other public assistance benefits (`welfare benefits')from a State or other public agency ('welfare agency') under a program for which Federal, State or local law requires that a member of the family must participate in an economic self-sufficiency program as a condition for such assistance" [24 CFR 5.615(b)] Imputed Income When a welfare agency imposes a sanction that reduces a family's welfare income because the family commits fraud or fails to comply with the agency's economic self-sufficiency program or work activities requirement,the PHA must include in annual income "imputed"welfare income. The PHA must request that the welfare agency provide the reason for the reduction of benefits and the amount of the reduction of benefits. The imputed welfare income is the amount that the benefits were reduced as a result of the sanction. This requirement does not apply to reductions in welfare benefits: (1) at the expiration of the lifetime or other time limit on the payment of welfare benefits, (2) if a family member is unable to find employment even though the family member has complied with the welfare agency economic self-sufficiency or work activities requirements, or (3)because a family member has not complied with other welfare agency requirements [24 CFR 5.615(b)(2)]. Offsets The amount of the imputed welfare income is offset by the amount of additional income the family begins to receive after the sanction is imposed. When the additional income equals or exceeds the imputed welfare income, the imputed income is reduced to zero [24 CFR 5.615(c)(4)]. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-28 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-LK. PERIODIC AND DETERMINABLE ALLOWANCES [24 CFR 5.609(b)(7)] Annual income includes periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing with an assisted family. Alimony and Child Support The PHA must count alimony or child support amounts awarded as part of a divorce or separation agreement. PHA Policy The PHA will count court-awarded amounts for alimony and child support unless the PHA verifies that: (1)the payments are not being made, and (2)the family has made reasonable efforts to collect amounts due, including filing with courts or agencies responsible for enforcing payments [HCV GB, pp. 5-23 and 5-47]. Families who do not have court-awarded alimony and child support awards are not required to seek a court award and are not required to take independent legal action to obtain collection. Regular Contributions or Gifts The PHA must count as income regular monetary and nonmonetary contributions or gifts from persons not residing with an assisted family [24 CFR 5.609(b)(7)]. Temporary, nonrecurring, or sporadic income and gifts are not counted [24 CFR 5.609(c)(9)]. PHA Policv Examples of regular contributions include: (1) regular payment of a family's bills (e.g., utilities, telephone, rent, credit cards, and car payments), (2) cash or other liquid assets provided to any family member on a regular basis, and (3) "in-kind" contributions such as groceries and clothing provided to a family on a regular basis. Nonmonetary contributions will be valued at the cost of purchasing the items, as determined by the PHA. For contributions that may vary from month to month (e.g., utility payments),the PHA will include an average amount based upon past history. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-29 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-LL. STUDENT FINANCIAL ASSISTANCE [24 CFR 5.609(b)(9) and FR 12/14/121 In 2005, Congress passed a law (for section 8 programs only)requiring that certain student financial assistance be included in annual income. Prior to that, the full amount of student financial assistance was excluded. For some students, the full exclusion still applies. Student Financial Assistance Included in Annual Income [24 CFR 5.609(b)(9) and FR 4/10/061 The regulation requiring the inclusion of certain student financial assistance applies only to students who satisfy all of the following conditions: • They are enrolled in an institution of higher education, as defined under the Higher Education Act(HEA) of 1965. • They are seeking or receiving Section 8 assistance on their own that is, apart from their parents through the HCV program, the project-based certificate program, the project-based voucher program, or the moderate rehabilitation program. • They are under 24 years of age OR they have no dependent children. For students who satisfy these three conditions, any financial assistance in excess of tuition and any other required fees and charges received: (1) under the 1965 HEA, (2)from a private source, or(3)from an institution of higher education, as defined under the 1965 HEA, must be included in annual income. To determine annual income in accordance with the above requirements,the PHA will use the definitions of dependent child, institution of higher education, and parents in section 3-ILE, along with the following definitions [FR 4/10/06, pp. 18148-18150]: • Assistance under the Higher Education Act of 1965 includes Pell Grants, Federal Supplement Educational Opportunity Grants, Academic Achievement Incentive Scholarships, State Assistance under the Leveraging Educational Assistance Partnership Program,the Robert G. Byrd Honors Scholarship Program, and Federal Work Study programs. • Assistance from private sources means assistance from nongovernmental sources, including parents, guardians, and other persons not residing with the student in an HCV assisted unit. • Tuition will have the meaning given this term by the institution of higher education in which the student is enrolled and will include any other fees and charges required by the institution for enrollment [FR 12/14/12, p. 74497]. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-30 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Student Financial Assistance Excluded from Annual Income [24 CFR 5.609(c)(6)] Any student financial assistance not subject to inclusion under 24 CFR 5.609(b)(9) is fully excluded from annual income under 24 CFR 5.609(c)(6), whether it is paid directly to the student or to the educational institution the student is attending. This includes any financial assistance received by: • Students residing with parents who are seeking or receiving Section 8 assistance • Students who are enrolled in an educational institution that does not meet the 1965 HEA definition of institution of higher education • Students who are over 23 AND have at least one dependent child, as defined in section 3-ILE • Students who are receiving financial assistance through a governmental program not authorized under the 1965 HEA. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-31 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-I.M. ADDITIONAL EXCLUSIONS FROM ANNUAL INCOME Other exclusions contained in 24 CFR 5.609(c) and updated by FR Notice 12/14/12 that have not been discussed earlier in this chapter include the following: • Reimbursement of medical expenses [24 CFR 5.609(c)(4)] • Amounts received by participants in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred and which are made solely to allow participation in a specific program [24 CFR 5.609(c)(8)(iii)] • Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency(PASS) [(24 CFR 5.609(c)(8)(ii)] • Reparation Payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era [24 CFR 5.609(c)(10)] • Adoption assistance payments in excess of$480 per adopted child [24 CFR 5.609(c)(12)] • Refunds or rebates on property taxes paid on the dwelling unit [24 CFR 5.609(c)(15)] • Amounts paid by a state agency to a family with a member who has a developmental disabilitv and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home [24 CFR 5.609(c)(16)] • Amounts specifically excluded by any other federal statute [24 CFR 5.609(c)(17), FR Notice 12/14/12]. HUD publishes an updated list of these exclusions periodically. It includes: (a) The value of the allotment provided to an eligible household under the Food Stamp Act of 1977 (7 U.S.C. 2017 (b)) (b) Benefits under Section 1780 of the School Lunch Act and Child Nutrition Act of 1966, including WIC (c) Payments to Volunteers under the Domestic Volunteer Services Act of 1973 (42 U.S.C. 5044(g), 5058) (d) Payments received under the Alaska Native Claims Settlement Act(43 U.S.C. 1626(c)) (e) Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C. 459e) (f) Payments or allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program (42 U.S.C. 8624(f)) (g) Payments received under programs funded in whole or in part under the Workforce Investment Act of 1998 (29 U.S.C. 293 1) (h) Deferred disability benefits from the Department of Veterans Affairs, whether received as a lump sum or in monthly prospective amounts ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-32 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. (i) Income derived from the disposition of funds to the Grand River Band of Ottawa Indians (Pub. L. 94-540, 90 Stat. 2503-04) (j) Payments, funds, or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990 (25 U.S.C. 1774f(b)) (k) A lump sum or periodic payment received by an individual Indian pursuant to the Class Action Settlement Agreement in the United States District Court case entitled Elouise Cobell et al. v.Ken Salazar et al (1) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U. S. Claims Court,the interests of individual Indians in trust or restricted lands, including the first $2,000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands (25 U.S.C. 1407-1408) (m) Benefits under the Indian Veterans Housing Opportunity Act of 2010 (only applies to Native American housing programs) (n) Payments received from programs funded under Title V of the Older Americans Act of 1985 (42 U.S.C. 3056(f)) (o) Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in In Re Agent-product liability litigation, M.D.L. No. 381 (E.D.N.Y.) (p) Payments received under the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721) (q) The value of any child care provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care)under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858q) (r) Earned income tax credit(EITC)refund payments received on or after January 1, 1991 (26 U.S.C. 320)) (s) Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation (Pub. L. 95-433) (t) Allowances, earnings and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. 12637(d)) (u) Amounts of scholarships funded under Title IV of the Higher Education Act of 1965j, including awards under federal work-study programs or under the Bureau of Indian Affairs student assistance programs (20 U.S.C. 1087uu). For Section 8 programs,the exception found in § 237 of Public Law 109-249 applies and requires that the amount of financial assistance in excess of tuition and mandatory fees shall be considered income in accordance with the provisions codified at 24 CFR 5.609(b)(9), except for those persons with disabilities as defined by 42 U.S.C. 1437a(b)(3)(E) (Pub. L. 109-249) (See See Section 6-LL. for exceptions.) ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-33 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. (v) Any amount of crime victim compensation (under the Victims of Crime Act) received through crime victim assistance (or payment or reimbursement of the cost of such assistance) as determined under the Victims of Crime Act because of the commission of a crime against the applicant under the Victims of Crime Act(42 U.S.C. 10602) ©Copyright 2013 Nan McKay&Associates,Inc. Page 6_34 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. PART IL• ADJUSTED INCOME 6-ILA. INTRODUCTION Overview HUD regulations require PHAs to deduct from annual income any of five mandatory deductions for which a family qualifies. The resulting amount is the family's adjusted income. Mandatory deductions are found in 24 CFR 5.611. 5.611(a) Mandatory deductions. In determining adjusted income, the responsible entity [PHA] must deduct the following amounts from annual income: (1) $480 for each dependent; (2) $400 for any elderly family or disabled family; (3) The sum of the following,to the extent the sum exceeds three percent of annual income: (i) Unreimbursed medical expenses of any elderly family or disabled family; (ii)Unreimbursed reasonable attendant care and auxiliary apparatus expenses for each member of the family who is a person with disabilities, to the extent necessary to enable any member of the family(including the member who is a person with disabilities)to be employed. This deduction may not exceed the earned income received by family members who are 18 years of age or older and who are able to work because of such attendant care or auxiliary apparatus; and (4) Any reasonable child care expenses necessary to enable a member of the family to be employed or to further his or her education. This part covers policies related to these mandatory deductions. Verification requirements related to these deductions are found in Chapter 7. Anticipating Expenses PHA Policy Generally, the PHA will use current circumstances to anticipate expenses. When possible, for costs that are expected to fluctuate during the year(e.g., child care during school and nonschool periods and cyclical medical expenses), the PHA will estimate costs based on historic data and known future costs. If a family has an accumulated debt for medical or disability assistance expenses,the PHA will include as an eligible expense the portion of the debt that the family expects to pay during the period for which the income determination is being made. However, amounts previously deducted will not be allowed even if the amounts were not paid as expected in a preceding period. The PHA may require the family to provide documentation of payments made in the preceding year. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6_35 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-II.B. DEPENDENT DEDUCTION An allowance of$480 is deducted from annual income for each dependent [ 24 CFR 5.611(a)(1)]. Dependent is defined as any family member other than the head, spouse, or cohead who is under the age of 18 or who is 18 or older and is a person with disabilities or a full-time student. Foster children, foster adults, and live-in aides are never considered dependents [24 CFR 5.603(b)]. 6-II.C. ELDERLY OR DISABLED FAMILY DEDUCTION A single deduction of$400 is taken for any elderly or disabled family [24 CFR 5.611(a)(2)]. An elderly family is a family whose head, spouse, cohead, or sole member is 62 years of age or older, and a disabled family is a family whose head, spouse, cohead, or sole member is a person with disabilities [24 CFR 5.403]. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-36 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-ILD. MEDICAL EXPENSES DEDUCTION [24 CFR 5.6I1(a)(3)(i)] Unreimbursed medical expenses may be deducted to the extent that, in combination with any disability assistance expenses, they exceed three percent of annual income. The medical expense deduction is permitted only for families in which the head, spouse, or cohead is at least 62 or is a person with disabilities. If a family is eligible for a medical expense deduction, the medical expenses of all family members are counted [VG, p. 28]. Dermition of Medical Expenses HUD regulations define medical expenses at 24 CFR 5.603(b)to mean "medical expenses, including medical insurance premiums, that are anticipated during the period for which annual income is computed, and that are not covered by insurance." PHA Policv The most current IRS Publication 502,Medical and Dental Expenses, will be used as a reference to determine the costs that qualify as medical expenses. Summary of Allowable Medical Expenses from IRS Publication 502 Services of medical professionals Substance abuse treatment programs Surgery and medical procedures that are Psychiatric treatment necessary, legal, noncosmetic Ambulance services and some costs of Services of medical facilities transportation related to medical Hospitalization, long-term care, and in- expenses home nursing services The cost and care of necessary Prescription medicines and insulin, but equipment related to a medical not nonprescription medicines even if condition (e.g., eyeglasses/lenses, recommended by a doctor hearing aids, crutches, and artificial teeth) Improvements to housing directly related to medical needs (e.g., ramps for a wheel Cost and continuing care of necessary chair, handrails) service animals Medical insurance premiums or the cost of a health maintenance organization (HMO) Note: This chart provides a summary of eligible medical expenses only. Detailed information is provided in IRS Publication 502. Medical expenses are considered only to the extent they are not reimbursed by insurance or some other source. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-37 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Families That Qualify for Both Medical and Disability Assistance Expenses PHA Policv 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 afamily could be defined as either medical or disability assistance expenses,the PHA will consider them medical expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6_38 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-ILE. DISABILITY ASSISTANCE EXPENSES DEDUCTION [24 CFR 5.603(b) and 24 CFR 5.6I1(a)(3)(ii)] Reasonable expenses for attendant care and auxiliary apparatus for a disabled family member 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 three 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. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6_39 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Eligible Disability Expenses Examples of auxiliary apparatus are provided in the HCV Guidebook as follows: "Auxiliary apparatus are items such as wheelchairs, ramps, adaptations to vehicles, or special equipment to enable a blind person to read or type, but only if these items are directly related to permitting the disabled person or other family member to work" [HCV GB, p. 5-30]. HUD advises PHAs to further define and describe auxiliary apparatus [VG, p. 30]. Eligible Auxiliary Apparatus PHA Policv Expenses incurred for maintaining or repairing an auxiliary apparatus are eligible. In the case of an apparatus that is specially adapted to accommodate a person with disabilities (e.g., a vehicle or computer), the cost to maintain the special adaptations (but not maintenance of the apparatus itself) is an eligible expense. The cost of service animals trained to give assistance to persons with disabilities, including the cost of acquiring the animal, veterinary care, food, grooming, and other continuing costs of care, will be included. Eligible Attendant Care The family determines the type of attendant care that is appropriate for the person with disabilities. PHA Policv Attendant care includes, but is not limited to, reasonable costs for home medical care, nursing services, in-home or center-based care services, interpreters for persons with hearing impairments, and readers for persons with visual disabilities. 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. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-40 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 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 Policv 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 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 afamily could be defined as either medical or disability assistance expenses,the PHA will consider them medical expenses unless it is clear that the expenses are incurred exclusively to enable a person with disabilities to work. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6_41 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-ILF. 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 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 Policv 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. 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. Furthering Education PHA Policv If the child care expense being claimed is to enable a family member to further his or her 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 ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-42 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. full-time student, but the time spent in educational activities must be commensurate with the child care claimed. Being Gainfully Employed PHA Policy If the child care 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 Child Care Expense Deduction When a family member looks for work or furthers his or her education, there is no cap on the amount that may be deducted for child care—although the care must still be necessary and reasonable. However, when child care 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. When the person who is enabled to work is a person with disabilities who receives the earned income disallowance (EID) or a full-time student whose earned income above $480 is excluded, child care costs related to enabling a family member to work may not exceed the portion of the person's earned income that actually is included in annual income. For example, if a family member who qualifies for the EID makes $15,000 but because of the EID only $5,000 is included in annual income, child care expenses are limited to $5,000. 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 Policv 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 ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-43 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Eligible Child Care Expenses 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 Child Care 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. For example, if the care provider also cares for a child with disabilities who is 13 or older,the cost of care will be prorated. 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 his or her 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 Policv 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 study hour for each hour spent in class. To establish the reasonableness of child care costs, the PHA will use the schedule of child care costs from the local welfare agency. Families may present, and the PHA will consider,justification for costs that exceed typical costs in the area. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-44 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. PART III: CALCULATING FAMILY SHARE AND PHA SUBSIDY 6-III.A. OVERVIEW OF RENT AND SUBSIDY CALCULATIONS TTP Formula [24 CFR 5.6281 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-IIL13. 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 5.6281 PHA Policy Welfare rent does not apply in this locality. Minimum Rent[24 CFR 5.6301 PHA Policy The minimum rent for this locality is $390.00. 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. The income used for this determination must have been verified no earlier than 60 days before the family's voucher was issued. (For a discussion of the application of payment standards, see section 6- IILC.) ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-45 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 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-IILC.) Utility Reimbursement [24 CFR 982.514(b)] 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. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-46 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-IILB. FINANCIAL HARDSHIPS AFFECTING MINIMUM RENT [24 CFR 5.6301 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-Derived 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 Policv family's 444� to pay tke minimum rei4. L'Or ., f..«..:l . ..:t:..,.f@r .. ,l,.t,.««.:«..t:,... ,.f eligibil t. 4.8 14a f dskip period will ,.44,1 .. of ,, r.a..slop @. Ee... ption was ed tipon ,. A E44:414 A 04140r ,.n,...418 r.,...dSki . ,.:..,........,,t,...,.,.,, The minimum rent is set at $0.00;therefore, no financial hardship exists. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6_47 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. For .. R.«.:1. 4.. ......1:R ....A,.«41.:.. ..«,.. :.ie ff'41.,. ,.....se ,.f4 e potefAi.l ,. ,.. :,d: . M11414A 41+.. f..«.:1. ''.. f..:l..«..to «... «..«4 to 414A e or 4..4..44 paid.4:1:4:.... .�A. / A A A 4h h eeouffed in 41. 44.«.:1y a�rr-om� . A,the dent—h has preated f:.. ., ..«,.:a1 l,a«A..1.:.. 1............. .f R...,.«..1 «,.1..4,.A ,.�Epeffses orthe less 441.8 R.«.:1.. /G\ 4440 f..«.:1. 1..... ,. ,.,.,1 ,.41.,.« ,.:«,...«...4..«,.,... ,1,.4,.««.:..,.,1 1.. 41.,. 129-A, SPT T1..,. DII A 1.,.., .4,.4 ,..,4..1.1:..1.,.,1 ,. additional 1...«,1..1.:.. ,.«:4..«:.. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-48 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 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. nun n,.c,... �o-r T-he nun ,7,.4:44,.., 4,.«444era f. 1...«,7..1.:44 4444 .. 1...«,7..1.:44 ..4.44....4...7 to last 90 days or less. 1 eng teff L...«,7.hip is defined .. .. hardship ,.4,44,.,44,.,7 4.. 1..4 «4,.«,.than 90 ,7..4 S. 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$35. Family Share—No Hardship Family Share—With Hardship $0 30% of monthly adjusted income $0 30% of monthly adjusted income $15 10% of monthly gross income $15 10% of monthly gross income N/A Welfare rent N/A Welfare rent $35 Minimum rent $35 Minimum rent Minimum rent applies. Hardship exemption granted. TTP — $35 TTP — $15 L...«,7..1.:44 14.... ..44,.,.4,.,7 47.8 family's 4:7:4. 4,. .4..4 41.,. T-he nun ..:11 «4..1 ,.474.. ,7,.4,.««4:44..4:on 414..«,7..1.:44 .4:474:44 40 ,...7,.44,7..« ,7..4 .. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-49 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 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. nun Poli �r T-he P144;,;411 require t4o fafflilyto repay t4o suspended a_meu4q4;A44lqi4q 30 ealendaf days 441.,. 1214-A's 44otiee t1...t .. L...«,1.kip @. ie fflption kas not Leen ,.......t,.,l 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. nun Poli �o-r T-h,. P144 ..:11 ,.fAer:..t,. .. rep ,.«t ..,..-ee ffl,.«t in app,.«A....,.,. .. 414 tl.,. ..«,.,.,.A..«,... found in Chaptef 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. rrxrrronvp 44.0 1.,...,1„1.:« ffri .,1 ,...,1.. ..1.,... ..« ,.Ft 8 f@11,... ffg O irO..«...t....,.,... ......1... (1) A4 .... 44or:«. o ...1 t o R.«.:1. 's ,...4eul..ted TTP is ,...,..d,.«than t o «.«tc 'aPPE)14T'T'7`Tn «...t:,... ..:11 ,.,.«ti....,.t,. be «,.,.,.,....:-,,.,1 ..«til 4.,. ,.umul..t:. ,. ..«.eufA @. Eempted is ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-50 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-IILC. APPLYING PAYMENT STANDARDS [24 CFR 982.5051 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 an FMR area and a family's unit is located in the exception area, the PHA must use the appropriate payment standard for the exception area. 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. Decreases If the amount on the payment standard schedule is decreased during the term of the HAP contract, the lower payment standard generally will be used beginning at the effective date of the family's second regular reexamination following the effective date of the decrease in the payment standard. The PHA will determine the payment standard for the family as follows: Step 1: At the first regular reexamination following the decrease in the payment standard, the PHA will determine the payment standard for the family using the lower of the payment standard for the family unit size or the size of the dwelling unit rented by the family. Step 2: The PHA will compare the payment standard from step 1 to the payment standard last used to calculate the monthly housing assistance payment for the family. The payment standard used by the PHA at the first regular reexamination following the decrease in the payment standard will be the higher of these two payment standards. The PHA will advise the family that the application of the lower payment standard will be deferred until the second regular reexamination following the effective date of the decrease in the payment standard. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-51 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. Step 3: At the second regular reexamination following the decrease in the payment standard,the lower payment standard will be used to calculate the monthly housing assistance payment for the family unless the PHA has subsequently increased the payment standard, in which case the payment standard will be determined in accordance with procedures for increases in payment standards described below. Increases 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. 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 in Family Unit Size 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. Reasonable Accommodation 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 within the basic range. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-52 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-IILD. APPLYING UTILITY ALLOWANCES [24 CFR 982.5171 Overview A PHA-established utility allowance schedule is used in determining family share and PHA subsidy. The PHA must use the appropriate utility allowance. The utility allowance for a family shall be the lower of(1)the utility allowance amount for the family unit size; or (2)the utility allowance amount for the unit size of the unit rented by the family. However, upon the request of a family that includes a person with disabilities,the PHA must approve a utility allowance higher than the applicant amount if such a higher utility allowance is needed as a reasonable accommodation. See Chapter 5 for information on the PHA's subsidy standards. For policies on establishing and updating utility allowances, see Chapter 16. Reasonable Accommodation HCV program regulations require a PHA to approve a utility allowance amount higher than shown on the PHA's schedule if a higher allowance is needed as a reasonable accommodation for a family member with a disability. For example, if a family member with a disability requires such an accommodation, the PHA will approve an allowance for air-conditioning, even if the PHA has determined that an allowance for air-conditioning generally is not needed. The family must request the higher allowance and provide the PHA with an explanation of the need for the reasonable accommodation and information about the amount of additional allowance required [HCV GB, p. 18-8]. Utility Allowance Revisions At reexamination, the PHA must use the PHA current utility allowance schedule [24 CFR 982.517(d)(2)]. PHA Policv 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. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-53 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. 6-IILE. PRORATED ASSISTANCE FOR MIXED FAMILIES [24 CFR 5.5201 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 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. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6_54 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. EXHIBIT 6-1: ANNUAL INCOME INCLUSIONS 24 CFR 5.609 (a)Annual income means all amounts, (3) Interest, dividends, and other net income of monetary or not, which: any kind from real or personal property. (1) Go to, or on behalf of, the family head or Expenditures for amortization of capital spouse (even if temporarily absent) or to any indebtedness shall not be used as deductions in other family member; or determining net income. An allowance for depreciation is permitted only as authorized in (2) Are anticipated to be received from a paragraph (b)(2) of this section. Any source outside the family during the 12-month withdrawal of cash or assets from an period following admission or annual investment will be included in income, except reexamination effective date; and to the extent the withdrawal is reimbursement (3) Which are not specifically excluded in of cash or assets invested by the family. Where paragraph (c) of this section. the family has net family assets in excess of $5,000, annual income shall include the (4) Annual income also means amounts greater of the actual income derived from all derived (during the 12-month period)from net family assets or a percentage of the value assets to which any member of the family has of such assets based on the current passbook access. savings rate, as determined by HUD; (b)Annual income includes, but is not limited (4) The full amount of periodic amounts to: received from Social Security, annuities, (1) The full amount, before any payroll insurance policies, retirement funds, pensions, deductions, of wages and salaries, overtime disability or death benefits, and other similar pay, commissions, fees, tips and bonuses, and types of periodic receipts, including a lump- other compensation for personal services; sum amount or prospective monthly amounts for the delayed start of a periodic amount (2) The net income from the operation of a (except as provided in paragraph (c)(14) of business or profession. Expenditures for this section); business expansion or amortization of capital (5)Payments in lieu of earnings, such as indebtedness shall not be used as deductions in unemployment and disability compensation, determining net income. allowance for worker's compensation and severance pay depreciation of assets usedd in a business (except as provided in paragraph (c)(3) of this profession may be deducted, based on straight line depreciation, as provided in Internal section); 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; ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-55 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. (6) Welfare assistance payments. (9) For section 8 programs only and as (i) Welfare assistance payments made under provided in 24 CFR 5.612, any financial the Temporary Assistance for Needy Families assistance, in excess of amounts received for (TANF)program are included in annual tuition, that an individual receives under the income only to the extent such payments: Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from private sources, or from an (A) Qualify as assistance under the TANF institution of higher education (as defined program definition at 45 CFR 260.311; and under the Higher Education Act of 1965 (20 (B) Are not otherwise excluded under U.S.C. 1002)), shall be considered income to paragraph (c) of this section. that individual, except that financial assistance described in this paragraph is not considered (ii) If the welfare assistance payment includes annual income for persons over the age of 23 an amount specifically designated for shelter with dependent children. For purposes of this and utilities that is subject to adjustment by the paragraph, "financial assistance" does not welfare assistance agency in accordance with include loan proceeds for the purpose of the actual cost of shelter and utilities, the determining income. amount of welfare assistance income to be included as income shall consist of: HHS DEFINITION OF "ASSISTANCE" (A) The amount of the allowance or grant exclusive of the amount specifically 45 CFR: GENERAL TEMPORARY designated for shelter or utilities; plus ASSISTANCE FOR NEEDY FAMILIES (B) The maximum amount that the welfare 260.31 What does the term "assistance" assistance agency could in fact allow the mean? family for shelter and utilities. If the family's (a)(1) The term "assistance" includes cash, welfare assistance is ratably reduced from the payments, vouchers, and other forms of standard of need by applying a percentage, the benefits designed to meet a family's amount calculated under this paragraph shall ongoing basic needs (i.e., for food, clothing, be the amount resulting from one application shelter, utilities, household goods, personal of the percentage. care items, and general incidental (7)Periodic and determinable allowances, expenses). such as alimony and child support payments, (2) It includes such benefits even when they and regular contributions or gifts received are: from organizations or from persons not residing in the dwelling; (i) Provided in the form of payments by a TANF agency, or other agency on its (8) All regular pay, special pay and allowances behalf, to individual recipients; and of a member of the Armed Forces (except as provided in paragraph (c)(7) of this section) (ii) Conditioned on participation in work experience or community service (or any other work activity under 261.30 of this chapter). Text of 45 CFR 260.31 follows. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6_56 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. (3) Except where excluded under paragraph (3) Supportive services such as child care (b) of this section, it also includes and transportation provided to families who supportive services such as transportation are employed; and child care provided to families who are (4) Refundable earned income tax credits; not employed. (b) [The definition of"assistance"] (5) Contributions to, and distributions from, excludes: (1)Nonrecurrent, short-term Individual Development Accounts; benefits that: (6) Services such as counseling, case (i) Are designed to deal with a specific management, peer support, child care crisis situation or episode of need; information and referral, transitional services,job retention,job advancement, (ii) Are not intended to meet recurrent or and other employment-related services that ongoing needs; and do not provide basic income support; and (iii) Will not extend beyond four months. (7) Transportation benefits provided under a (2) Work subsidies (i.e., payments to Job Access or Reverse Commute project, employers or third parties to help cover the pursuant to section 404(k) of[the Social costs of employee wages, benefits, Security] Act, to an individual who is not supervision, and training); otherwise receiving assistance. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-57 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. EXHIBIT 6-2: ANNUAL INCOME EXCLUSIONS 24 CFR 5.609 (c)Annual income does not include the are set aside for use under a Plan to Attain following: Self-Sufficiency (PASS); (1) Income from employment of children (iii) Amounts received by a participant in other (including foster children)under the age of 18 publicly assisted programs which are years; specifically for or in reimbursement of out-of- pocket expenses incurred (special equipment, (2)Payments received for the care of foster clothing, transportation, child care, etc.) and children or foster adults (usually persons with which are made solely to allow participation in disabilities, unrelated to the tenant family, who a specific program; are unable to live alone); (iv) Amounts received under a resident service (3) Lump-sum additions to family assets, such stipend. A resident service stipend is a modest as inheritances, insurance payments (including amount(not to exceed $200 per month) payments under health and accident insurance received by a resident for performing a service and worker's compensation), capital gains and for the PHA or owner, on a part-time basis, settlement for personal or property losses that enhances the quality of life in the (except as provided in paragraph (b)(5) of this development. Such services may include, but section); are not limited to,fire patrol, hall monitoring, (4) Amounts received by the family that are lawn maintenance, resident initiatives specifically for, or in reimbursement of,the coordination, and serving as a member of the cost of medical expenses for any family PHA's governing board. No resident may member; receive more than one such stipend during the same period of time; (5) Income of a live-in aide, as defined in Sec. 5.403; (v) Incremental earnings and benefits resulting to any family member from participation in (6) Subject to paragraph (b)(9) of this section, qualifying State or local employment training the full amount of student financial assistance programs (including training programs not paid directly to the student or to the affiliated with a local government) and educational institution; training of a family member as resident (7) The special pay to a family member management staff. Amounts excluded by this serving in the Armed Forces who is exposed to provision must be received under employment hostile fire; training programs with clearly defined goals and objectives, and are excluded only for the (8) (i) Amounts received under training period during which the family member programs funded by HUD; participates in the employment training (ii) Amounts received by a person with a program; disability that are disregarded for a limited (9) Temporary, nonrecurring or sporadic time for purposes of Supplemental Security income (including gifts); Income eligibility and benefits because they ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-58 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. (10) Reparation payments paid by a foreign (16) Amounts paid by a State agency to a government pursuant to claims filed under the family with a member who has a laws of that government by persons who were developmental disability and is living at home persecuted during the Nazi era, to offset the cost of services and equipment (11) Earnings in excess of$480 for each full- needed to keep the developmentally disabled time student 18 years old or older(excluding family member at home; or the head of household and spouse); (17) Amounts specifically excluded by any (12) Adoption assistance payments in excess other Federal statute from consideration as of$480 per adopted child; income for purposes of determining eligibility or benefits under a category of assistance (13) [Reserved] programs that includes assistance under any (14) Deferred periodic amounts from program to which the exclusions set forth in 24 supplemental security income and social CFR 5.609(c) apply. A notice will be security benefits that are received in a lump published in the Federal Register and sum amount or in prospective monthly distributed to PHAs and housing owners identifying the benefits that qualify for this amounts. exclusion. Updates will be published and (15) Amounts received by the family in the distributed when necessary. [See Section form of refunds or rebates under State or local 6-I.M. for a list of benefits that qualify for law for property taxes paid on the this exclusion.] dwelling unit; ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-59 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. EXHIBIT 6-3: TREATMENT OF FAMILY ASSETS 24 CFR 5.603(b) Net Family Assets (1)Net cash value after deducting reasonable (3) In determining net family assets, PHAs or costs that would be incurred in disposing of owners, as applicable, shall include the value real property, savings, stocks, bonds, and other of any business or family assets disposed of by forms of capital investment, excluding an applicant or tenant for less than fair market interests in Indian trust land and excluding value (including a disposition in trust, but not equity accounts in HUD homeownership in a foreclosure or bankruptcy sale) during the programs. The value of necessary items of two years preceding the date of application for personal property such as furniture and the program or reexamination, as applicable, in automobiles shall be excluded. excess of the consideration received therefor. (2) In cases where a trust fund has been In the case of a disposition as part of a established and the trust is not revocable by, or separation or divorce settlement,the under the control of, any member of the family disposition will not be considered to be for less or household, the value of the trust fund will than fair market value if the applicant or tenant not be considered an asset so long as the fund receives important consideration not continues to be held in trust. Any income measurable in dollar terms. distributed from the trust fund shall be counted (4) For purposes of determining annual income when determining annual income under Sec. under Sec. 5.609,the term "net family assets" 5.609. does not include the value of a home currently being purchased with assistance under part 982, subpart M of this title. This exclusion is limited to the first 10 years after the purchase date of the home. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6_60 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. EXHIBIT 6-4: EARNED INCOME DISALLOWANCE FOR PERSONS WITH DISABILITIES 24 CFR 5.617 Self-sufficiency incentives for persons with disabilities—Disallowance of increase in annual income. (a)Applicable programs. The disallowance of (3) Whose annual income increases, as a increase in annual income provided by this result of new employment or increased section is applicable only to the following earnings of a family member who is a person programs: HOME Investment Partnerships with disabilities, during or within six months Program (24 CFR part 92); Housing after receiving assistance, benefits or services Opportunities for Persons with AIDS (24 CFR under any state program for temporary part 574); Supportive Housing Program (24 assistance for needy families funded under CFR part 583); and the Housing Choice Part A of Title IV of the Social Security Act, Voucher Program (24 CFR part 982). as determined by the responsible entity in (b)Definitions. The following definitions consultation with the local agencies apply for purposes of this section. administering temporary assistance for needy families (TANF) and Welfare-to-Work Disallowance. Exclusion from annual income. (WTW)programs. The TANF program is not Previously unemployed includes a person with limited to monthly income maintenance, but disabilities who has earned, in the twelve also includes such benefits and services as one-time payments, wage subsidies and months previous to employment, no more than would be received for 10 hours work per transportation assistance-- provided that the week for 50 weeks at the established minimum total amount over asix-month period is at least w $500. age. Qualified family. A family residing in housing (c)Disallowance of increase in annual assisted under one of the programs listed in income paragraph (a) of this section or receiving (1) Initial twelve month exclusion. During the tenant-based rental assistance under one of the cumulative twelve month period beginning on programs listed in paragraph (a) of this the date a member who is a person with section. disabilities of a qualified family is first (1) Whose annual income increases as a result employed or the family first experiences an of employment of a family member who is a increase in annual income attributable to person with disabilities and who was employment, the responsible entity must previously unemployed for one or more years exclude from annual income (as defined in the prior to employment; regulations governing the applicable program listed in paragraph (a) of this section) of a (2) Whose annual income increases as a result qualified family any increase in income of the of increased earnings by a family member who family member who is a person with is a person with disabilities during disabilities as a result of employment over participation in any economic self-sufficiency prior income of that family member. or other job training program; or ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-61 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. (2) Second twelve month exclusion and phase- (3) Maximum four year disallowance. The in. During the second cumulative twelve disallowance of increased income of an month period after the date a member who is a individual family member who is a person person with disabilities of a qualified family is with disabilities as provided in paragraph first employed or the family first experiences (c)(1) or(c)(2) is limited to a lifetime 48 an increase in annual income attributable to month period. The disallowance only applies employment, the responsible entity must for a maximum of twelve months for exclude from annual income of a qualified disallowance under paragraph (c)(1) and a family fifty percent of any increase in income maximum of twelve months for disallowance of such family member as a result of under paragraph (c)(2), during the 48 month employment over income of that family period starting from the initial exclusion under member prior to the beginning of such paragraph (c)(1) of this section. employment. (d)Inapplicability to admission. The disallowance of increases in income as a result of employment of persons with disabilities under this section does not apply for purposes of admission to the program (including the determination of income eligibility or any income targeting that may be applicable). ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-62 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. EXHIBIT 6-5: 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 (i) at expiration of a lifetime or other time covered families who reside in public housing limit on the payment of welfare benefits; (part 960 of this title) or receive Section 8 (ii)because a family member is not able to tenant-based assistance (part 982 of this title). obtain employment, even though the family (b)Definitions. The following definitions member has complied with welfare agency apply for purposes of this section: economic self-sufficiency or work activities Covered families. Families who receive requirements; or welfare assistance or other public assistance (iii)because a family member has not benefits ("welfare benefits")from a State or complied with other welfare agency other public agency("welfare agency") under a requirements. program for which Federal, State, or local law requires that a member of the family must (c)Imputed welfare income. participate in an economic self-sufficiency (1) A family's annual income includes the program as a condition for such assistance. amount of imputed welfare income (because of Economic self-sufficiency program. See a specified welfare benefits reduction, as definition at Sec. 5.603. specified in notice to the PHA by the welfare agency), plus the total amount of other annual Imputed welfare income. The amount of income as determined in accordance with Sec. annual income not actually received by a 5.609. family, as a result of a specified welfare (2) At the request of the PHA, the welfare benefit reduction,that is nonetheless included agency will inform the PHA in writing of the in the family's annual income for purposes of amount and term of any specified welfare determining rent. benefit reduction for a family member, and the Specified welfare benefit reduction. reason for such reduction, and will also inform (1) A reduction of welfare benefits by the the PHA of any subsequent changes in the welfare agency, in whole or in part, for a term or amount of such specified welfare family member, as determined by the welfare benefit reduction. The PHA will use this agency, because of fraud by a family member information to determine the amount of in connection with the welfare program; or imputed welfare income for a family. because of welfare agency sanction against a (3) A family's annual income includes imputed family member for noncompliance with a welfare income in family annual income, as welfare agency requirement to participate in an determined at the PHA's interim or regular economic self-sufficiency program. reexamination of family income and (2) "Specified welfare benefit reduction" does composition, during the term of the welfare not include a reduction or termination of benefits reduction (as specified in information welfare benefits by the welfare agency: provided to the PHA by the welfare agency). ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-63 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. (4) The amount of the imputed welfare income PHA shall give the family written notice of is offset by the amount of additional income a such denial, with a brief explanation of the family receives that commences after the time basis for the PHA determination of the amount the sanction was imposed. When such of imputed welfare income. Such notice shall additional income from other sources is at also state that if the family does not agree with least equal to the imputed welfare income, the the PHA determination, the family may imputed welfare income is reduced to zero. request an informal hearing on the (5) The PHA may not include imputed welfare determination under the PHA hearing income in annual income if the family was not procedure. an assisted resident at the time of sanction. (e)PHA relation with welfare agency. (d)Review ofPHA decision. (1) The PHA must ask welfare agencies to (1)Public housing. If a public housing tenant inform the PHA of any specified welfare claims that the PHA has not correctly benefits reduction for a family member,the calculated the amount of imputed welfare reason for such reduction, the term of any such income in accordance with HUD requirements, reduction, and any subsequent welfare agency and if the PHA denies the family's request to determination affecting the amount or term of modify such amount, the PHA shall give the a specified welfare benefits reduction. If the tenant written notice of such denial, with a welfare agency determines a specified welfare brief explanation of the basis for the PHA benefits reduction for a family member, and determination of the amount of imputed gives the PHA written notice of such welfare income. The PHA notice shall also reduction,the family's annual incomes shall state that if the tenant does not agree with the include the imputed welfare income because of PHA determination, the tenant may request a the specified welfare benefits reduction. grievance hearing in accordance with part 966, subpart B of this title to review the PHA (2) The PHA is responsible for determining determination. The tenant is not required to the amount of imputed welfare income that is pay an escrow deposit pursuant to Sec. included in the family's annual income as a 966.55(e)for the portion of tenant rent result of a specified welfare benefits reduction attributable to the imputed welfare income in as determined by the welfare agency, and order to obtain a grievance hearing on the specified in the notice by the welfare agency to PHA determination. the PHA. However, the PHA is not responsible for determining whether a reduction of welfare (2) Section 8 participant. A participant in the benefits by the welfare agency was correctly Section 8 tenant-based assistance program determined by the welfare agency in may request an informal hearing, in accordance with welfare program requirements accordance with Sec. 982.555 of this title, to and procedures, nor for providing the review the PHA determination of the amount opportunity for review or hearing on such of imputed welfare income that must be welfare agency determinations. included in the family's annual income in accordance with this section. If the family (3) Such welfare agency determinations are claims that such amount is not correctly the responsibility of the welfare agency, and calculated in accordance with HUD the family may seek appeal of such requirements, and if the PHA denies the determinations through the welfare agency's family's request to modify such amount, the normal due process procedures. The PHA shall ©Copyright 2013 Nan McKay&Associates,Inc. Page 6-64 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use. be entitled to rely on the welfare agency notice to the PHA of the welfare agency's determination of a specified welfare benefits reduction. ©Copyright 2013 Nan McKay&Associates,Inc. Page 6_65 City of Dubuque Adminplan 05'201511/2015 Unlimited copies may be made for internal use.