May 2003Chapter 6: Intro to Case Studies / Chapter 7: Case Study 1 1 HUD RHIIP Training – PH/HCV...

May 2003 Chapter 6: Intro to Case Studies / Chapter 7: Case Study 1

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HUD RHIIP Training – PH/HCV

Chapter 6: Introduction to Case Studies


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Certification Process

Opening Question:

• Remembering the overview of the housing process yesterday, at what point would the rent calculation process be used?


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BackgroundOverview of the Housing Process

Intake

Initial Lease-Up

Annual Activities

Interim Activities

Terminations


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Primary Types of Certifications

• Initial Certification• Annual Recertification• Interim Recertification

• They all follow a basic process


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• Family completes paperwork documenting their family composition, income, assets, and allowances and deductions

• PHA reviews paperwork and interviews family (UIV)

• PHA has family sign verification release forms


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• PHA photocopies documents provided by family which prove family statements

• PHA sends out verification forms or communicates directly with third party

• PHA compares verification forms, when returned, with family statements and documents


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• PHA resolves differences in documents by calling third party source and/or family

• PHA enters information into computer and/or calculates manually

• PHA prints out documents for file

• PHA transmits data to PIC monthly


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Training Format

• We have reviewed the program basics• Next, we have to focus on the difficult areas

of rent calculation• Case studies focus on rent calculation

problem areas and simulate the process a reviewer would undertake at the PHA


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The HUD Reviewer

• The HUD Reviewer’s role for RHIIP is to see that the steps in the process that affect rent calculation have been done correctly in order to identify errors.

• In this training program, we will:– Show you typical documents – Focus on the difficult areas to calculate– Simulate what you will do in the field


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Training Format

• In each case study, we will:– Lecture on the regulations as they pertain to

the individual topic(s) we will be emphasizing

– Perform a calculation on the part of the case relevant to that topic on the HUD Appendix C worksheets


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RHIIP Training – PH/HCV

Chapter 7: Case Study 1: Alexander Family


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Alexander Case Study:Process Overview

• Topic presentation• Students complete case study

– Using Appendix C, File Review Checklist Worksheets

• Students review PHA’s HUD 50058• Students complete Appendix A, Tenant File

Review Checklist• Review correct checklist and HUD 50058


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Alexander Case Study: Topics

• Annual Income– Sporadic Income– Earned Income Disallowance (PH)– Earned Income Disallowance for Persons

with Disabilities (HCV)


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• Adjusted Income– Elderly/Disability Allowance– Dependent Allowance– Child Care Allowance


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• Total Tenant Payment– Minimum Rent Hardship Exemptions

• Rent Calculation (PH Only)– Income Based Rents– Flat Rents


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Annual Income


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Annual Income

• All amounts, monetary or not, that go to or are received on behalf of any family member

• From sources outside the family• Anticipated during the next 12 months• All amounts not specifically excluded by

regulation


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Regular Employment

• Annual income includes employment income– Full amount before payroll deductions– Overtime, commissions, fees, tips and

bonuses– Other compensation for personal

services


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Regular Employment

• Reported income will usually be in amounts over a period of time that are less than annual (hourly, weekly, bi-weekly, etc)

• Convert reported amounts to annual income


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Sporadic Income

• Temporary, nonrecurring, or sporadic income (including gifts) are excluded from annual income

• Sporadic income is income that is not reliable nor periodic


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Sporadic Income Example 1

• Justine Cowan – typist with temp agency– Is not always well enough to work full-time– Last year worked 6 months– This year has more medical problems– Doesn’t know how much will work this year– Not working at time of recertification

• How do we treat this income?


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• Since not working now, do not count employment income

• Must return for an interim when she resumes work– Unless PHA’s policy does not require interim

recertifications for income increases – (think UIV!)


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• Sam Daniels – receives Social Security Disability plus works as handyman occasionally.

• Claims only worked a couple times last year (no documentation)


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• Does this fit description of sporadic income? – Yes, his earnings fit the category of

nonrecurring, sporadic income • How do you handle his working income?

– Don’t include in annual income– Tell Mr. Daniels he must report any regular work

or steady jobs he takes


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Mandatory Earned Income Disallowance (PH)

• CFR 960.255 (please note)• Developed to encourage economic self-

sufficiency• A family’s rent will not increase for a period of

time if, under certain circumstances, someone in the family begins work or has an increase in earned income

• The increase in rent will be phased-in


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Earned Income Disallowance for Persons w/Disabilities (HCV)

• CFR 5.617• Same concept as MEID in PH but for

Section 8 it applies to an adult family member who is a person with disabilities and begins work or has an increase in earned income


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Mandatory Earned Income Disallowance

• Certain increases in earned income are “disallowed”– An income exclusion– Reported, then subtracted from total

earnings• Not all earned income increases are

disallowed – family has to qualify


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MEID - Qualified Family (PH)

• Family qualifies for the disallowance if:– Adult family member begins employment

or has an increase in earned income

AND


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MEID - Qualified Family (PH)

• Has been previously unemployed for 1 or more years

• Is currently involved in an economic self-sufficiency or job training program

• Has, within the past 6 months, received TANF or TANF related benefits and services


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MEID - Qualified Family (HCV)

• Family qualifies for the disallowance if:– A disabled adult family member begins

employment or has an increase in earned income

AND


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MEID - Qualified Family (HCV)

• Has been previously unemployed for 1 or more years

• Is currently involved in an economic self-sufficiency or job training program

• Has, within the past 6 months, received TANF or TANF related benefits and services


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Previously Unemployed Includes

• Those unemployed for 1 or more years• Those who have worked in the past year but

earned less than they would have earned at the prevailing minimum wage, 10 hours per week, for 50 weeks– “Prevailing minimum wage” is the Federal,

State, or Local minimum wage, whichever is greater


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During Economic Self-Sufficiency

• Family member must obtain employment or experience increase in earnings during economic self-sufficiency– for HCV, family member must also be

disabled


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• Example– While participating in a job training

program an individual gets a job. This qualifies the family for the disallowance

– Would not qualify if the training program had ended before the individual became employed


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• Still considered “during” if training ended but certain services, such as a mentoring program, began when the person became employed


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Economic Self-Sufficiency

• Definition• CFR 5.603 (please note)

– Program designed to encourage, train, assist or facilitate economic independence or to provide work


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Economic Self-Sufficiency

• Job training• Employment counseling• Work placement• Basic skills training

• Any program necessary to ready a person for work, including substance abuse or mental health treatment

• English proficiency• Workfare• Financial/household mgt• Apprenticeship


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TANF In Past 6 Months

• Qualifies if:– Received any amount of regular TANF

monthly maintenance income in the past 6 months


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TANF In Past 6 Months

• Qualifies if…– Received TANF-related benefits or

services totaling at least $500 in past 6 months• Includes such benefits and services as

one-time payments, wage subsidies and transportation assistance


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Initial Exclusion

• Exclude (disallow) any increase in income of the family member as a result of employment over prior income of that family member

• For cumulative 12 month period beginning on the date the member qualifies

• Breaks in employment will not count toward the 12 months


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Second Exclusion and Phase-in

• Begins after 12 cumulative months of full exclusion – Exclude 50 percent of any increase in family

member’s income as a result of employment over income of that family member prior to the beginning of employment

– employment income is phased-in• For 12 cumulative months

– breaks in employment won’t count toward exclusion


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Maximum 4 Year Disallowance

• Individual has 4 years to receive:– 12 cumulative months of full exclusion– 12 cumulative months of phase-in exclusion

• This is a lifetime exclusion benefit per family member

• Could have more than one family member receiving the disallowance at the same time


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Earned Income Disallowance and Interims

• HUD Guidance:– For tracking and administrative purposes, PHAs

can begin the EID on the on the 1st day of the month following the eff. date of employment

– At the onset of the 50% phase-in period and throughout, HUD strongly recommends that PHAs conduct interim reexams to better ensure accuracy in income and rent determination


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Disallowance Example (PH)

• James Stewart reports new job - $9000/year– Quit old job earning $2000 annually– Qualifying minimum wage is $6.00 per hr – Was not in economic self-sufficiency

program– Was not receiving TANF


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• Does James qualify the Stewart family for the disallowance?

• Why or why not?


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• Answer: – Yes. Because he is considered

previously unemployed

$6.00 x 10 hrs x 50 weeks = $3,000

James’ previous annual income was $2,000


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Disallowance Example

• James’ previous annual income was $2,000

• James is now earning $9,000 • How much is excluded during initial

exclusion?


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• James is now earning $9,000 • How much is excluded during initial

exclusion?– $7,000 is excluded during the initial full

exclusion period. Only count $2,000


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• James is now earning $9,000 • With everything the same, how much is

excluded during the phase-in?


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• James’ previous annual income was $2,000• James is now earning $9,000 • With everything the same, how much is

excluded during the phase-in? – $3,500 is excluded during the second

exclusion period. $5,500 is now counted as income


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Individual Savings Accounts (PH Only)

• CFR 960.255(d)• As an alternative to the disallowance of

earned income increases the PHA may choose to provide for Individual Savings Accounts (ISAs)

• The PHA must state in policy if they choose to offer ISAs to families qualifying for the disallowance


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Individual Savings Accounts (PH Only)

• If adopting this policy the PHA must:– Inform qualifying family of ISA option – Deposit in the savings account the

difference between the rent charged without the disallowance and the rent charged with the disallowance if the family chooses the ISA option


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Annual Income Discussion Question

• How will you know whether income should be excluded?– Employment– Training or self-sufficiency income– TANF

• Does the PHA’s Personal Declaration form ask for all of the information needed to make a determination?


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Adjusted Income


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Elderly/Disability Allowance

• $400 per family where the head or spouse is at least 62 or disabled

• $400 is the maximum amount the family can receive, even if both head and spouse are elderly or disabled

Page 7-10


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Definition of Person With Disabilities

• 42 U.S.C. Section 423• Developmental disability (42 U.S.C.

6001(8)) • Physical, mental or emotional

impairment that meets HUD requirements• Extended definition in the book, also see

CFR 5.403


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Verification of Person With Disabilities

• Continued qualification of disability needed for deductions

• Knowledgeable, professional source• Receipt of SS disability ok• Other documents can be used for verification• May not require statement from physician if

other verification is available


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Dependents

• Dependents include:– minors (under 18)– adult full-time students– persons with disabilities

• Head, spouse, co-head, foster child/adult, live-in aide or live-in aide family members are NEVER dependents


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Dependent Allowance

• $480 per person who meets definition of dependent– Example 1:

• Head age 35• Brother, age 37, with disability• Two minor children

– How much is the dependent allowance?


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Dependent Allowance Example 1

Head age 35Brother, age 37, with disabilityTwo minor children• Dependent allowance is $1440Dependent allowance is $1440

(disabled brother and two minors are dependents: 3 x 480 = $1440)


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Dependent Allowance Example 2

Head is age 35 and disabledSpouse is 34 and a full-time studentSon is 20 and employedDaughter is age 16 and in school, working

part-time• What is this family’s dependent

allowance?


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Dependent AllowanceExample 2: Answer

Head is age 35 and disabledSpouse is 34 and a full-time studentSon is 20 and employedDaughter is age 16 and in school, working

part-time• Answer: There is only one dependentThere is only one dependent –

the child age 16 - allowance is $480allowance is $480


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Child Care Allowance

• Reasonable child care permitted:– For children under 13

• Including foster children– If care enables a family member to

• Be gainfully employed• Actively seek employment• Further his/her education


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• Reasonable child care permitted…– Only to extent such amounts are not

reimbursed– PHA to obtain verification of the family’s

actual payments directly from provider


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• If necessary to permit employment, amount deducted shall not exceed amount of employment income that is included in annual income


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• Child care is anticipated over 12-month period– When school age children are not in school,

child care expenses may be greater– Take anticipated changes in child care

expenses into consideration when calculating annual expenses


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• If more than one person is working, must have policy to determine which person will be considered as being enabled to work by the child care


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• If child care enables person to both work and attend school/seek employment, identify portion of expense related to work and compare with amount of employment income included in annual income


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• If expense is for two children but one is 13 or older, only child care for child under 13 may be allowed– If a child 13 or older is disabled, they

may qualify for disability assistance expense


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Total Tenant Payment(TTP)


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Calculation of TTP

• TTP is the greater of:– 30% of Monthly Adjusted Income– 10% of Monthly Income– Welfare Rent (in as-paid States only)– PHA's minimum TTP ($0-50, depending on

PHA policy)• TTP is the amount the tenant pays toward rent

and an allowance for utilities


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How to Get TTP

• Annual Income $2000• 4 children x $480 1920• Adjusted Income $ 80• Annual divided by 12 = $167 (mo. Inc)• Adjusted divided by 12 = $7 (mo adj inc)


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How to Get TTP

• 10% of $167 = $17• 30% of $7 = $2• Minimum Rent $25• Welfare Rent $0 (N/A)• TTP is ??????


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How to Get TTP

• 10% of $167 = $17• 30% of $7 = $2• Minimum Rent $25• Welfare Rent $0 (N/A)• TTP is $25TTP is $25


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Minimum Rent


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Minimum Rent

• PHAs must establish minimum rents$0 - $50

• PHAs must adopt minimum rent hardship exemption policies


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Minimum Rent Hardship Exemptions

• Lost eligibility/awaiting determination for Federal, State or local assistance program

• Would be evicted as result of requirement• Family income decrease because of changed

circumstances (unemployed)• Death in family• Other circumstances determined (PHA/HUD)


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Minimum Rent Process

• PHA notifies family if TTP = Minimum Rent• Family requests exemption


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• PHA suspends payment beginning of next month– Family not required to pay during period– PHA may request reasonable documentation

of hardship – PH Only: PHA may not evict family for

nonpayment of minimum rent for a 90-day period, beginning the month after the family requests exemption


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• PHA must promptly determine– if hardship exists– whether temporary (PHA policy) or long

term


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• If PHA determines no hardship under statute, minimum rent is imposed retroactively


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• If PHA determines the hardship is temporary:– HCV: no minimum rent during 90 day

suspension period• Minimum rent imposed retroactively• Reasonable repayment agreement

offered


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• If PHA determines the hardship is temporary:– PH: PHA must reinstate minimum rent

from beginning of suspension• Reasonable repayment agreement

offered


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• If PHA determines hardship of long-term duration exists, minimum rent is exempted retroactively to date of family’s request for exemption

• Exemption continues until hardship no longer exists


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• Policies are retroactive to 10/21/98• If family was qualified for mandatory

exemptions and was charged minimum rent, PHA must reimburse family or offset future rent payment


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TTP if Minimum Rent Waived

• If minimum rent is waived due to hardship, the TTP is based on the greater of:– 30% of monthly adjusted income; or– 10% of monthly income; or– Welfare rent in as-paid states

• Therefore, exempting minimum rent does not result in family’s TTP being equal to zero


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PHA Procedures

• PHA must revise procedures to carry out minimum rent provisions

• PHA must notify families– of right to request hardship exemption– hardship exemptions are subject to

PHAs informal hearing procedures


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Rent Calculation


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Calculation of Tenant Rent (PH Only)

• To calculate Tenant Rent, subtract the utility allowance (UA) from TTP


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Calculation of Tenant Rent (PH Only)

• If the UA is greater than the TTP, Tenant Rent is zero and there is a Utility Reimbursement Payment (URP)– The URP is the difference between the

TTP and the Utility Allowance– (Tenant credit on line 10f of 50058)


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Definitions for Income Based Rent (PH Only)

• Tenant Rent – amount payable by the family as rent to the PHA

• Utility Reimbursement – amount by which utility allowance exceeds TTP

• Income Based Rent – rent based upon family income, allowances and deductions


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Flat Rents (PH Only)

• Effective for families admitted or recertified on/after 10/1/99

• PHA must establish a flat rent for each unit

• Flat Rent has no formula based limit on what tenant pays. Utility Allowances are not deducted. Flat Rent = THE RENT


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Flat Rents (PH Only)

• Flat rent is:– based on PHA determination of market

rental value of the unit– designed to not create a disincentive for

families to stay in PH as their income increases


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Monitoring Review


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Ground Rules

• Objective: complete case study• Time: Approximately 1 hour• Work individually• Trainer and trainer aides will assist if needed• Please keep noise volume to a minimum


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Instructions for Part 11. Review PHA file data and complete

Appendix C (Tenant file review worksheets)


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• Resources for case study – Case information begins page 7-25– Verifications (pg 7-37)– Appendix C, Tenant File Review Checklist

Worksheets (pg 7-61)– Cubzide PHA Policies/Schedules (pg 6-5)


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Instructions for Part 21. Review PHA’s HUD 50058 (Handout)

2. Complete Appendix A, Tenant File Review Checklist to record discrepancies


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Answer


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Dwelling Unit/ Utility AllowanceWorksheet

• What did you put for the Total Utility Allowance?


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Adjusted Annual IncomeAnswer


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Total Tenant Payment Answer


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Tenant RentAnswer


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Appendix A: Thinking Points

• Discussion


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Appendix A: Thinking Points

• Are there written standards for determining sporadic vs. regular income?

• Do they ensure that pre-earning income (baseline) is based on income of qualifying member only?

• Do they have a system to track exclusion periods? When there are breaks in employment?

May 2003Chapter 6: Intro to Case Studies / Chapter 7: Case Study 1 1 HUD RHIIP Training – PH/HCV...

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