Verifying the Deduction for Dependents

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Verifying the Deduction for Dependents

• Dependent is a member of the family other than the family head or spouse (except foster children and foster adults), who is any of the following:– Under 18 years of age; or– A person with a disability; or– A full-time student who is 18 years of age or older

• The mandatory deduction for each dependent in a family is $480.

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Verifying the Deduction for Dependents

• Dependent status may be verified with a birth certificate and Social Security card showing:– Name– Sex– SSN– Date of birth– Relationship to head

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Verifying the Status of Full-Time Students

• A full-time student is defined as a person who is attending school or vocational training on a full-time basis.

• Earnings in excess of $480 for a full-time student 18 years of age or older – excluding the head or household and spouse – are excluded from annual income.

• To obtain third-party verification of the status of a full-time student, a PHA must send a verification form to the institution the student is attending

• The institution defines what full-time means for its student population.

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• Options for verifying full-time student status include:– Current enrollment status letter showing:

• School name and address• Dates of enrollment• Total number of classes or credits attempted in a

given quarter/semester– Current school transcript– Most recent grade report

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• Example of Student Status Verification– Review chart

– Note answer to question: upon effective verification, which family members in the above chart are entitled to the $480 dependent deduction and why?

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Verifying the Deduction for Disabled Families

• A disabled family is defined as a family whose head, spouse or sole member is a person with disabilities (defined in regulation).

• The mandatory deduction for a disabled family is $400.

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• The deduction for a disabled family that is receiving disability benefits from the SSA may be verified:– Through HUD’s TASS– Through the SSA by phone with family

member on the line; or– By viewing an original SSA notice provided by

disabled family member is third-party is not available

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• The deduction for a disabled family that is NOT receiving disability payments may be verified in writing by a third party who is a qualified professional with knowledge of the person’s disability status– The professional may, but does not have to

be, a doctor.– The verification form must state the regulatory

requirements for qualifying as a person with disabilities.

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Verifying the Deduction for Elderly Families

• An elderly family is defined as a family whose head, spouse or sole member is a person who is at least 62 years of age.

• The mandatory deduction for an elderly family is $400.

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Verifying the Deduction for Elderly Families

• The documents that a PHA needs to verify the deduction of an elderly family are the same documents that it would normally collect when admitting a family to the program (i.e. birth certificates and Social Security cards of all family members.)– Documents used to verify the name, sex, SSN, date

of birth and relationship to the head.

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Verifying the Deduction forChild Care Expenses

• Child care expenses are defined 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 if the care is necessary to enable a family member to:

• Actively seek employment• Be gainfully employed (can’t exceed amount of

employment income that is included in annual income.)

• Further his/her education

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• Child care expenses are deductible only to the extent that they:

– Are not reimbursed– Reflect reasonable charges for childcare

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• Third-party options for verifying that an individual is “actively seeking work” include:– Evidence that the individual is fulfilling

welfare-to-work requirements or the requirements for receiving unemployment compensation

– Written or oral third party verification from a local or state government agency that oversees work-related activities

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• What if 3rd party verification is impossible?– PHA may verify that a family member is

“actively seeking work” by one or both of the following methods:

• Reviewing family-supplied documents• Obtaining a notarized statement from the family

member attesting to his or her efforts to find employment

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• Learning Activity 4-5– Read the scenario– Answer the question

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• Child Care Example– Review the scenario in the first paragraph

– Go through the questions to determine if the Williams family is eligible for the deduction.

– If so, the PHA should obtain third-party verification of the child care expenses.

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Verifying the Deduction forMedical Expenses

• Disabled families and elderly families are entitled to a deduction for unreimbursed medical expenses.

• Medical expenses are defined as medical expenses, including medical insurance premiums, that are anticipated during the period for which annual income is computer and that are not covered by insurance or otherwise reimbursed.

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• If a family qualifies for the medical expense deduction, the medical expenses of all family members are eligible for the deduction.

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• Example:• Head 52 disabled• Daughter 16• Grandmother 80• Son 21

• Who in the family is eligible for medical expenses?– The entire family

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• The allowable medical expense is that portion that exceeds 3% of annual income.

• Total Medical $900• Less 3% of annual income 500• Allowable medical deduction $400

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• The PHA should review all medical expense documents provided by the family very closely to ensure that the PHA is accurately anticipating regular, ongoing and anticipated expenses during the year.

• Medical bills from previous years paid in full during the current year should not be included – no matter how recent.

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• Example:– 10/1/02 reexam conducted on 6/10/02– Ms. Harris reported she was paying $50/month on a

past-due medical bill of $800– Bill was to be paid in full 10/1/03

– 10/1/03 reexam conducted on 6/23/03– Ms. Harris submitted cancelled checks verifying

payment on same bill & wanted deduction• Would you give her the deduction for medical?

– No, because they won’t continue beyond the recert effective date.

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• The PHA may use IRS Publication 502 (references section) as guidance in defining medical care and determining what to allow as a medical expense.

• The PHA must adopt written policies that define or identify allowable medical expenses.

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• Privacy laws are making it more difficult to verify medical expenses.

• If a health care provider does not respond to a PHA’s request for verification of a medical expense, the PHA may review tenant-provided documents.

• The PHA should examine the documents carefully to ensure: – Expenses not counted twice– Ineligible expenses not counted

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Verifying Social Security Numbers

• All family members at least 6 years of age who have SSNs are required to:– Disclose their SSN– Provide documentation verifying their SSN.

• If family member hasn’t been assigned SSN, family member (or guardian if under 18) must execute a certification stating SSN not issued.

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• A valid SSN card issued by the SSA serves as verification of an individual’s SSN.

• PHA may adopt written policies allowing any of these documents to be used for verification of the SSN as long as the SSN is shown on the document:– Drivers’ licenses– ID card issued by:

• Federal, state or local agency• Medical insurance company or provider• Employer or trade union

– Earnings statements on payroll stubs . . .

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– Benefit award letters from government agencies

– Retirement benefit letter– Life insurance policies– Court records (real estate, tax notices,

marriage and divorce, judgment or bankruptcy records)

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Verifying Citizenship and Eligible Immigration Status

• Regulation Reference: 5.508 – Submission of Evidence of Citizenship or Eligible Immigration Status

• Further guidance in “Restrictions on Assistance to Noncitizens Guidebook 7465.7”

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Learning Objective

• Apply HUD requirements and standards for effective verification techniques

Verifying the Deduction for Dependents

Documents

Transcript of Verifying the Deduction for Dependents