HOMEfires - Vol. 5 No. 3, July, 2003

Q: What is the impact of the regulations amending the calculation of annual income and adjusted income for disabled families and for families with members who are persons with disabilities on income and rent calculations for the HOME Program?

A: HUD published a final rule on March 29, 2000, effective April 28, 2000, that revised the admissions and occupancy requirements for the Public Housing and Section 8 programs. The amendments included revisions to the regulations in 24 CFR Part 5, Subpart F covering annual income and adjusted income. Because the HOME regulations permit the use of the Section 8 calculation of annual income and require the use of this regulation for determining "adjusted income," the changes also covered the HOME program.

On January 19, 2001, HUD published a final rule, effective April 20, 2001, amending 24 CFR Part 5, Subpart F and other regulations to expressly make some of the regulatory changes concerning income for the Public Housing and Section 8 programs applicable to the HOME program and to other HUD programs. The regulatory amendments affect the calculations for both disabled families and for families with one or more members who are persons with disabilities. The term "disabled family" is defined at 24 CFR � 5.403 as a family "whose head, spouse, or sole member is a person with disabilities. It may include two or more persons with disabilities living together, or one or more persons with disabilities living with one or more live-in aides." This regulation also includes a definition of "person with disabilities" which must be used for income calculations. This definition is different from the definition in the HOME program regulation at 24 CFR � 92.2 because the definition in Part 5, Subpart F is based on the definition in section 3 of the United States Housing Act of 1937 and the HOME definition is based on the definition in section 811 of Cranston-Gonzalez National Affordable Housing Act - the Supportive Housing For Persons with Disabilities program.

1. Mandatory Deduction of Amounts for Adjusted Income Determinations, § 5.611: HOME participating jurisdictions (PJs) are required to use the adjusted income of the family to:
   • calculate the maximum HOME subsidy for the family under a HOME-funded tenant-based rental assistance program (§ 92.209(h));
   • to determine the Low HOME Rent if the rent is based on 30 percent of the family's adjusted income (§ 92.252(b)(2)); and
   • to determine the rent for the family residing in a HOME unit if the family's income increases so that the family is no longer low-income and the rent is increased to 30 percent of the family's adjusted income (§ 92.252(i)(2)).

   Under § 5.611 as amended, each PJ is required to deduct the following amounts from annual income when computing adjusted annual income:

   • $480 for each dependent.
   • $400 for any elderly family or disabled family.
   • The sum of the following, to the extent the sum exceeds three percent of annual income:
     • Unreimbursed medical expenses of any elderly family or disabled family; and
     • 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 person 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.
   • Any reasonable child care expenses necessary to enable a member of the family to be employed or to further his or her education.

   Note that the revision to this regulation clarified the unreimbursed medical expenses and the unreimbursed attendant care and auxiliary apparatus expenses are added together and the amount exceeding three percent of annual income is deducted from annual income.

   These mandatory amounts must be deducted from annual income to determine adjusted income irrespective of the definition of annual income used by the participating jurisdiction (§ 92.203(b)).

2. Self-Sufficiency Incentives for Persons with Disabilities—Disallowance of Increase in Annual Income, § 5.617: This regulation requires PJs to disallow, i.e., exclude from annual income, certain increases in income of a disabled member of qualified families residing in HOME-assisted housing or receiving HOME tenant-based rental assistance in order to further the economic self-sufficiency of the family. 24 CFR § 5.617(a) defines a "qualified family" as

   "A disabled family residing in housing assisted under one of the programs listed in paragraph (a) of this section [HOME, HOPWA, Supportive Housing Program, and Housing Choice Voucher programs] or receiving tenant-based rental assistance under one of the programs listed in paragraph (a) of this section:

   1. Whose annual income increases as a result of employment of a family member who is a person with disabilities and who was previously unemployed for one or more years prior to employment;
   2. Whose annual income increases as a result of increased earnings by a family member who is a person with disabilities during participation in any economic self-sufficiency or other job training program; or
   3. Whose annual income increases, as a result of new employment or increased earnings of a family member who is a person with disabilities, during or within six months after receiving assistance, benefits or services under any state program for temporary assistance for needy families funded under Part A of Title IV of the Social Security Act, as determined by the responsible entity [PJ] in consultation with the local agencies administering Temporary Assistance for Need Families (TANF) and Welfare-to-Work (WTW) programs. The TANF program is not limited to monthly income maintenance, but also includes such benefits and services as one-time payments, wage subsidies and transportation assistance-provided that the total amount over a six-month period is at least $500."

These exclusions from annual income are of limited duration under § 5.617(c). The full amount of increase to a qualified family's annual income is excluded for the cumulative twelve-month period beginning on the date the disabled family member is first employed or the family first experiences an increase in annual income attributable to employment, as specified under § 5.617(b). During the second cumulative twelve-month period, the PJ is required to exclude from annual income fifty percent of any increase in income. The disallowance of increased income of an individual family member who is a person with disabilities is limited to a lifetime 48-month period.

These exclusions pertain only to the annual re-examination of income, and not to the initial determination of a family's annual income. The HOME regulations were amended to require PJs to disallow this income. A new paragraph, (d)(3), has been added to the HOME regulations at § 92.203 that provides: "The participating jurisdiction must follow the requirements of § 5.617 when making subsequent income determinations of persons with disabilities who are tenants in HOME-assisted rental housing or who receive tenant-based rental assistance."

You may obtain additional information about the HOME program from the HOME program web page.