HOW ANNUAL INCOME IS DETERMINED
WHAT KIND OF INCOME SHOULD I REPORT TO THE HOUSING AUTHORITY:
- First, you MUST report ALL income that anyone in your family receives, and ALL assets that anyone in your family has.
- The Housing Authority reviews the information and requires you to provide documentation to verify all of your income and assets.
- Some types of income or assets may not be included in your rent calculation, but you are still required to report them.
You are required to report all income to us, even if you think we already know about it, or even if you think it “doesn’t count” for our programs. This includes, but is not limited to:
- Wages, salary, and tips
- Welfare, Social Security, and other benefits, even if the benefits are intended for a child.
- Child support, alimony, and other support from friends or family, including someone who pays bills, buys groceries, or provides other non-cash assistance
- Financial aid and student loans
- Self-employment income and work for cash, including side jobs like yard care, child care, selling merchandise at the flea market, etc.
- Workers compensation, unemployment, disability payments, etc.
WHAT KIND OF ASSETS SHOULD I REPORT?
You must report all assets owned by anyone in your family to the Housing Authority.
Generally, the value of the asset does not count as income. Only the income (such as interest) produced by the asset will count. If the asset does not produce any income, like money in a non-interest bearing checking account, the Housing Authority will use an assumed interest rate to estimate income.
Assets you must report include, but are not limited to:
- Bank accounts
- Pension and retirement accounts
- Real estate and other property
- Trusts, including special needs trusts
- Settlements, inheritance, and other lump sum cash awards
- Ownership in a business or partnership
HOW WILL YOU VERIFY THE INCOME I REPORT?
We will require that you provide documentation of all of your income and assets. Most documentation must be in the form of original documents, so make photo copies to keep for your records. Required documents include pay stubs, bank statements, benefits letters, tax returns, etc. You will be given a specific list of the type of documents needed.
We will also obtain direct verification from an online database maintained by HUD, called EIV. This database includes income and benefit information about you and your household. We will use the database to confirm the information you have provided to us. For more information about EIV, see the brochure called “What You Should Know About EIV” available at the Housing Authority office and website.
Finally, if we still need more information we may contact an employer, bank, agency, etc. directly and ask them to fill out a form verifying your income or assets and return that form directly to us.
HOW DO I DOCUMENT SELF-EMPLOYMENT OR CASH INCOME?
If you are self-employed, work for cash, or receive money or other support from friends or family, you must still document this income. Visit the Client Forms page to download the Statement of Recorded Business Income and Expenses listed under “Self-Employment/ Business Income”
- If you have received income from self-employment for over a year, provide the Schedule C from your tax filings and an income and expense statement or use our Self-Employment Verification Form.
- Keep a written log of cash received, including dates, amounts, and who provided the cash.
- Show bank statements that document that cash was deposited.
- Keep records throughout the entire year, and be prepared to provide this information to the Housing Authority annually.
- Provide names and contact information for the persons who provided the income to you. We may contact them directly for verification.
WHAT HAPPENS IF SOMEONE IN MY FAMILY FAILS TO REPORT THEIR INCOME OR ASSETS?
The head of household is responsible for making sure that everyone in the family fully reports their income and assets.
Failure to report this information, as well as any changes, can result in your family being required to repay subsidy, and/or being terminated from the program, among other penalties. See the Program Fraud Q&A for more information.
HOW OFTEN IS INCOME RECERTIFIED AND HOW TO REPORT AN INTERIM CHANGE?
The statute governing tenant income eligibility states that family income must be reviewed upon selection for assistance and at least annually thereafter. HUD regulations require annual recertification of tenant income and rent and give guidance regarding interim recertification (changes to income/ family composition that happen outside of the annual recertification period.
If a family experiences a change in income or family composition, mid-year or outside of their scheduled annual recertification, the family must report it by completing the Interim Change Form available of the client forms page. Verification of the income change must be attached to the Interim Change form. If the family is requesting to add a household member, the person is not permitted to move into the unit until the additional member is approved by the Housing Authority.
HOW IS MY RENT AMOUNT DETERMINED?
Families receiving HUD rental assistance are required to contribute toward their rent. The subsidy the family receives then generally makes up the difference between the tenant contribution toward rent and the actual cost of the housing (rent and utilities). Families’ contributions are statutorily set as the greatest of
- 30% of a family’s monthly adjusted income,
- $50 Minimum Rent
If a family participating in the Section 8 HCV program chooses to live in a unit for which their minimum tenant contribution plus their allowable subsidy are not sufficient to fully cover the rent, the family may choose to pay the difference, as long as their total contribution does not exceed 40% of their income in the first year (although the family may choose to pay more than 40% in subsequent years).
An easy way to estimate the family portion of the rent is to add the gross amount of all income sources. Once you find the monthly gross income, multiply that number by .3
The family portion of the rent will be lower than that number if the family is responsible for utilities, and can be higher than that number if the family is living in a unit that is larger than their voucher size.
WHEN WILL MY RENT CHANGE?
Annual Recertifications take place annually. The recertification appointment takes place about 4 months prior to the effective date of the rent change to allow for collection of third party verification and notice. Notice of the rent amounts will be mailed at least 30 days prior to the effective date unless the tenant caused the delays to processing (did not provide required verification). The tenant is required to report all change in income and family composition between the date of the Annual Recertification Meeting and the effective date of the Annual Recertification.
Interim Recertification takes place when there is a change to the family income/ family composition that requires a rent change in a month other than the effective date of the Annual Recertification. In the case of decreases in income, which generally cause a decrease to the family portion of the rent, the family must provide the completed Report of Interim Change as well as all verification 2 weeks prior to the end of the month in order to have the change be effective on the 1st of the following month.
Rent Adjustments notices issued by the landlord must be given 60 days prior to the effective date of the requested change. Please forward any notices issued by your landlord to the Housing Authority. If the Rent Adjustment is approved by the Housing Authority and the change causes an increase to the family portion of the rent, the family will be given at least 30 days notice. Only families living in a unit that is larger than their voucher size will see increases to the family portion of the rent caused by approved Rent Adjustments—Rent Reasonabless examinations compare units of the same size, the family is responsible for amounts of contract rent which exceed the families Payment Standard.
WHAT ARE UTILITY ALLOWANCES?
In cases where utility costs (e.g., natural gas, electricity, other heat sources, water, sewer, and garbage) are not included in rent—meaning utilities are tenant-paid—tenants are provided with a utility allowance. A utility allowance is meant to cover the approximate cost of tenant-paid utilities, based on a utility allowance schedule developed by the PHA. Utility allowances are deducted from a tenant’s monthly rental contribution, or, in the case where a utility allowance exceeds a tenant’s monthly rental contribution, a utility reimbursement is paid to the tenant.