April/May, 2001 Housing Highlights Newsletter

Newsletter of the Housing Unit
Neighborhood Legal Services, Inc.
295 Main Street, Ste. 495 · Buffalo, New York 14203 · (716) 847-0650
(716) 847-0227 FAX · (716) 847-1322 TDD · e-mail: nls@nls.org · Web Page: http://www.nls.org
Volume 3 Issue 3 April/May 2001
Copyright 2001, Neighborhood Legal Services, Inc.

The first step in determining the amount of rent a tenant has to pay is figuring out the tenant’s annual income. Annual income includes all amounts the household receives. There are specific amounts that the law excludes, meaning that they do not count toward annual income. These amounts may include income from job training programs, resident service stipends (received for performing a service at the public housing agency, if less than $200), income from children under age 18 (unless they are the head of household or the spouse), certain lump sum payments, including insurance payments under worker’s compensation, and amounts received specifically for medical expenses.

One particularly important exclusion applies to certain families who have had an increase in annual income because an adult family member has become employed. A family is eligible for this exclusion if the employed member had previously been unemployed for at least one year. This includes anyone who has been working for less than $51.50 per week for the past 50 weeks. A family can also be eligible if the employed family member has increased earnings while participating in an economic self-sufficiency or job training program. Families whose employed member has a new job or increased earnings and has received at least $500 in assistance from TANF (Temporary Assistance for Needy Families) in the last 6 months can also claim this exclusion.

To determine the amount of the exclusion, the prior income has to be compared with the new income. The difference is excluded for the first 12 months of employment. For example, if a family received $4,000 in public assistance last year, and $6,000 in income from employment this year, the difference between the two amounts ($2,000) would not be counted toward annual income. After the first 12 months, 50% of the difference continues to be excluded for an additional year. The twelve month exclusions are counted only when the family member is working.

If a family member works from January 2000 to June 2000 and then is unemployed until January 2001, 6 months of the full exclusion would be used up during January to June, but would still have 6 months left. The time limits on the exclusions can start and stop. Tenant families have 48 months total in which to use them before they are lost.

The Public Housing Authority (PHA) will also look at a tenant’s adjusted income, which is calculated by deducting certain amounts from the annual income. For example, $480 can be subtracted for each dependent in the tenant’s family. Likewise, $400 is deducted for each family that has an elderly or disabled member. A tenant can also subtract reasonable child care expenses that allow a family member to go to work or school. Finally, a tenant may deduct un-reimbursed medical expenses for an elderly or disabled family member if the expenses are more than 3% of the annual income or if the expenses help the family member go to work.

In situations where the annual income cannot be accurately determined (e.g. someone may have steady work landscaping during the summer but may not know if they will find a job in the winter), the PHA can calculate income using a shorter period of time. (In the example above, the PHA may calculate the appropriate rent until the end of summer, and then schedule another re-examination to determine income for the winter).

Once the tenant family’s annual income is determined, the total tenant payment (TTP) can be calculated. The tenant will pay either 10% of their monthly income, 30% of their adjusted monthly income, or their welfare shelter allowance. Families with very little income, or with income that is largely excluded, may end up paying the minimum rent set by the PHA. This amount can range from $0-$50.

Each year, the PHA must give families the choice of paying either the income-based rent (described above) or a flat rent. The amount of the flat rent is based on the actual market value, or put another way, what a private owner would charge for rent if the unit wasn’t subsidized. Flat rents benefit families with increasing income who would otherwise face constantly increasing rent. Income for families choosing a flat rent can be re-certified as infrequently as once every three years (family composition and unit size will still be examined annually). If a family does choose the flat rent and then finds that they cannot pay that much, the PHA can switch the family to an income-based rent. This can be done in the event of a hardship, such as a reduction in employment, a death in the family, a loss in earnings or assistance, or an increase in expenses for medical costs, child care, transportation or education. However, once a family is switched to the income-based rent, the family must remain on income-based until their next re-certification.

It can be a challenging process to figure out exactly how to calculate rent in public housing. Keep in mind that all amounts coming in count toward annual income unless they are specifically excluded by law and that annual income can be adjusted by making the deductions described earlier. A tenant can choose to pay the flat rent for a unit, if not the tenant share will be the largest of either 10% of the total monthly income, 30% of the adjusted monthly income, the amount of the welfare shelter allowance, or the minimum rent set by the PHA.