slide number #1 annie stevenson adjusted income. slide number #2 welcome to lunch n learn! ...
TRANSCRIPT
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Slide Number #1
Annie Stevenson
Adjusted Income
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Slide Number #2
Welcome to Lunch N Learn!
Today’s Topics:• Elderly/disabled allowances• Dependant and child care allowances• Medical and disability allowances• Verification of allowances
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Slide Number #3
Welcome to Lunch N Learn!
Upcoming topics for the occupancy series:• 5/2/08: Verification Issues• 6/12/08: PH Rent Calculation• 6/13/08: HCV Rent Calculation
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Slide Number #4
Adjusted Income - Background
Previous sessions:• Annual Income
InclusionsExclusions Income from assets
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Slide Number #5
Adjusted Income - Background
Formula:• Gross Income
Including asset income• Minus exclusions• Equals annual income
First major building block in rent calculation
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Slide Number #6
Adjusted Income - Introduction
Today’s topic:• ADJUSTED INCOME
Second major building block in rent calculation
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Slide Number #7
Adjusted Income - Introduction
Form HUD-50058 Section 8• Calculation of adjusted income
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Slide Number #8
HUD-50058 Section 8: Expected Income Per Year
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Slide Number #9
HUD-50058 Section 8: Expected Income Per Year
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Slide Number #10
HUD-50058 Section 8: Expected Income Per Year
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Slide Number #11
Definitions
Adjusted Income Elderly Family Disabled Family Dependent Household Vs. Family
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Slide Number #12
Definition of Adjusted Income Total Annual Income minus allowances
• Dependents• Elderly/disabled allowance• Child care• Medical expenses• Disability expenses• Permissible deductions (PH only)
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Slide Number #13
Deductions and Allowances
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Slide Number #14
Dependent Allowance
$480 for each family member:• Under 18• Full-time student 18 or older• Person with a disability 18 or older
Head, spouse, co-head, foster child or foster adult, live-in aide are never a dependent
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Slide Number #15
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
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Slide Number #16
Child Care Allowance
Includes reasonable child care expenses PHA determines what is reasonable Care provided for children under 13 years of
age• including foster children
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Slide Number #17
HUD Interpretation of Child Care Expenses
A PHA may not disallow a deduction for child care expenses because there is an unemployed adult family member who may be available to provide the care.
A PHA may not decide who will provide child care for an applicant’s or a participant’s child(ren).
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Slide Number #18
HUD Interpretation of Child Care Expenses
A PHA may not decide the type of child care available for a participant’s child(ren).
Citation: Verification Guidebook
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Slide Number #19
Child Care Expenses
Care enables a family member to • Work• Actively seek work• Attend school
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Slide Number #20
Child Care Expenses
Costs may be higher in summer and during holidays
Applicant should certify whether any costs are being reimbursed
Child support payments don’t qualify
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Slide Number #21
Child Care Expenses Child care allowance for work cannot exceed
the income that a family member earns• If more than one member working - which
worker enabled by child care? Member works and attends school
• Prorate expense to compare with amount earned
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Slide Number #22
Learning Activity 1
Becky Walker’s annual income is $14,621• All from employment
Becky has three children, all under 13 years of age. She is paying a total of $60 per week for child care while she works
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Slide Number #23
Learning Activity 1 Answers
14,621
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Slide Number #24
Learning Activity 1 Answers
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Slide Number #25
Learning Activity 1 Answers
3,120
4,560
1,440
480
3
10,061
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Slide Number #26
Allowance for Disability Assistance Expense
Anticipated expenses for:• Care attendants• Auxiliary apparatus
Wheelchairs, ramps, vehicle adaptations, special equipment for the blind, etc.
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Slide Number #27
Allowance for Disability Assistance Expense
IF such expenses • Enable a family member (could be person with
the disability) to WORK• Exceed 3% of annual income• Don’t exceed the earnings of person enabled
to work
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Slide Number #28
Disability Assistance Expense
If the disability assistance expense enables more than one person to be employed • PHA must combine the income of those
persons to determine the cap
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Slide Number #29
Allowance for Disability Assistance Expense
Question:• Must a family meet HUD’s definition of a
Disabled Family in order to qualify for Disability Assistance Expenses?
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Slide Number #30
Disability Assistance Expense
Disability assistance expense/child care• If both child care and disability assistance
expense are needed to enable a person in the family to work, the employment income used to justify the
child care allowance may NOT also be used to justify disability assistance allowance
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Slide Number #31
Learning Activity 2
Family Name: Gilmore• Head: 38 Earned Income: $ 11,000• Spouse: 32 Earned Income: $ 9,000• Son: 14 (with a disability)• Disability assistance expense/year $ 4,600
enables spouse to work
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Slide Number #32
Learning Activity 2 Answers
20,000
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Slide Number #33
Learning Activity 2 Answers
600
9,000
0
4,000
4,600 4,000
4,000
4,000
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Slide Number #34
Learning Activity 2 Answers
1
4,480
480
480
15,520
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Slide Number #35
Medical Expenses
Permitted ONLY for family where head, spouse or co-head is at least 62 or disabled
If family eligible, medical expenses deducted for all family members
Anticipate expenses to be incurred during 12 months following certification
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Slide Number #36
Example
• Head disabled 50 years old• Son 16• Daughter 12• Daughter 1• Live-in attendant
Whose anticipated medical expenses qualify?
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Slide Number #37
Allowable Medical Expenses
PHA policy determines allowable medical expenses• PHAs may use IRS Publication 502 as a tool • Available at www.irs.gov
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Slide Number #38
Typical Allowable Medical Expenses
Professional services Services of health care facilities Prescription/nonprescription medicines Medical insurance premiums/co-payments
(includes Medicare premiums)
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Slide Number #39
Typical Allowable Medical Expenses
Live-in or periodic medical assistance • Nursing services• Costs for assistive animal and its care
Long term care insurance premiums
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Slide Number #40
Typical Allowable Medical Expenses
Transportation for treatment Dental expenses Eyeglasses, hearing aids Monthly payment on accumulated medical
bills
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Slide Number #41
Medicare Prescription Drug Discounts and Assistance
PIH 2005-37• Transitional assistance ended in May 2006• Under MMA’s permanent plan, deduction is based
on actual anticipated unreimbursed prescription costs
• Include Medicare prescription drug plan premium, if paid by familySee chart at end of notice
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Slide Number #42
Medical Allowance
Medical allowance• portion of anticipated medical expenses that
exceed 3% of Annual Income
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Slide Number #43
Learning Activity 3
Family Name: Alden Head: 81 Spouse: 80 Annual Income: $13,500
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Slide Number #44
Learning Activity 3
Anticipated medical expenses:• Health Insurance premium- $55 monthly• Eyeglasses $300 annually, each• Doctor visits 4 times a year at $20 each visit• Anticipated yearly prescription costs of $425• Balance Due on a medical bill of $325
(Will be paying it off at $15 a month)
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Slide Number #45
Learning Activity 3
Anticipated medical expenses:• Health Insurance premium - $55 monthly
$55 x 12 = $660• Eyeglasses $300 annually, each
$300 x 2 = $600• Doctor visits 4 times a year at $20 each visit
$20 x 4 = $80
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Slide Number #46
Learning Activity 3
Anticipated medical expenses:• Anticipated yearly prescription costs of $425
$425 x 1 = $425• Balance Due on a medical bill of $325
(Will be paying it off at $15 a month)• $15 x 12 = $180
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Slide Number #47
Learning Activity 3 Total anticipated medical expenses:
• Health Insurance premium - $ 660• Eyeglasses - $ 600• Doctor visits - $ 80• Prescriptions - $ 425• Medical bill - $ 180
TOTAL $1945
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Slide Number #48
Learning Activity 3 Answers
13,500
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Slide Number #49
Learning Activity 3 Answers
405
1,945
1,540
1,945
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Slide Number #50
Learning Activity 3 Answers
400
11,560
1,940
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Slide Number #51
Disability Assistance/Medical Expense
Some families are eligible for both Because disability expense is capped by
amount earned by the person enabled to work, the disability assistance allowance is calculated before the medical allowance
HUD-50058 walks you through calculation
2-104
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Slide Number #52
Disability Assistance/Medical Expense
If disability assistance expense is equal to or more than 3% of annual income• deduct 3% from disability assistance expense• compare to earnings made possible by
assistance• add total medical expenses
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Slide Number #53
Disability/Medical
Disability Expense $2,000- 3% of Annual Income - 500“Proposed” Expense $1,500Amount Earned $1,000Allowable Disability Expense $1,000• All Medical Expense is added $ 300• Total Deduction $1,300
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Slide Number #54
Disability Assistance/Medical Expense
If disability assistance expense is less than 3% of annual income• Total disability expense is added to the
medical expenses• 3% threshold is subtracted from the total
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Slide Number #55
Disability/Medical• Disability Expense $ 400• 3% of Annual Income $ 500• Amount Earned $ 1,000Disability Expense $ 400
Plus Medical Expense $ 900Total of Both Expenses $ 1,300
Less 3% of Annual Income - 500• Allowable for Both $ 800
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Slide Number #56
Permissible Deductions:Public Housing Only
PHA may adopt additional deductions• Must have written policy in ACOP• The amounts may not already be deducted
from annual income
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Slide Number #57
Permissible Deductions:Public Housing Only
Two kinds of permissible deductions:• Based on need
Example: medical deduction for families that do not meet elderly/disabled definition
• Self-sufficiency incentivesExample: Deduction for second wage earner
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Slide Number #58
Permissible Deductions:Public Housing Only
PHA must be able to “afford” deductions• No increase in operating subsidy• PHA should estimate cost of deduction before implementing• Must track actual rents AND rents that would have been paid
without permissible deductions
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Slide Number #59
Permissible Deductions:Public Housing Only
Examples of permissible deductions may include:• Excessive travel expenses not to exceed $25 per
family per week for travel related to employment, education or training
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Slide Number #60
Permissible Deductions:Public Housing Only
Examples of permissible deductions may include:• An amount of a family’s earned income, based on any of the
following:All the earned income of the familyThe amount earned by particular family members
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Slide Number #61
Permissible Deductions:Public Housing Only
An amount of a family’s earned income, based on any of the following:
The amount earned by families having certain characteristicsThe amount earned by families, which could include payroll
deductions such as social security taxes, income taxes, and medical insurance premiums
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Slide Number #62
Verifying Income Deductions
HUD’s 2001 QC report found that 22% of assisted families paid too much rent
Generally, these families did not receive allowances & deductions to which they were entitled
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Slide Number #63
Verifying Income Deductions
HUD’s verification guidebook addresses verification of deductions & allowances• Q & As on verification requirements for each
deduction• Notice PIH 2004-1
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Slide Number #64
Verifying Income Deductions
Generally, PHAs should review tenant-provided documents when 3rd-party verification is not available• Review “with scrutiny” so that expenses are
not counted twice and to ensure that ineligible expenses are not counted
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Slide Number #65
NMA Lunch ‘n’ Learn Seminar
NEXT TOPIC…
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Slide Number #66
NMA Lunch ‘n’ Learn Seminar