On January 31, 2024, the Department of Housing and Urban Development (HUD) announced updates to the income and asset exclusion criteria in the Federal Register. These changes, crucial for determining household eligibility across HUD housing programs, align with federal statutes to ensure more accurate income determinations.
These exclusions will apply to any housing program that utilizes HUD regulations found in 24 CFR 5.609.
Asset Exclusions:
One notable change is that 17 of the income exclusions were modified to add text that explicitly states that these income sources are also excluded as assets.
The following 27 income exclusions were modified to clarify that the income exclusion is also excluded as an asset.
- Food stamps
- Alaska Native Claims Settlement Act Payments
- Income from Certain Submarginal Land
- LIHEAP Payments
- Grand River Band of Ottawa Indians Income Distributions
- Per Capita Shares from Judgement Funds
- Agent Orange Settlement Funds Payments
- Maine Indian Claims Settlement Act
- Earned Income Tax Credit (EITC)
- Indian Claims Commission Payments
- Vietnam Veteran Children Allowances
- Crime Victim Compensation
- School Lunch and Child Nutrition Act Benefits
- Seneca Nation Settlement Payments
- Cobell Settlement Payments
- Individual Development Account
- Federal Major Disaster or Emergency Assistance
Asset Exclusions Impact
Aligning with HUD’s treatment of federal tax refunds as an excluded asset (Section F.4.e, page 52 of H 2023-10) it would appear that if any of the above excluded assets were deposited into another household asset such as a checking account, then the amounts must be subtracted from the account value that it was deposited in when determining net family assets.
This could impact when inputting income and the asset limitation for Section 8 recipient at initial certification.
Key Changes to Existing Income Exclusions
Six of the existing income exclusions were notably modified to conform to federal statutes governing the exclusions.
Domestic Volunteer Service Act Payments
Payments to volunteers under the Domestic Volunteer Service Act of 1973 (42 U.S.C. 5044(f)(1), 5058); are excluded from income except that the exclusion shall not apply in the case of such payments when the Chief Executive Officer of the Corporation for National and Community Service appointed under 42 U.S.C. 12651c determines that the value of all such payments, adjusted to reflect the number of hours such volunteers are serving, is equivalent to or greater than the minimum wage then in effect under the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) or the minimum wage, under the laws of the State where such volunteers are serving, whichever is the greater (42 U.S.C. 5044(f)(1)). This exclusion also applies to assets;
Prior to the publication of the Federal Register, payments to volunteers under the Domestic Volunteer Service Act of 1973 were excluded without exception. With the Federal Register update, such payments would be included when determining gross household income, if the CEO of the Corporation for National and Community Service determines that the value of all such payments, adjusted to reflect the number of hours such volunteers are serving, is equivalent to or greater than the minimum wage then in effect under the Fair Labor Standards Act or the minimum wage, under the laws of the State where such volunteers are serving, whichever is the greater
The following memo from Americorps dated 12/22/2023 states “To date, payments to participants and volunteers have not equaled or exceeded the greater of the Federal or state minimum wage. Therefore, income and asset disregard rules apply.”
Veterans’ Children Allowances
Any allowance paid to children of Vietnam veterans born with spina bifida (38 U.S.C. 1802–05), children of women Vietnam veterans born with certain birth defects (38 U.S.C. 1811–16), and children of certain Korean and Thailand service veterans born with spina bifida (38 U.S.C. 1821) is excluded from income and assets 38 U.S.C. 1833(c)
Prior to the publication of the Federal Register, the text of this exclusion only covered allowances for children of Vietnam veterans born with Spina Bifida, children of woman Vietnam veterans born with certain birth defects and child of certain Korean Service veterans born with Spina Bifida. This exclusion was updated to add that the exclusions also apply to allowances paid to children of certain Thailand service veterans born with Spina Bifida, to conform with the text 38 USC 1833 which was updated June 25, 2019
Crime Victim Compensation
Any amount of crime victim compensation that provides medical or other assistance (or payment or reimbursement of the cost of such assistance) under the Victims of Crime Act of 1984 received through crime victim assistance program; unless the total amount of assistance that the applicant receives from all such programs is sufficient to fully compensate the applicant for losses suffered as a result of the crime (34 U.S.C. 20102(c)). This exclusion also applies to assets;
Previously, such crime victim compensation was always excluded, however, this exclusion was updated to specify that such amounts may only be excluded if the amount received is not sufficient to fully compensate the applicant for their losses related to the crime. The change to these exclusions was done to confirm with federal statute 34 U.S.C. 20102(c)).
NAHASDA and VA Service-Connected Disability, Death and Indemnity Benefits
Any amounts (i) not actually received by the family, (ii) that would be eligible for exclusion under 42 U.S.C. 1382b(a)(7), and (iii) received for service-connected disability under 38 U.S.C. chapter 11, or dependency and indemnity compensation under 38 U.S.C. chapter 13 (25 U.S.C. 4103(9)(C))as provided by an amendment by the Indian Veterans Housing Opportunity Act of 2010 (Pub. L. 111–269; section 2) to the definition of income applicable to programs under the Native American Housing Assistance and Self-Determination Act (NAHASDA) (25 U.S.C. 4101 et seq.)
This exclusion was updated to include reference to exclusion language under Federal Statutes, Title 42 U.S.C and 38 U.S.C, which specifies that this exclusion applies to amounts not received that are excludable under 42 U.S.C 1382B(a)(7), and amounts received for a service-connected disability under 38 U.S.C Chapter 11.
Individual Development Accounts (IDA) under the Assets for Independence Act
Any amounts in an “individual development account” are excluded from assets and any assistance, benefit, or amounts earned by or provided to the individual development account are excluded from income, as provided by the Assets for Independence Act, as amended in 2002 (Pub. L. 107–110, 42 U.S.C. 604(h)(4));
This exclusion was updated to clarify that an IDA is excluded from assets, and any IDA benefits are also excluded as income. It should be noted that this program was defunded in 2017.
· Note: Federal Register appears to be referring to incorrect Pub. L, Pub. L 107-110 is ‘No Child Left Behind Act of 2001’. Title IV of Public Law 105–285 is the ASSETS FOR INDEPENDENCE ACT.
Indian Tribal Trust Settlement Payments
Per capita payments made from the proceeds of Indian Tribal Trust Settlements listed in IRS Notice 2013–1 and 2013–55 must be excluded from annual income unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe’s private bank account in which the Tribe has deposited the settlement proceeds. Such amounts received in excess of the Tribal Trust Settlement are included in the gross income of the members of the Tribe receiving the per capita payments as described in IRS Notice 2013–1. The first $2,000 of per capita payments are also excluded from assets unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe’s private bank account in which the Tribe has deposited the settlement proceeds (25 U.S.C. 117b(a), 25 U.S.C. 1407);
This exclusion was updated to reflect IRS Notices 2013-1 and 2013-5, to remove the PIH Notice reference, and to adopt the IRS rule which stipulates that if the per capita payments exceed the amount of the original Tribal Trust Settlements and the payments are made from the tribe’s private bank account, the amount that exceed the original settlement amount are included as income.
New Income Exclusions
Tax Refunds
The amount of any refund (or advance payment with respect to a refundable credit) issued under the Internal Revenue Code is excluded from income and assets for a period of 12 months from receipt (26 U.S.C. 6409);
Exclusion updated to reflect the updated statute in 26. USC 6409
· Already excluded for MFH income determinations under 24 CFR 5.609(b)(24)(iv)
ABLE Accounts
Any amount in an Achieving Better Life Experience (ABLE) account, distributions from and certain contributions to an ABLE account established under the ABLE Act of 2014 (Pub. L. 113–295.), as described in Notice PIH 2019–09/H 2019–06 or subsequent or superseding notice is excluded from income and assets;
Exclusion updated to reflect the updated statute in 26. USC 6409
Emergency Rental Assistance Program
Assistance received by a household under the Emergency Rental Assistance Program pursuant to the Consolidated Appropriations Act, 2021 (Pub. L. 116–260, section 501(j)), and the American Rescue Plan Act of 2021 (Pub. L. 117–2, section 3201). This exclusion also applies to assets.
This exclusion was added to conform with Public Law published in 2021. HUD previously issued guidance in August of 2021, stipulating that ERA is excluded when determining household income.
