EARNED INCOME DISREGARD (EID) PACKET
FOR PUBLIC HOUSING VOUCHER PROGRAM
AND OTHER HUD HOUSING PROGRAMS
(EID Law Enacted October 28, 1998)
Packet Created: 07-18-02; Revised: 01-12-05

Outline of the EID Information Packet

I. Background and Description of the Earned Income Disallowance

A. Description of the EID

(1) What is the EID?
(2) To Which Programs is the Earned Income Disallowance Applicable?
(3) What Income Is Disregarded?
(4) For How Long is that Income Disregarded?
(5) Who Qualifies for the EID?
(6) Can a Household Qualify for the Current EID After Receiving the Pre-1999 EID?
(7) What are Individual Savings Accounts?
(8) Can PHAs Adopt Additional Optional Earned Income Disallowances?

II. EID Litigation and Negotiation

A. Litigation

(1) Watts v. Columbus Metropolitan Housing Authority
(2) Phillips v. Philadelphia Housing Authority, et. al., Civ. No. 00-4275 (E.D. Pa. August 21, 2000).
(3) Sample EID Petitions from Travis County, Texas District Court.

B. Negotiation

(1) Washington, D.C. ($4 million)
(2) Cincinnati, Ohio
(3) Nashville, Tennessee ($800,000) Sample Demand Letter

C. Other Materials

(1) EID Tenant Fact Sheet
(2) Pamphlets Explaining the EID
(3) Poster advertising the EID
(4) Sample Intake Questions for Screening for Eligibility for EID

III. Admission and Occupancy Final Rule FAQ, II.C. Mandatory Earned Income Disregard from Annual Income

IV. Statutes and Regulations

V. Articles

This packet contains detailed information regarding the earned income disallowance (EID) including information released by HUD, links to articles, statutes, and regulations relevant to understanding the EID.

Part I. Background and Description of the Earned Income Disallowance

A. Description of the Earned Income Disallowance (EID)

(1) What is the EID?

Quality Housing and Work Responsibility Act of 1998 (QHWRA) amended provisions of 42 U.S.C. § 1437a to include a new version of the earned income disallowance (EID)./1/ Like the original earned income disallowance, enacted in 1990, the purpose of the amended disallowance was to support tenants’ efforts to obtain self-sufficiency and remove any disincentive for public housing tenants to seek employment by temporarily exempting portions of new earned income from their rent calculations. Without an EID, tenants' rents would rise as they become employed, which some argue provides a disincentive for tenants to improve their own economic well-being. The legislation is in effect for public housing tenants and disabled participants in certain other HUD assisted programs.

Despite Congress’ effort to clarify and HUD's more recent attempts to publish regulations on the matter, the earned income disallowance has become a constant source of confusion for tenants, their advocates and Public Housing Authorities (PHAs) and owners of selected other federally funded housing. This confusion has led to improper - or complete lack of - implementation. Many tenants are simply unaware of the benefits available to them. In some instances, tenants are evicted for not paying rent that was set too high because of the failure to implement the earned income disallowance. Tenants have responded to this confusion with litigation and/or negotiation efforts for the purpose of implementing the EID.

(2) To Which Housing Programs is the Earned Income Disallowance Applicable?

The EID is available for all public housing residents./2/ It is also available for certain disabled individuals living in HUD funded housing./3/ The earned income disallowance for disabled individuals is only applicable to those participants in the HOME Investment Partnerships Program,/4/ the Housing Opportunities for Persons with AIDS program (HOPWA),/5/ the Supportive Housing Program,/6/ and the Housing Choice Voucher Program./7/ Owners of this housing including PHAs which calculate tenant income for purposes of establishing rent or tenant payment must implement the EID. While the authorizing statute is broader and makes the EID applicable to both public housing tenants and Section 8 recipients, the provision for Section 8 recipients/8/ was made subject to appropriations, which have yet to be made available./9/

(3) What Income is Disregarded?

The EID statute and/or regulations mandate that PHAs and owners of selected federally funded housing disregard from a qualified household's income for purposes of rent calculation any increase in income if:

• the increased income is due to employment of a family member
  who has been previously unemployed; /10/
• the family member’s income increases while receiving or within
  6 months of receiving welfare;/11/ or
• a family member’s income increases during his or her participation
  in a self-sufficiency or job training program./12/

  (4) For How Long is the Income Disregarded?

The mandatory EID provisions of the statute/13/ and regulations/14/ require public housing authorities (PHAs) and other owners of selected federally funded housing to exclude 100 percent of a family’s increased income from earnings for an initial period of 12 months and 50 percent of the increased earned income for an additional 12 month period./15/ A tenant is eligible to receive the EID during a lifetime 48-month period from the time that the EID is first applied for the affected tenant. The time begins to run the date the PHA would have otherwise raised the tenant's rent in response to a reported income increase./16/ For example, if a previously unemployed family member becomes employed and fails to report his income change for 6 months after his PHA's requested date of notification, the household would still have 6 months of the 100 percent EID and a full year of the 50 percent EID remaining for use in the next 42 months (48 month time limit minus the 6 months for the period of non reporting)./17/ Under HUD guidelines, there is no penalty for failing to report an increase in income that would be subject to the 100% disallowance, because any income increase within that period would have been disregarded./18/ If a resident is receiving the EID from one PHA and the family moves to a unit administered by another PHA, the family may continue to receive the EID. In that situation, the family should notify the new PHA that the resident qualified for the EID benefit and that the clock has begun to run./19/ However, the tenant should not be under any obligation, if he or she has not been informed of the rules.

(5) Who Qualifies for the EID?

• A family with previously unemployed household members

A family qualifies for the EID, if the family income increases as a result of the employment of a family member who was previously unemployed for one or more years./20/ There is no other limit on the time that the tenant must have been unemployed prior to gaining work./21/ The definition of previously unemployed includes a person who has earned in the past 12 months no more than the equivalent of 500 hours of work at the greater of the federal or state or local minimum wage./22/ Under federal minimum wage guidelines, this amount is $2,575.00 ($5.15/hour x 500). This amount could be more if the state or local minimum wage is higher.

• A family member of the household who receives or received welfare benefits

A household is entitled to the EID if the family member (who is currently receiving or within six months of receiving welfare benefits) experiences an increase in earned income./23/ The increase in earnings may be due to a new job or an increase in earnings from a current job./24/ The EID is available for tenants whose incomes increase while they are still receiving welfare assistance and for six months after receiving the welfare assistance. To qualify as receiving benefits under Temporary Assistance to Needy Families (TANF), a tenant may have received monthly income maintenance or benefits and services such as one time payments, wage subsidies and transportation assistance provided that the total amount over a six month period is at least $500./25/

The fact that a tenant's welfare income is reduced or terminated due to a work-related sanction does not disqualify the individual from the benefits of the EID if the sanctioned member, subsequently finds work./26/ However, if the tenant's welfare benefits are reduced for fraud or noncompliance with economic self-sufficiency requirements, the "sanctioned" welfare income will continue to be included in the family income for rent-setting purposes./27/ In other words, the tenant will not experience a reduction in rent due to the reduction in welfare benefits precipitated by a sanction for fraud or noncompliance with economic self sufficiency requirements. However, the same family will not be penalized with additional rent increases for responding to the sanction by obtaining work. So, for example, a family’s $500/month TANF benefits are terminated due to failure to cooperate with the work requirements. While still under the sanction, the mother begins employment making $700/month. Although $500/month income is imputed, she is entitled to a disregard of the difference between her earnings and her prior TANF income. Therefore, the additional $200 ($700-500) is disregarded 100% for the first 12 months and 50% for a second 12 months./28/

• A family with members whose income increases during participation in any self-sufficiency program

A household may also qualify for the EID if the household income increases due to increased earnings of a household member during that member's participation in an “economic self-sufficiency program” or other job training program./29/ The definition of an economic self-sufficiency program includes any program designed to assist tenants in gaining their financial independence./30/ This encompasses a large number and a wide variety of programs, including, but not limited to job training, English proficiency classes, and substance abuse and mental health treatment programs./31/ While such training includes enrollment in general vocational courses at a community college or training or activities at a sheltered workshop,/32/ it may also include enrollment in non-vocational programs, “as long as such program is designed in some way to encourage, assist, train or facilitate the economic independence of HUD assisted families or to provide work for such families.”/33/ Advocates are encouraged to get PHAs to interpret the applicability of this provision broadly. It is also important to remember that the increases in earnings to be disregarded may occur after the completion of the primary part of the training program if the individual continues to receive some amount of training, mentoring, counseling or other assistance./34/

(6) Can a Household Qualify for the Current EID After Receiving the Pre-1999 EID?

Yes. A tenant's receipt of the benefits under the former earned income disallowance (EID) does not preclude an eligible tenant from also receiving the EID under the new program that went into effect on October 1, 1999. If a family's rent was based on the former 18 month EID when the new policy went into effect on October 1, 1999, the former disallowance remained in effect until the expiration of the original 18 months./35/ Receipt of the old 18-month EID does not count against the four-year limit imposed by the new EID./36/

(7) What are Individual Savings Accounts?

PHA's are permitted to offer public housing tenants who qualify for the EID the alternative of paying the full rent otherwise due, without the disallowance, and putting the increased rent attributable to the increase in earned income in an individual savings account (ISA)./37/ The regulations provide that amounts deposited in ISAs may be withdrawn only for the purpose of purchasing a home, paying education costs of family members, moving out of public or assisted housing, or paying any other expense authorized by the PHA for the purpose of promoting the economic self-sufficiency of the resident./38/ In the case of a lease breach or if the family moves out of public housing, the housing authority must pay the tenant the balance of the funds including interest but may retain an amount equal to any amount owed to the PHA./39/ Whether a PHA offers an ISA is at its discretion and the decision whether to offer an ISA is one that should be reflected in the PHA annual plan documents./40/ It should be noted that while the regulations provide for such accounts with public housing residents, there is no similar provision for disabled residents in the voucher program, HOME, HOPWA or supportive housing. However, such regulatory void does not preclude housing owners or agencies from establishing such accounts on behalf of residents.

(8) Can PHAs Adopt Additional Earned Income Disallowances?

Yes. PHAs may adopt discretionary EID policies for public housing residents./41/ Such policies must be included in the PHA annual plan./42/ PHAs may be reluctant to adopt discretionary EIDs because the Interim Operating Subsidy rule makes it clear that a PHA will not be reimbursed for any reductions in rent due to such discretionary EID policies./43/ However, there may be other funds available to support a discretionary EID. A PHA may retain 50 percent of any increase in rental income and use such retained rent to fund an optional EID./44/ If the discretionary EID worked as intended, it is possible that the rental income for the PHA may increase, thus creating more money to continue funding the disallowance.

Part II. EID Litigation and Negotiation

The EID program throughout its long and varied history has led to a multitude of misunderstandings by PHAs and residents alike, unnecessary evictions for failed implementation and litigation to enforce the requirements of the mandatory earned income benefit. Yet some PHA's have shown that litigation need not be the only way to solve problems resulting from past mishandling of EID cases. The examples that follow illustrate some notable instances where PHAs and their communities have managed to resolve these problems either through litigation or less costly negotiation.

Litigation

Watts v. Columbus Metropolitan Housing Authority

Ms. Watts, a public housing tenant filed suit against the Columbus Metropolitan Housing Authority (CMHA) after CMHA failed to include the EID in her rent calculation and evicted her when she failed to keep up her rent payments. Ms. Watts’ complaint, which asserted that CMHA was in violation of the National Housing Act, The Family Support Act, HUD regulations and Section 1983, sought an injunction against the PHA and class wide damages. In late 2001 the parties entered into a consent decree. As of June 2003 CMHA had paid out approximately $400,000 in rent credits and refunds to approximately 600 current and former residents. Perhaps an even more important result of the litigation is that CMHA started to use computer-prompted questions in the rent calculation process to help identify families eligible for the EID.

To see the complaint in Watts, click here

To see the Settlement Agreement with Attachments in Watts, click here

Phillips v. Philadelphia Housing Authority, et. al., Civ. No. 00-4275 (E.D. Pa. August 21, 2000)

Plaintiffs filed a complaint based on substantially similar violations to those raised in Watts and added additional causes of action under a third-party beneficiary claim for breach of the Annual Contribution Contract, a claim for violation of the lease, and a Section 1988 claim for attorneys' fees. Plaintiffs asked for declaratory relief, class certification, an injunction, and compensatory and punitive damages. After initial settlement negotiations produced no result, the court certified the class on January 30, 2002, and the case was scheduled to proceed toward trial. The parties have settled and the process of identifying class members and providing compensation has begun.

To see the Class Action Complaint in Phillips, click here.

To see Memorandum and Order of Class Certification, in Phillips click here.

To see Plaintiffs’ First Set of Interrogatories and Second Set of Interrogatories to Philadelphia Housing Authority, in Phillips click here

To see Plaintiffs’ First Request for Production of Documents and Plaintiffs’ Second Request for Production to Philadelphia Housing Authority; in Phillips click here

To see Proposed Settlement Agreement, in Phillips click here

Sample pleading from District Court in Texas

The Texas Rural Legal Aid Society (TRLAS) has been instrumental in obtaining significant relief for public housing residents of that area who have been denied the EID by the City of Austin Housing Authority and other local public housing authorities. In numerous cases filed on behalf of aggrieved residents, TRLAS was able to obtain actual damages incurred by residents, including court costs. These judgments and/or settlements were often for thousands of dollars. As a result of filing these individual complaints, some PHAs changed their policies and began to implement the EID.

To see Cleveland v. Housing Auth. Of Austin, Plaintiff’s Original Petition (current tenant) click here

To see Houston v. Housing Auth. of Austin, Plaintiff’s Original Petition (former tenant) click here

To see Thompson v. Luling Hous. Auth., Settlement Agreement and Release click here

Successful Negotiations

Washington, D.C. ($4 million)

Washington D.C. Housing Authority (DCHA) agreed to temporarily halt all non- payment public housing evictions and conduct employee training on the subject of the EID, after successful negotiations with community tenant advocates. The Legal Aid Society of the District of Columbia, with the help of pro bono counsel, who at first threatened to sue the district for EID related wrongful evictions, helped DCHA develop a program to better implement the EID for the benefit of its tenants. In November 2001, DCHA finally began to implement the EID for residents. As of July, 2003, there were 711 residents receiving an estimated benefit of $4 million in rent relief./45/

Cincinnati, Ohio

Cincinnati, Ohio has also gained results from negotiations and the threat of litigation with the Cincinnati Metropolitan Housing Authority (CMHA). The Legal Aid Society of Greater Cincinnati was able to get CMHA to agree to take a number of steps to improve implementation of the mandatory EID program. It engaged in extensive outreach with large colorful posters about the EID posted around the developments and in CMHA rental offices and its main office. It included a reduced version of the poster in each tenants' monthly rental statement. Additionally, CMHA froze the rent for 62 families while proper application of the EID could be determined./46/

To see a copy of the poster, click here

Nashville, Tennessee ($800,000)

In late 2001, the Legal Aid Society of Mid. Tenn. & the Cumberlands began seeing clients who had failed to receive their earned income disallowance from the Nashville housing authority known as the Metropolitan Development and Housing Agency (MDHA). Upon investigation, the Legal Aid Society determined that MDHA was ill-informed about the EID and when it applies. The Legal Aid Society joined forces with the Tennessee Justice Center (TJC). A joint letter was sent to MDHA in late 2001 requesting a meeting to discuss a resolution to the failure to properly implement. Several months later, MDHA agreed to conduct a review of all current tenant files back to October 1999 to determine proper eligibility for the EID. Legal Aid and the Tennessee Justice Center signed off on the screening form used by MDHA to conduct that retroactive review and were instrumental in establishing the standard for the review. The Legal Aid Society estimates that this review process resulted in over $800,000 in refunds and/or credits being provided to over 500 residents./47/

To see Letter from the Tennessee Justice Center, click here.

Other forms and documents

1. Sample Questions to Identify Qualifications for EID benefits, click here

2. Pamphlet explaining the EID for public housing tenants, click here

3. Pamphlet explaining the EID for disabled voucher participants, click here

4. Fact Sheet for residents regarding EID, click here

5. Posters advertising the EID, click here

Part III. HUD Frequently Asked Questions (FAQs) regarding the Earned Income Disregard

Admission and Occupancy Final Rule FAQ, II.C. Mandatory Earned Income Disregard from Annual Income available at http://www.hud.gov/offices/pih/phr/about/; see also Treatment of Income (24 CFR 5.609)

Q1: Under the mandatory earned income exclusion, what is the definition of "previously unemployed"?
A1: The definition of previously unemployed is found in 960.255(a), and is as follows: "includes a person who has earned, in the twelve months previous to employment, no more than would be received for 10 hours of work per week for 50 weeks at the established minimum wage." The established minimum wage means the federal minimum wage unless there is a higher state or local minimum wage.

Q2: Does the earned income exclusion apply to minors who turn 18?
A2: Yes, the earned income exclusion applies to anyone who meets the criteria outlined in 24 CFR 960.255. The test that must be applied in this case is whether the person meets one of the three qualifying factors and is there is new or increased earned income after the person turns 18. If yes, EID applies. If no, EID does not apply.

EXAMPLE: A 17 year old who has been making $1,500 per year while in high school, graduates and turns 18 years old and begins making $10,000 per year. This person will qualify for EID because he meets the qualifying factor of being previously unemployed and has experienced an increase in earned income.

Another example, a 17 year old (not a fulltime student) is making $12,000 per year, and turns 18 years old and is still making $12,000 per year. This person does not qualify for EID because she does not experience an increase in earned income nor does she meet one of the three qualifying factors.

Q3: At reexamination, if some members of a household have increases in their income, and those household members are not entitled to the disregard, how does this affect the rent at the second twelve month exclusion and phase in period?
A3: Any increases in income of family members who are not eligible for the earned income disregard will be considered in determining the family's rent.

Q4: At a family's last reexamination effective 1/1/2000, the family is receiving welfare assistance. When the family is reexamined for 1/1/2001, a member of the family has earnings after being previously unemployed for twelve months. This change occurred on 6/15/2000, but the family was not required to report it. Now it is being reported for the reexamination effective 1/1/2001. How is the earned income exclusion benefit processed?
A4: By not reporting the increase, the family has received the benefit for the 6 months prior to the reexamination. The family is entitled to 100 percent of the disregard of any incremental increase for the remaining six months. At the end of the six months, the family is then entitled to the 12 month 50% disregard of the incremental increase.

Q5: What should PHAs use as a guide in determining what constitutes a "qualifying" training or economic self sufficiency program?
A5: An "economic self sufficiency" program is defined at 24 CFR 5.603(b) as follows: "Any program designed to encourage, assist, train, or facilitate the economic independence of HUD assisted families or to provide work for such families. These programs include programs for job training, employment counseling, work placement, basic skills training, education, English proficiency, workfare, financial or household management, apprenticeship, and any program necessary to ready a participant for work (including a substance abuse or mental health treatment program), or other work activities."

Q6: Is there a time limit on how long a resident can be unemployed to be eligible for the earned income exclusion?
A6: There is no maximum time limit on how long a resident can be unemployed. However, he/she must have been unemployed for at least the last 12 months, as unemployment is defined in the regulations.

Q7: Can a PHA exclude the income of a former welfare recipient who is now employed with PHDEP or other grant funds?
A7: Yes, provided the resident meets the definition of eligibility for a qualified family at the time the provision became effective.

Q8: An individual who was never previously employed obtains his or her first job, but is still receiving a regular monthly income benefit from welfare. Is this individual entitled to the income disregard?
A8: Yes, the individual is eligible for the earned income disregard based on the following criteria stated in 960.255(a)(iii):

"Whose annual income increases as a result of new employment or increased earnings of a family member, during or within six months after receiving assistance, benefits or services under any state program for Temporary Assistance to Needy Families funded under Part A of title IV of the Social Security Act, as determined by the PHA in consultation with the local agencies administering temporary assistance for needy 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."

Q9: Does the $500 minimum dollar requirement apply only when a family is seeking to qualify for the disregard on the basis of receipt of one time TANF benefits or ancillary benefits such as transportation assistance, (and not to the receipt of monthly TANF income maintenance benefits?
A9: Yes, the minimum $500 requirement applies only to one time benefits, wage subsidies, and transportation. A person receiving regular monthly income maintenance (cash assistance) during or within the six month period since first receiving assistance is eligible for the disallowance even if the amount received is less than $500.

Q10: An individual is working but also receiving TANF benefits. If the individual's income increases, and as a result, the individual loses the TANF benefits, does the individual qualify for the income disallowance?
A10: Yes, the individual is eligible for the income disregard based on an increase in income as a result of new employment within six months of receiving TANF.

Q11: What happens if a family met the requirements for the previous 18 month income disregard and was processed by the PHA and scheduled to go into effect as of October 1, 1999, but the family was not eligible for the new income disregard at the time? Can this family still take advantage of the 18 month income disregard?
A11: If the family met the requirements at the time the previous 18 month disregard policy was in effect, it should be applied to determine the family's rent for the next 18 months.

EXAMPLE: A tenant began work in August 1999 after completion of a training program in June that qualified under PIH 98 2 for the old 18 month disregard. (She was not unemployed for the prior 12 months, nor did any member of the family receive benefits under the state TANF program in the prior 6 months.) She reported her earnings at the end of August and the PHA processed the paperwork for a rent increase beginning October 1, 1999. Since the tenant qualified for the 18 month disregard while it was in effect, she is entitled to receive the benefit of it. Her rent should not be increased due to earnings for 18 months. (Note: Beginning work after completion of a training program qualified a resident for the old 18 month disregard, but would not qualify a resident for the new earned income disregard.)

Q12: What rent policy should be applied if a family who completed a qualifying training program prior to October 1, 1999, did not have increased earnings until after October 1, 1999?
A12: The family's eligibility for the new earned income disregard must be based on one of the three criteria outlined in 960.255. Because the resident "completed" training prior to October 1, 1999, the resident would not be eligible for the new earned income disregard related to participation in a training program, as the increased earnings must occur "during" participation in an economic self sufficiency or other training job. However, the tenant may still be eligible for the earned income disregard based on one of the other two criteria previously unemployed for at least 12 months or receiving TANF within the last six months.

EXAMPLE: A tenant completed a qualifying training program in June, but did not start her new job until October. The tenant did not "qualify" for the 18 month disregard prior to October 1, 1999 because her employments began in October. Therefore, he eligibility for an income disregard is determined by whether she qualifies under the new disregard policy effective October 1, 1999. A 4 month lag between the completion of the training program and the start of employment means the tenant is not qualified for the new disregard based on participation in a training program. The tenant's eligibility depends on whether she had received benefits under a state TANF program in the prior 6 months or had been "unemployed" for the prior 12 month.

Q13: What rent policy applies to a family that is in the midst of receiving the old 18 month income disregard when the new disregard policy goes into effect as of October 1, 1999?
A13: The old 18 month income disregard continues to apply to the family.

EXAMPLES: As of October 1, 1999, a family has been receiving the benefit of the 18 month disregard for 7 months. Instead of applying the new disregard, the PHA should continue to give the family the benefit of the old disregard policy for an additional 11 months.

As of October 1, 1999, the family has been receiving the benefit of the old 18 month disregard for 13 months. Does it matter that the family had been receiving the benefit of the old disregard more than 12 months? No. The family continues to receive the benefit of the 100 percent disregard of any incremental increase in income for the next 5 months.

Q14: What rent policy should be applied if a PHA learns after October 1, 1999 that a tenant increased her income prior to October 1st under circumstances that qualify for the new disregard?
A14: The earned income disregard became effective October 1, 1999. Therefore, the tenant qualifies for the disregard effective October 1, 1999 whether or not income is reported on an interim or annual basis.

Q15: Would the income of a person who received TANF due to pregnancy leave or working for the school system be excluded in the same way as a person who is eligible for an income exclusion if she was receiving TANF within the past 6 months of receiving income?
A15: Yes, a person who experiences increases in income from new employment or increased earnings from existing employment during or within six months of receiving TANF benefits, regardless of the reason for the benefits.

Q16: What rent policy applies if a tenant's income increases under circumstances that would qualify for the new earned income disregard, but fails to report the increased income on an interim basis as required by the PHA?
A16: Even if the tenant fails to report changes in income as required by the PHA, the tenant still receives the benefit of the full earned income disregard as illustrated in the example below.

EXAMPLE: A tenant begins work in October 1999 while receiving TANF benefits (which were later reduced). The PHA's policies require reporting of income changes within 10 days and interim rent changes. The tenant does not report her new job to the PHA until her regular reexamination in February 2000. If timely reporting of the increased income would have led the PHA to begin applying the income disregard as of December, 1999, the tenant should be in the same position as if the income had been reported timely. The 12 months of 100% disregard should count from December 1999, extending through November 2000. Beginning in December 2000, the rent should increase by 50% of what the increase would otherwise have been.

Q17: When does the earned income disallowance go into effect?
A17: The initial 12 month cumulative period begins on the date a member of a qualified household is first employed or first experiences an increase in annual income attributable to employment. However, for tracking and administrative purposes, PHAs can begin EID on the first day of the month following the effective date of employment. Additionally, at the onset of the 50% cumulative exclusion period and throughout, it is advisable for PHAs to conduct interim reexaminations to better ensure accuracy in income and rent determination.

Q18: Does the new disregard apply to a tenant who has income from both TANF and employment, beginning prior to October 1, 1999, but then experiences an increase in earnings from work after October 1, 1999?
A18: The new income disregard applies; tenants whose earnings increase while on TANF are eligible for a disregard of their increased income due to earnings.

See 960.255(a)(iii).

EXAMPLE: A tenant has a 20 hour/week job for which she earns $550 per month (she did not receive the 18 month disregard) and receives $200/month in TANF benefits. Beginning November 1, 1999 the employer increase her hours to 35 per week with a slight pay increase for a total of $1000 per month and she stops receiving the TANF benefits. The new disregard applies to her increase in income due to earnings. Under the regulations, $250/month of the increase in earnings is excluded from her annual income to determine her rent, because that is her increase in income (as opposed to the increase in earnings). The annual income used to determine her rent is 12 times the previous $750/month of income. Her rent would remain what it was in October 1999 (assuming no other changes in income or family composition), because the October and prior rent was based on the previous gross income of $750/month.

Q19: Does a family receive the benefit of the income disregard if the family experiences a increase in earnings within six months of receiving a non cash TANF benefit, such as a $600 payment to an auto shop for repairs to the tenant's car so she could start a new job?
A19: Yes, receipt of at least $500 in TANF benefits is sufficient to trigger the disregard. To verify which benefits are funded under the state's TANF program, contact your state or local welfare office.

Q20: In determining a family's eligibility for the income disregard, must the member of a household who gets a job or increased earnings be the same member of the household who received TANF benefits?
A20: Yes. Only members of a qualified family who are also TANF recipients can receive the disregard based on the qualifying factor related to new employment or an increase in income during or within six months of receipt of TANF.

Q21: EID is considered to be exclusively part of the income based rent formula. As such, what happens when a family who has qualified for (and/or received the disallowance) chooses flat rent? Two scenarios are presented below.
Q21a: A family qualified for EID and had experienced several months of the full exclusion. Then, due to an income increase which is not affected by EID they elect to pay flat rent. Until that time the clock was ticking on their 48 month lifetime disallowance period. Now that they are paying flat rent, is the 48 month period suspended or does it continue?
A21a: The 48 month clock continues. As long as the employment continues, the fact that the family opts to pay a flat rent doesn't stop any clock the 100% exclusion, 50% exclusion, or overall 48 months. The only difference is that the family opted to pay the flat rent over the income based rent (which was calculated taking the exclusion amounts into account).
Q21b: A family has elected to pay flat rent. They have been paying flat rent for several months when a family member experiences an earned income increase which would qualify the family for EID. Would the 48 month period commence even though while on flat rent they are not experiencing the disallowance of income? Or would it begin only if they were paying income based rent? Let's say later they choose to pay income based. Would the 48 month period begin (1) retroactive to when they qualified, (2) at the onset of income based rent, or (3) would they have to wait for another qualifying increase while on income based rent to begin the disallowance?
A21b: If a family is paying the flat rent at the time a family member experiences an event that would qualify them for EID, unless the event happens to coincide with their annual reexamination (and annual choice of rent), the family cannot opt for the income based rent. Therefore, they cannot take advantage of the EID and the 48 month clock does not begin. If the family later chooses to pay income based rent, they would only qualify for the EID if another qualifying event occurred.

Q22: If a person loses welfare income due to a work related sanction, is the person eligible for the income disregard if they obtain employment?
A22: The individual receives the benefit of the disregard when they go to work if the person received TANF benefits within the previous 6 months (including such benefits and services as one time payments, wage subsidies and transportation assistance that total at least $500 over a 6 month period). The purpose of the policy of not reducing a tenant's rent, when the tenant experiences a work related sanction, is to reinforce the welfare agency's incentives for the tenant to obtain employment. If the individual obtains employment, the policy has achieved its intended result.

EXAMPLE: A family's $500/month TANF benefits were terminated in October 1999 due to failure cooperate with work requirements. Under the new imputed welfare income policy, the PHA kept the family's rent at the prior level of $125/month. While the family was still subject to the welfare sanction, in December 1999, the mother got a part time job earning $700/month. Since the mother began employment within 6 months of receiving TANF benefits, she is entitled to the disregard of the difference between her earnings and her prior TANF income or $200/month, in the determination of her annual income for 12 months, and the disregard of $100/month in the subsequent 12 months.

Q23: EID regulations state that the 48 month window of opportunity is a once in lifetime opportunity. If a household qualifies and the PHA opens their window of opportunity and the client moves out before the 48 months ends, do they lose the remainder of their window of opportunity? Or could they resume their unused months if they move to another PHA within the 48 month window of opportunity and again qualify for the EID after they are admitted
A23: Yes. Statutorily, the tenant is entitled to a lifetime limit of 48 months of the earned income exclusion. In this case, it would be the tenant's responsibility to inform the new PHA that the 48 month EID exclusion clock has been started. The PHA will then verify this information with the PHA where EID was previously processed.

Q24: Is a tenant eligible for the income disregard if she obtains a job 2 months after completion of the coursework portion of a vocational school program while she is receiving job search and counseling assistance from the program?
A24: Yes. Because she is still receiving services from the training program, she has started a job during the program and is entitled to the disregard.

Q25: If a PHA does not perform interim reexaminations and increases rents only at the family's annual reexamination, why does EID begin on the first day of the month following the increase in earnings?
A25: According to the regulation, the exclusion actually begins on the date the family is first employed or first experiences an increase in income attributable to employment. However, for administrative and tracking purposes, the PHA can begin the exclusion on the first of the month following the employment or increase in income. Note: If a person who qualifies for EID begins employment or experiences an increase in income and fails to report this change, the PHA will count this time against the family member's exclusion period.

Q26: Does "training" sufficient to trigger the income disregard includes community college when the tenant is not in a special vocational program?
A26: Yes, as long as it meet the definition of economic self sufficiency 5.603(a): "Any program designed to encourage, assist, train, or facilitate the economic independence of HUD assisted families to provide work for such families. These programs for job training, employment counseling, work placement, basic skills training, education, English proficiency, workforce, financial or household management, apprenticeship, and any program necessary to ready a participant for work (including a substance abuse or mental health treatment program), or other work activities."

Q27: How should a PHA treat income earned in a sheltered workshop type setting?
A27: A sheltered workshop could qualify as a training or economic self sufficiency program if it met the definition of an economic self sufficiency program at 24CFR5.603(b). Income earned in this setting therefore could trigger the mandatory disregard.

Q28: Are PHAs required to provide tenants with notice about the new mandatory income disregard policy?
A28: As part of the information given to tenants under the rent choice requirement, the PHA must explain the income disregard policy to the tenant and provide a written notice of the income based rent as calculated by the PHA. The determination of the income based rent must include the proper treatment of income under all applicable disregard policies.

Q29: Can a tenant who is informed he/she has a new job (that would qualify for the disregard) starting in a few weeks choose to pay the rent increase and have the equivalent funds place in an Individual Savings Account (ISA) instead of receiving the disregard?
A29: If the PHA offers a choice between the new optional ISA and the earned income disregard then the tenant has the option to request that the funds that would otherwise be disregarded be placed in the ISA on their behalf.

CFR 24 960.255(d) states "As an alternative to the disallowance of increases in income as a result of employment…a PHA may choose to provide for individual savings accounts for public housing residents who pay an income based rent…"At the option of the family, the PHA must deposit in the ISA the amount that would have been included in tenant rent payable to the PHA as a result of the increased income that is disallowed…"

Q30: If a tenant who qualifies for the earned income disregard based on previous unemployment gets an increase in wages or salary in the 14th month after the disregard began to apply, does her rent increase?
A30: Yes, if the PHA policy calls for interim reporting of increases. The disregard that began when the rent increase from her new employment would have taken effect still applies. However, since it has been more than 12 months since the disregard took effect, the PHA should increase the rent by half the amount of what the new rent increase would have been, based on the change of earnings.

Q31: How many times in a 48 month period can a family qualify for the earned income exclusion?
A31: A family member can only receive a total of 12 months for 100 percent of the incremental increase disregard, and 12 months of the 50 percent disregard in his or her lifetime. The disregard only applies for a maximum of 4 years from the time it is first applied. Refer to 960.255(b)(3).

EXAMPLE: A tenant who qualified for the mandatory disregard based on previous unemployment works for 20 months and then is laid off. She received 12 months of the full disregard and 8 months of the 50 percent disregard. The resident is called back to work in the 30th month following initial employment. The resident is still entitled to the remaining four months of the 50 percent disregard.

Q32: A tenant received TANF benefits of $500 per month from March 1999 August 1999, and at this point the tenant reached the state's TANF time limit and benefits were terminated. The tenant got a job making $600/month for September through November 1999. At the end of November, the person quit that job and during the week before Christmas started a new job paying $1200/month. Is the tenant eligible for the disregard when she reports her new earnings in January 2000?
A32: Yes. The tenant qualifies for the income disregard because the individual received TANF benefits within the 6 month period prior to January 2000. In addition, in the 12 months prior to beginning her new job, she earned on $1,800, which is less that 500 hours at the federal minimum wage (currently $2,575) so she is considered to be "previously unemployed."

Q33: If a tenant who qualified for the disregard gets a job after paying a minimum rent, does her rent remain at the minimum rent level for another 12 months (and then increase to half of what the rent obligation would have been if all her income were considered?
A33: Yes, For example, if a tenant's only income for 12 months prior to getting a job was from child support, she would meet the eligibility for the disregard as "previously unemployed." If the amount of child support was sufficiently low (and remained unchanged) that the family was subject to the PHA's minimum rent of $50 per month, then her rent would remain at that level for 12 months after her job began. In months 13 24 after her employment began, her rent would be based on half her income (earnings plus her child support income).

Q34: If a tenant is eligible for the earned income disregard, can the disregarded amounts be used in determining the cap for the childcare expense deduction?
A34: In the case of childcare necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income; therefore, the disregarded amounts cannot be used in determining the cap for the childcare expense deduction. (See definition of child care expenses at 24 CFR 5.603.)

EXAMPLE: A resident is receiving the benefit of the new earned income disregard. Her salary is $9,000/year, however, only $3,000 of this amount is being included in annual income. The remaining $6,000 is being disregarded. Childcare expenses for her four year old daughter tot $3,640/year. The resident's childcare deduction is capped at $3,000 because this is the amount that is included in annual income.

Q35: Is a public housing tenant who received the first 18 month earned income disregard also entitled to the new earned income disregard?
A35: If a tenant meets the criteria for the new income disregard as outlined in 24 CFR 960.255, a PHA cannot deny a tenant the disregard based on receipt of the earlier 18 month exclusion.

EXAMPLE: Following is an example of an income disallowance used in the Public Housing Reform Act Training:

• Sandy has been unemployed for 25 months.
• Her monthly TANF income is $540.
• Sandy gets a job at the Chrysler plant, making $1,100 per month on 6/15/2000, and reports her employment immediately.
• Sandy qualifies for a 12 month income disallowance of $560($1,100 $540).
• Sandy's rent continues to be based on $540.
• Sandy is laid off on 9/15/00 and reports her layoff immediately.
• She has 9 months of full disallowance and 12 months of the 50% disallowance left.
• Sandy is called back to work on 1/15/2001, at her $1,100 month salary and she reports immediately.
• Sandy's rent is based on $540 until 10/15/2001 (the end of the 12 month full
  disallowance.
• Her rent is based on $820 from 10/15/2001 through 1014/2002 (base rent of $540 plus $280, which is 50% of the $560 disallowance.
• Sandy's rent is based on her full income beginning 10/15/2002.

  Following is an example of an income disallowance and imputed welfare income:

• Meet Sandy's neighbor, John Hill.
• Like Sandy, John was receiving TANF income of $540 per month.
• On June 1, 2000, John was sanctioned $140/month for failure to comply with economic self sufficiency requirements for 3 months.
• John's rent is unchanged. It continues to be based on $540, even though he is only receiving $400 for June through August.
• Sandy told John about her great new job, so he applied to the Chrysler plant.
• John 's rent is still based on his pre sanctioned welfare income of $540.
• Like Sandy, he was laid off on 9/15/2000 and he reported this to the housing authority immediately.
• John is called back 1/15/2001 at his old salary of $1,000 and reports to the housing authority.
• He has 10 months of full disallowance left and 12 months of 50% disallowance.
• His rent will be based on his old welfare income of $540 through 11/15/2001 and based on $770 through 11152002 (base rent of $540 + $230, which is 50% of the $460 disallowance).

Q36: If a family was working, and then becomes unemployed, applies for TANF, receives TANF for one month and then becomes employed again, is the member entitled to the disregard.
A36: Yes. The regulation states that a person is eligible if they have experienced employment during or within 6 months after receiving TANF assistance. This person is eligible for EID.

Q37: A tenant goes to work making $300/month that equals $3,600. This tenant was previously receiving SSI and MFIP that added up to $7,000 per year. Would this tenant be eligible for the Earned Income Exclusion? Why or why not? In other words, does the tenant have to make more money employed than not employed to be eligible for the Earned Income Disallowance
A37: Because the family's annual income increased, the family would qualify for EID as long as the family met one of the three qualifying factors. Here is how you would calculate the exclusion:

The term "Qualifying Event" is used to mean the event that took place that triggered EID (new employment, increase in income during training program, etc.).

Year 1:
Pre Qualifying Event (Baseline Income):
Annual Income of family member = $7000 (SSI)
Post Qualifying Event:
Annual Income of family member = $10,600
($7000=SSI, $3600=wages)
Amount of Exclusion = $3600 ($10,600 $7000*)
HUD 50058 Entries:
7b 7d 7e 7f
W $3600 $3600 $0
S $7000 $0 $7000

Year 2:
Pre Qualifying Event (Baseline Income):
Annual Income of family member = $7000 (SSI)
Reexamination (following completion of 12 month full exclusion):
Annual Income of family member = $11,000 ($7000=SSI, $4000=wages)
Amount of Exclusion = $2000 ($11,000 $7000*= $4000 x 50%)

HUD 50058 Entries:
7b 7d 7e 7f
W $4000 $2000 $2000
S $7000 $0 $7000

*Baseline income of $7000 is used to calculate the exclusion in both Year 1 and Year 2.

IV. Statutes and Regulations

42 U.S.C. § 1437a(1998) (Amendment to Quality Housing and Work responsibility Act of 1998)

24 C.F.R. § 5.403 (2004) (definitions of various terms including; annual contributions contract, disabled family, family, live-in aide)

24 C.F.R. § 5.603 (2004) (definitions of various terms including; child care expenses, dependent, economic self sufficiency program, extremely low income family, net family assets, tenant rent)

24 C.F.R. § 5.609 (2004) (description of annual income and welfare assistance)

24 C.F.R. § 5.611 (2004) (description of adjusted income with mandatory deductions)

24 C.F.R. § 5.615 (2004) (How welfare benefit reductions affect family income)

24 C.F.R. § 5.617 (2004) (description of self-sufficiency incentives for persons with disabilities in the Section 8 Voucher Program, HOME, HOPWA and Supportive Housing Programs)

24 C.F.R. § 960.255 (2004) (primary EID regulation for public housing residents)

24 C.F.R. § 990.109 (2004) (description of operating income formula and rental revenue)

24 C.F.R. § 990.116 (2004) (description of PHA use of increase in rental income)

67 Fed. Reg. 6,820 (Feb. 13, 2002) (technical amendments to 24 CFR PARTS 5 and 982,
(defining “qualified families” and the Applicability of the “Disallowance.”)

V. Sample Questions to Identify Qualification for EID Benefits

Sample #1

ANNUAL INCOME CALCULATIONS AND RECERTIFICATION

Does the Family Qualify for Earned Income Disallowance (EID)? YES NO

Head of Household: __________________________
Family Member: _____________________________
________________________ _____________________

Answer the following questions to determine if a family qualifies for EID:

1. Has the family experienced an increase in wages as a result of new employment or increased earnings in existing employment?

YES

NO IF YES, see next question.

2. Is the family member (experiencing the increase) a resident of public housing, or a disabled participant in either Section 8 Voucher, HOME Investment Partnership Program (24 C.F.R. part 92), Housing Opportunities for Persons with Aids (HOPWA)(24 C.F.R. 574), or the Supportive Housing Program (24 C.F.R. 583)?

Public Housing Resident
(*the resident does NOT have to be disabled )

YES

NO

Disabled Section 8

YES

NO

Disabled and in the HOME Investment Partnership Program (24 CFR part 92)

YES

NO

Disabled participant in Disabled participant in HOPWA (24 CFR 574)

YES

NO

Supportive Housing Program (24 CFR 583)

YES

NO

3. If NO to all of the above, the family does NOT qualify for EID. If YES to ANY of the above, then ONE of the following must be checked.

(a.) Prior to the new employment or increase, the family member was “unemployed” for at least the past 12 months;

YES

NO; or

(b.) Prior to employment or increase, the family member was earning less than (the higher of Federal, state/local minimum wage) $________X 500=___________).

YES

NO; or

(c.) Did the family member experience an increase in wages while participating in an economic self-sufficiency or other job training program? (one of the following boxes must be checked).

JOB TRAINING

ENGLISH PROFICIENCY

EMPLOYMENT COUNSELING

WORKFARE

WORK PLACEMENT

FINAN. OR HOUSEHOLD MGT.

BASIC SKILLS TRAINING

APPRENTICESHIP

EDUCATION

SUBSTANCE ABUSE PROG.

MENTAL HEALTH TREATMENT PROGRAM

ON THE JOB TRAINING

OTHER JOB TRAINING OR JOB READINESS PROGRAM
(PLEASE DESCRIBE___________________________________________________)

(You are encouraged to create a list of local programs with the names of the organizations and schools); or

(d.) The family member is now or has within the 6 months immediately prior to employment or increase in income received cash assistance, benefits or services under any state program for TANF or Welfare to Work. YES NO; or

(e.)The family member is currently receiving or has received services from TANF or Welfare to Work of at least $500 within the past six months. (*This includes one time payments, wage subsidies and transportation assistance. You should check with your local TANF program for a list of such benefits and services). YES NO

IF YOU ANSWERED YES TO ONE OF THE ABOVE, THE FAMILY QUALIFIES FOR THE EID.
IF NOT, THE FAMILY DOES NOT QUALIFY.

Sample #2

QUESTIONNAIRE FOR PUBLIC HOUSING RENT REDUCTIONS AND/OR RENT REBATES

During the period from October 1, 1999 through the present, did anyone in your household experience an increase in earned income by either getting a raise or getting a job?________

(If yes, ask questions a, b, c, and d, below; if no, continue with rest of interview).

a. Did the household member who became employed have less than $2575.00 [This is the equivalent of the 500 hours at federal minimum wage of $5.15 per hour. If the state minimum wage is higher, the amount of money noted here would be higher] in earned (work) income during the twelve months before s/he became employed?__________

b. Did any household member receive an increase in income (either a raise or get a new job) while the household member was participating in a Family Self-Sufficiency Program or other job training program (includes employment counseling, work placement, basic skills training, education, English proficiency, workfare, financial or household management, apprenticeship, substance abuse or other mental health treatment program)?____________

c. For the period of 6 months prior to the increase in income, did any household member receive ongoing TANF benefits?

d. For the period of 6 months prior to the increase in income, did any household member receive a diversion grant, work incentive bonus or any other benefits from their local welfare office that were worth in excess of $500.00?_________

If the tenant answered yes to the initial question and yes to either a, b, c, or d, the tenant is probably eligible for an earned income disregard which would enable the Housing Authority to keep the rent at a lower amount as opposed to raising the rent in response to the increased income in the household.

Sample #3

SCREENING FORM FOR EARNED INCOME DISREGARD (EID) ISSUES

Please ask these questions to all current clients and to those clients who contact Legal Aid regarding a request for services:

1. Do you reside in public housing (e.g. housing owned and operated by a housing authority DHA)? (If yes, go to Q2; if no, go to Q5).

2. During the period from October 1, 1999 through the present, did your household experience an increase in income as a result of a household member becoming employed?_______ (If yes, ask Q2a; if no, go to Q3).

a. Did the household member who became employed have little or no earned (work) income during the full year before s/he became employed?
(Go to Q3)

3. During the period from October 1, 1999 through the present, did any household member receive an increase in income (either a raise or get a new job) while the household member was participating in a Family Self-Sufficiency Program or other job training program (includes employment counseling, work placement, basic skills training, education, English proficiency, workfare, financial or household management, apprenticeship, substance abuse or other mental health treatment program). (Go to Q4).

4. During the period from October 1, 1999 through the present, did any household member receive an increase in income (either a raise or get a new job)?
(If yes, ask Q4a; if no, go to Q5)

a. For the period of 6 months prior to the increase in income, did any household member receive ongoing TANF benefits (If yes, go to Q10; if no, go to Q4b)

b. For the period of 6 months prior to the increase in income, did any household member receive a diversion grant, childcare assistance or any other benefits from their local welfare office that were worth in excess of $500.00 ____________________ (If yes, go to Q10; if yes to Q2 and 2a, go to Q10; if yes to Q3, go to Q10; if no go Q11)

5. Do you have a Section 8 voucher? (If yes, ask Q6; if no, read Q11)

6. Are you or is anyone else in the household disabled (receive or recently received AND, SSI or Soc. Sec. Disability Benefits)? (If yes, ask Q7; if no, read Q11)

7. During the period from February 20, 2001 through the present, did your household experience an increase in income as a result of a disabled person in your household becoming employed?_____ (If yes, ask Q7a; if no, go to Q8)

a. Did the disabled household member who became employed have little or no earned (work) income during the full year before s/he became employed?
(Go to Q8)

8. During the period from February 20, 2001 through the present, did any disabled household member receive an increase in income (either a raise or get a new job) while the disabled household member was participating in a Family Self-Sufficiency Program or other job training program (includes employment counseling, work placement, basic skills training, education, English proficiency, workfare, financial or household management, apprenticeship, substance abuse or other mental health treatment program). (Go to Q9).

9. During the period from February 20, 2001 through the present, did any disabled household member receive an increase in income (either a raise or get a new job)?
(If yes, ask Q9a; if no, go to Q11).

a. For the period of 6 months prior to the increase in income, did the disabled household member receive ongoing TANF benefits (If yes, go to Q10; if no, go to Q9b)

b. For the period of 6 months prior to the increase in income, did the disabled household member receive a diversion grant, childcare assistance or any other benefits from their local welfare office that were worth in excess of $500.00 (If yes, go to Q10; if yes to Q7 and 7a, go to Q10; if yes to Q8 go to Q10; if no to all, go to Q11)

10. Do you want Legal Services to investigate whether your rent was improperly set by the Housing Authority which could result in the housing authority having to repay you for the overcharges? (If yes, tell them that someone from the Housing Unit will be in contact with them; if no, thank them for their help)

11. Thank you for answering these questions. Your answer will be helpful to insure that your local housing authorities are following the proper procedures in setting tenant rents.

VI. Articles

Earned Income Disregards for Public Housing Tenants, 28 HOUS. L. BULL. 1 (Jan. 1998)

PHAs are Slow to Heed Earned Income Disregard Program, 33 HOUS. L. BULL. 37 Feb. 2002)

Earned Income Disregard: Practical Steps For Advocates, 32 HOUS. L. BULL. 76 (Mar. 2002)

Earned Income Still a Hidden Treasure for Many Residents, 34 HOUS. L. BULL. 181 (Sept. 2004)

Who Qualifies for the Public Housing Earned Income Disregard? 34 HOUS. L. BULL. 183 (Sept. 2004)

Footnotes

1. The amendments are contained in Section 508(b) of the Quality Housing and Work Responsibility Act of 1998, 42 U.S.C. § 1437a(d) (West 2003).

2. 24 C.F.R. §§ 960.255 (2004).

3. 24 C.F.R. §§ 5.617 (2004); 66 Fed. Reg. 6218-01 (Jan. 19, 2001) (effective Feb. 20, 2001) Determining Adjusted Income in HUD Programs Serving Persons with Disabilities: Requiring Mandatory Deductions for Certain Expenses and Disallowance for Earned Income, as amended 67 Fed. Reg. 6820-01 (Feb. 13, 2002).

Initially, the mandatory earned income disallowance for the disabled was applicable only for “disabled families;” it was not available to a disabled individual living in a non-disabled family. This provision was corrected and the EID is now available to any disabled individual participating in a covered program. See 67 Fed. Reg. 6820 (Feb. 13, 2002) (amendment effective Mar. 15, 2002); see also, 24 C.F.R. §5.403 for definitions of “family,” “disabled family,” and “person with disabilities.” Note the effective dates of the regulations, which may have an impact on a tenant’s eligibility for the EID.

4. 24 C.F.R. § 92 (2004).

5. Id., § 574.

6. Id., § 583.

7. Id., § 982.

8. 42 U.S.C.A. §1437a(d)(3)(A)(West 2003).

9. Id., § 1437a(d)(4) (West 2003).

10. 24 C.F.R. §§ 960.255 and 5.617 (2004).

11. Id., §§ 960.255(a)(i) and 5.617(b)(1).

12. Id., §§ 960.255(a)(iii) and 5.617(b)(3).

13. 42 U.S.C.A. § 1437a(d) (West 2003).

14. 24 C.F.R. §§ 960.255 and 5.617 (2003).

15. Id., §§ 960.255(b) and 5.617(c).

16. Id. §§ 960.255(b)(3) and 5.617(c)(3). See HUD’s Admissions and Occupancy FAQ, Frequently Asked Questions about the Mandatory Earned Income Disregard from Annual Income, II.C, Q. & A. 16 and 21b. available at http://www.hud.gov/offices/PIH/phr/about/ao_faq_eid.cfm. Note the FAQ rule 21b if the tenant’s income increases when the tenant has opted to pay a flat rent. The EID applies when the tenant is eligible to request it.

17. See HUD’s Admission and Occupancy FAQ, supra note 16, Q & A.4.

18. Id., Q. & A. 16. The fact that the tenant gets the benefit of the EID despite non reporting, the tenant should not be evicted for failure to report the change in earned income.

19. Id., Q & A. 23.

20. 24 C.F.R. § 960.255(a)(I) (2003); 42 U.S.C.A. § 1437a(d)(3)(B)(I) (2003).

21. See HUD’s Admission and Occupancy FAQ, supra note 16, Section II.C. Q & A. 6.

22. 24 C.F.R. § 960.255(a) (2003). See HUD’s Admission and Occupancy FAQ, supra note 17, Section II.C. Q & A. 1.

23. 24 C.F.R § 960.255(a)(iii); 42 U.S.C.A. § 1437a(d)(3)(B)(iii) (2003);see also HUD’s Admission and Occupancy FAQ, supra note 16, Section II.C. Q & A. 20. A prior version of the HUD FAQ provided that the benefit available to a TANF family could be obtained by a person who became employed and who is living in the unit but not a recipient of TANF benefits.

24. See HUD’s Admission and Occupancy FAQ, supra note 16, Section II.C., Q & A. 8, 15, 19 & 20.

25. Id. Q & A 8 & 9. There is no minimum income maintenance amount under TANF that a tenant must receive to qualify for the EID.

26. Id. Section II.C. Q. & A. 22.

27. 24 C.F.R. § 5.615(b)(1) (2003).

28. See HUD’s Admission and Occupancy FAQ, supra note 16.

29. 24 C.F.R. § 960.255(a)(ii) (2003); 42 U.S.C. § 1437a(d)(3)(B)(ii) (2004).

30. 24 C.F.R § 5.603(b) (2004).

31. See HUD’s Admission and Occupancy FAQ, supra note 16, Section II. C., Q & A. 5 and 26 ; see also 24 C.F.R.§ 5.603(b) (2003) (definition of economic self-sufficiency program).

32. See HUD’s Admission and Occupancy FAQ, supra note 16, Q. & A. 26, 27.

33. Id., Q & A. 26. More recently, HUD has also defined the term self sufficiency with respect to the community service requirement. In that definition, budget and credit counseling as well as activities required by the welfare department as part of welfare reform are included as examples. See Public Housing Occupancy Guidebook, June 2003, 15.3, available at http://www.hud.gov/offices/pih/programs/ph/rhiip/phguidebook.cfm.

34. Id., Q. & A. 24.

35. Id., Section II. C., Q & A. 35.

36. Id., Q. & A. 35.

37. 42 U.S.C.A. § 1437a (2003); 24 C.F.R. § 960.255(d) (2003).

38. 24 C.F.R. § 960.255(d)(3) (2003).

39. Id. § 960.255(d)(6).

40. See PHA Plans Template (HUD 50075), paragraph 4A(1)d.(03/31/2002),available online at www.hudgov/pih/pha/plans/phapa_templates.html.

41. See 42 U.S.C. § 1437a(b)(5)(B) (West Supp. 2002); see also 24 C.F.R. § 5.611 (2004).

42. See PHA Plans Template (HUD 50075), paragraph 4A(1)d.(03/31/2002),available online at www.hudgov/pih/pha/plans/phapa_templates.html.

43. 66 Fed. Reg. 17,276 (Mar. 29, 2000).

44. 24 C.F.R. §§ 990.109(b)(iii) and 990.116(a) (2003).

45. Serge Kovaleski, Public Housing Delay Shorts Tenants, WASH. POST-Metro Section, July 28, 2003, at B1,B3.

46. The information in this section was obtained from OSLSA REPORTS, Oct./ Nov. 2000, pg. 9.

47. This information was obtained from Drake Holliday, Senior Staff Attorney at Legal Aid Society of Mid-Tennessee & the Cumberlands and from Russ Overby, Staff Attorney at the Tennessee Justice Center in March, 2004 by NHLP staff.