National Housing Law Project Public Housing

Introduction

Because of the changes in the welfare programs, many tenants in public housing and Section 8 mod rehab housing and participants in the certificate and voucher programs will be moving from welfare to work. When they make that transition, they need time to adjust to new rent levels. Congress and HUD over the years have added statutes and regulations that protect tenants from rent increases when they participate in training programs and receive expense reimbursements, stipends and earnings, and when they secure employment after completing the training. These rent rules have taken on added importance in light of the welfare program changes. Thus it is important that they be implemented by all public housing authorities.

Housing authorities, HUD officials, the welfare department, tenants, and their housing and welfare attorneys in Connecticut have just gone through a process to implement these rules there. The process has involved both prospective and retroactive implementation. The end result will be much greater assurance that the tenants will have the postponement of their rent increases to which they are entitled. While in Connecticut HUD provided the funding to cover the delayed phase-in of the increases, it has recently announced that it will no longer do so.¹ It would be very helpful if PHAs, HUD officials, welfare departments, tenants and attorneys in other states could undertake the same process with the same results.² This packet of materials, including materials describing the Connecticut experience, is intended to help you do that.

Please note that this packet describes only currently effective statutes and regulations. Legislation enacted in late 1998, makes significant changes to the mandatory disregards for public and Section 8 housing. These changes, however, do not take effect until October 1, 1999 and then only if Congress appropriates funds to implement them.³ Briefly, the newly enacted changes:

• broaden the categories of tenants entitled to the disregard beyond those who have participated in a government-sponsored training programs to add tenants previously unemployed for a year or more, currently receiving welfare, or have received it within the past six months.

• limit the mandatory 100% disregard of increased earnings to 12 months. Thereafter, for the next 12 month period, only 50% of any increase in earnings can be counted in the rent calculation.⁴

When public housing and Section 8 mod rehab tenants and certificate and voucher program participants participate in employment training programs, they sometimes receive payments related to their participation. The payments range from reimbursement for some of the costs of participating, such as babysitting costs, to stipends for attendance to wages paid for work performed in a program that involves both training and employment. Under HUD’s regulations these payments cannot be counted when the PHA calculates the tenants’ public housing or Section 8 rents. That exclusion lasts as long as the person is in the training program.

Questions and Answers

Q. Which tenants are covered by this rule?

A. Public housing and Section 8 mod rehab tenants and certificate and voucher participants.

Q. What types of programs must they be participating in?

A. Public or private employment training programs.

Q. What kinds of payments are excluded from income?

A. Reimbursements or allowances for expenses connected to the training like transportation, child care, equipment, and clothing;
Stipends for attending the program; and
Earnings from work that is part of the training program.

Q. How much of the payments are excluded?

A. All of the reimbursements and allowances and stipends are excluded.
All of the earnings are excluded, if HUD is funding the training program.
If HUD is not funding the program, exclude only the portion of the earnings that increases the family’s income above what it was before the program.

Q. For how long are these payments excluded?

A. The exclusion ends when the person leaves the training program.

Q. When did this rule go into effect?

A. This rule is a HUD regulation that was first issued in 1987 and became effective on November 1, 1987.

18 Month Earned Income Exclusion: General Description

In some cases, even after the training program is over, the tenant’s earnings from a new job are excluded from income for an additional 18 months. This exclusion is only available to public housing tenants. They must have gotten the job as a result of participating in a program providing employment training and supportive services. The program must be a public program, one authorized, funded and either operated or administered by a public agency, although the trainers can be from private companies. Only the income that exceeds the income the person had before entering the program is excluded, so the rent increase from the new job is delayed for the 18 months. This rule has been in effect since September 23, 1994.

Questions and Answers

1. HUD Notice PIH 98-56, Treatment of Income Received from Training Programs - Housing Authority Responsibilities (Nov. 20, 1998).  See Appendix 8.
2. HUD issued a notice reinforcing Notice PIH 98-2, Treatment of Income Received from Training Programs (Jan. 12, 1998) and reminding housing authorities of their responsibility to implement the mandatory Training Income Exclusions . HUD Notice PIH 98-56, Treatment of Income Received from Training Programs - Housing Authority Responsibilities (Nov. 20, 1998).  See Appendix 8.
3. HUD has recently  issued guidance informing housing authorities of their obligation to continue to implement the mandatory exclusions for training program payments and earned income increases described here.  64 Federal Register 8192 at 8198 (February 18, 1998). See Appendix 10.
4. Section 508 of the Quality Housing and Work Responsibility Act of 1998, Title V of P.L. 106-276, HUD Appropriations Act, Fiscal Year 1999 (October 21, 1998). 112 Stat, 2527, set out as Appendix 9.