[ Reply ]
From: Mac McCreight
email: mailto:mmccreight@gbls.org
link: http://
date: 10/17/0 12:13
Date: 12/21/00
Time: 12:17:04 PM
Remote Name: 207.251.188.199
Here's a draft letter to HUD oncomments on the proposed rule. I welcome any thoughts for changes, additions, deletions, judgment calls, etc. I have no pride of ownership, and as my previous e-mail indicated, think it would be advantageous to have something come from LALSHAC or NHLP on this, rather than just from isolated Legal Services programs. So if you want to adapt this as the basis for such a submission, I'd be happy to just be listed as a co-author. Let me know.
Office of the General Counsel Rules Docket Clerk Room 10276 Department of Housing & Urban Development 451 Seventh Street, SW Washington, DC 20410
Re: Docket No. FR-4608-P-01, "Determining Adjusted Income in HUD Programs
Serving Persons With Disabilities: Requiring Mandatory Deductions for Certain Expenses; and Disallowance for Earned Income"–Comments
Dear Rules Docket Clerk:
On August 21, 2000, HUD published in the Federal Register (65 Fed. Reg. 50842 et seq.) a proposed rule on "Determining Adjusted Income in HUD Programs Serving Persons With Disabilities: Requiring Mandatory Deductions for Certain Expenses; and Disallowance for Earned Income". These comments are submitted to you by our office on behalf of a number of individual clients and client groups that will be affected by the rule.
We wish to strongly support what's been proposed by HUD. The Supplementary Information on the proposed rule indicates that HUD is open to comment on additional ideas for expansion of the deductions or certain disregards, and we would strongly encourage HUD to expand the deductions beyond what's explicitly provided for in the proposed rule.
1. Expanding Deductions to Additional Programs
The proposed rule would expand existing deductions, as set forth in 24 CFR 5.611(a), to certain additional federal housing assistance programs, i.e., the HOME Investment Partnerships Program (24 CFR Part 92), the HOPWA program (24 CFR Part 574), the Shelter Plus Care program (24 CFR Part 582), the McKinney Supportive Housing program (24 CFR Part 583), the Rent Supplement program (24 CFR Part 200, Subpart W), the Rental Assistance Payments program (24 CFR Part 200, Subpart D), the Section 202 Supportive Housing Program (24 CFR Part 891, Subpart B), the Section 202 Direct Loan program (24 CFR Part 891, Subpart E), and the Section 811 Supportive Housing program (24 CFR Part 891, Subpart C). See proposed 5.601(d), at 65 Fed. Reg. 50845. The rule would insure that individuals and families who are participants in these programs get the same deductions as apply to participants in the federal public housing and tenant-based and project-based Section 8 programs, i.e., child care expenses, extraordinary medical expenses for elderly or disabled households, handicapped assistance expenses for households with a person (or persons) with disabilities, and the deductions from annual income for dependents or for any elderly or disabled family. See discussion at 65 Fed. Reg. 50843-50844. We think it is important that families in these programs be treated in an equitable fashion and be entitled to the same deductions as apply to public housing and the Section 8 programs. Often deductions may make the difference between whether a family may successfully utilize these programs or not; for example, families who have substantial medical, handicapped, or child care expenses may not be able to afford their rent, even where it is set at 30% of income, without these expenses being excluded. Putting all of the deductions for these programs in one location, and having the rules be the same, will also simplify things immensely for both housing providers and participants.
2. Earned Income Disregard for Persons With Disabilities
The current earned income disregard only applies to federal public housing, Our experience, and that of many advocates and legal services nationwide, is that many PHAs have not properly implemented the earned income disregard or broadly disseminated information regarding the disregard to their tenants. Far fewer families have taken advantage of the disregard as a result than would otherwise be expected, and those families tend to be those with advocates or who are themselves fairly knowledgeable and "savvy" about HUD rules. Nonetheless, we strongly support the earned income disregard, and there are many cases in which families have had an easier time negotiating the transition from public assistance to employment because of the application of the disregard. The transition often is associated with families having to absorb a lot of increased costs as services which were previously subsidized (Food Stamps, medical insurance coverage) are no longer available due to the family's increased income and other costs (transportation, day care, etc.) must be paid in order to be employed. By delaying and phasing in rent increases, the household is better able to make the transition. The short-term delay in increased revenue is more than offset by the long-term increase in rental income received as families are able to stay successfully employed.
We strongly support HUD's expansion of the earned income disregard for persons with disabilities to HOME, the Housing Choice Voucher Program, HOPWA, and the McKinney Supportive Housing Program. See proposed 24 CFR 5.617, as well as the discussion at 65 Fed. Reg. 50844. The disregard will encourage such households to transition from unemployment or public assistance to employment.
We think, however, that there are some technical issues that may require clarification regarding this portion of the rule:
(A) Restrictive Definition of "Qualified Family": Draft § 5.601(e) (65 Fed Reg. 50845) says that the earned income disregard is for "persons with disabilities". However, as drafted, § 5.617(b) (65 Fed. Reg. 50846) seems to limit the exclusion by defining "Qualified family" to be "a disabled family". The term "disabled family" is usually limited to households in which the head of household or spouse is a person with a disability. See 24 CFR § 5.403(b) (definition of "disabled family"), 24 CFR § 5.603(a)(2) (cross-referencing 24 CFR § 5.403's definition of "disabled family" for the purpose of the rent rule). Thus, in a case where there are several household members, and the member who has a disability is not the head of household or spouse, this definition could be read to bar the household from getting the disregard, even if the person with a disability otherwise is employed after a prolonged period of unemployment (or very limited, low-wage employment). We would recommend that HUD instead use the phrase "family which contains an adult household member with a disability", rather than "disabled family", in the definition of "qualified family".
(B) Period of Unemployment Should Include Where the Individual Was On Public Assistance So Long as Individual Was Unemployed: HUD should clarify that in determining that a person with disabilities was previously unemployed for one or more years prior to employment, this should include any period while the person was on public assistance (such as SSI, TANF, or a state benefits program (which could include general relief, unemployment compensation or workers compensation programs), so long as the person was not employed during that period. Thus, for example, if a household was getting TANF benefits but not employed, and then has been off TANF benefits for more than 6 months and remained unemployed, it could still qualify for the disregard upon securing employment if the combined period of unemployment (both while on TANF and when off) is more than 12 months.
(C) Disregard Should Not Be Limited to Transitioning of the Individual Off TANF Benefits: The third sub-grouping of "qualified family" is defined as where annual income increases as a result of new employment or increased earnings of a family member who is a person with disabilities "during or within six months after receiving assistance, benefits, or services under any state program for temporary assistance for needy families funded under Part A of Title IV of the Social Security Act." The problem here, in reality, is that many individuals who in fact have disabilities do not get TANF assistance; in fact, they may be excluded from the TANF assistance unit because they are receiving SSI or state disability benefits. One solution would be to substitute the phrase "the family receives" for "after receiving"; in this way, as long as the household received some sort of TANF assistance as defined in the statute, the disregard would apply, even if the individual did not receive the assistance. The other solution would be to add, after "Title IV of the Social Security Act," the phrase "or any other federal, state, or local income maintenance assistance for persons with disabilities".
We also think, from a policy standpoint, that HUD should extend the earned income disregard for persons with disabilities to the Section 8 project-based and Section 8 moderate rehabilitation programs. There is no logical rationale for treating these programs differently than the Section 8 tenant-based program for the purpose of rent calculation. Tenants in the project-based and moderate rehabilitation programs face the same dilemmas that tenants do in public housing and the tenant-based program in absorbing increased costs when they transition from public assistance to employment, and expansion of the disregard there will have substantial benefits in the long run for both these families and for their housing developments.
3. Expansion of the Earned Income Disregard Beyond Federal Public
Housing for Persons Other Than Those With Disabilities.
HUD indicates, in its Supplementary Information on the proposed rule, that it is limiting the extension of the earned-income disregard to persons with disabilities, but that it "is analyzing the extension of the earned-income disregard to all families served by HUD in these programs, and welcomes comment on this issue." 65 Fed. Reg. 50484. We would strongly encourage HUD to expand the earned income disregard to its project-based and tenant-based Section 8 programs, and to the other programs listed in 5.601(d). While persons with disabilities have the highest unemployment rate, and HUD has properly focused on their situation, many families that do not have individuals with disabilities nonetheless face the same dilemmas and burdens in transitioning from long-term unemployment or public assistance as do households with disabled members. The earned income disregard is a powerful incentive that should be adopted in all of HUD's programs as part of long-term strategies to assist low-income families to obtain and retain employment.
Conclusion
Please feel free to contact me if there are any questions regarding these comments.
Sincerely yours,
Mac McCreight
Senior Attorney, Housing Unit
(617-603-1652)