[ Reply ]
From: Mac McCreight
email: mailto:mmccreight@gbls.org
link: http://
date: 10/23/0 11:19
Date: 12/21/00
Time: 12:19:55 PM
Remote Name: 207.251.188.199
Here's the final version of the comments that we sent to HUD on the earned income disregard, etc. rule for persons with disabilities. As discussed on the 10/19/00 LALSHAC Public Housing, Certificate & Voucher Workgroup call, these comments were also submitted for LALSHAC and NHLP. I revised the comments from the draft based on additional thoughts/suggestions/proposals from Barbara Sard and Amy Copperman. Thanks.
October 19, 2000–Per overnight mail
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 on behalf of the Loose Association of Legal Services Housing Advocates and Clients (LALSHAC), the National Housing Law Project, Homestart, and individual clients of Greater Boston Legal Services
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 on behalf of the Loose Association of Legal Services Housing Advocates and Clients (LALSHAC), the National Housing Law Project (NHLP), Homestart (a Boston-based organization that works with homeless and formerly homeless clients on housing search and stabilization, and has extensive experience with the McKinney, HOPWA, and Shelter Plus Care programs and clients with disabilities), as well as on behalf of a number of individual clients of Greater Boston Legal Services..
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, because over and over we have seen 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 such as as services which were previously subsidized (Food Stamps, medical insurance coverage) and which are no longer available due to the family's increased income, and other costs (transportation, day care, etc.) which must be paid in order to work. 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.
A. Technical Issues Requiring Clarification.
We think, however, that there are some technical issues that may require clarification regarding this portion of the rule:
(1) 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). Such a family, for example, might include a non-disabled head of household and an adult daughter with a disability who's now transitioning from unemployment to work. Nothing in the enabling statute on earned income disregards would require HUD to restrict the disregard to just those families whose head or spouse is a person with a disability. We would therefore recommend that the following definition of "Qualified family" be used for the initial paragraph: "A family which includes an adult household member with a disability residing in housing assisted under one of the programs listed in paragraph (a) of this section or receiving tenant based rental assistance under one of the programs listed in paragraph (a) of this section" (new language in bold, with the word "disabled" prior to "family" deleted).
(2) Period of Unemployment Should Include When the Individual Was On Public Assistance So Long as Individual Was Unemployed: Under sub-paragraph (1) of the definition of "Qualified family", HUD should clarify that in determining that a person with disabilities was previously unemployed for one or more years prior to employment, this includes 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. We have had earned income disregards under 24 CFR 960.255 needlessly delayed because of the lack of this guidance for the existing regulation. A clarifying statement in the preamble to the final rule, which makes clear that this is HUD's interpretation for both the new rule and the existing earned income disregard, would be helpful.
(3) Persons In a PASS Program Should Qualify for the Earned Income Disregard after the Period of Complete Disregard Elapses: We believe that persons with disabilities who are participants in the Plan to Achieve Self-Sufficiency (PASS) under the SSI program should automatically qualify for the earned income disregard under sub-paragraph (2) of the definition of "Qualified family", since they are by definition participants in a self-sufficiency program. The current regulations, at 24 CFR § 5.609(c)(8)(ii), provide for a complete disregard for a limited period in accordance with PASS program requirements; this time period is nine (9) months. After that period of time has elapsed, the 18-month earned income disregard period should apply HUD guidance/clarification on this point would be helpful.
(4) The Disregard Should Apply So Long as the Household Was Receiving TANF Assistance, Benefits, or Services, And Should Not Depend on Whether the Individual Obtained Such Assistance: 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 is that many individuals who have disabilities may not be included in the TANF assistance unit because they are receiving SSI or state disability benefits. The treatment of persons with disability benefits is by no means uniform; thus, for example, if the household member receives OASDI benefits, as opposed to SSI benefits, s/he may be included in the assistance unit. The disregard should not depend on whether the individual was in fact in or out of the TANF assistance unit, but on the fact that the household received such benefits . To address this, we would recommend that the first portion of subsection (3) of the "Qualfied family" definition be changed to read as follows:
"(3) Whose 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 the family receives assistance, benefits, or services under any state program for temporary assistance for needy families funded under Part A of Title VI of the Social Security Act, ..." (new language in bold; "receives" substituted for "receiving".)
If HUD does not feel free to change this language, because it derives from the language in the Act, then it would be helpful for HUD to clarify, in the preamble to the final rule, that this is its interpretation that the term "receives" refers back to the "family", as opposed to
"family member who is a person with disabilities".
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".
B. Possible Expansion of the Earned Income Disregard for Persons With Disabilities
We also think that HUD should consider, as a matter of policy, possible expansion of the earned income disregard for persons with disabilities:
(1) Expansion to Shelter Plus Care program: To the extent that it is possible, HUD should also expand the disregard to the Shelter Plus Care program. This program is extensively utilized by individuals with disabilities, who are attempting to transition, through the continuum of care, to self-sufficiency. Programmatic goals are likely to be enhanced with the incentive of the disregard..
(2) Include Persons Transitioning from Other Forms of Public Assistance: The disregard explicitly addresses families who are receiving, or have received in the prior six months, TANF-related assistance, benefits, or services. However, there may be cases where a household is receiving some other form of public assistance, and would not be eligible for one of the two other means for disregard provided in draft § 5.617. From a policy standpoint, the disregard should be available for persons transitioning from any form of public assistance to employment. Unless there is a reason, due to statutory or appropriation limitations, to not expand the disregard to cover these other programs, HUD should seriously consider expanding the definition of qualified family to cover those transitioning from other forms of public assistance associated with disability
(3) Expansion to Section 8 Moderate Rehabilitation and Project-Based Programs: Many individuals with disabilities reside in housing with Section 8 assistance under the moderate rehabilitation program or project-based subsidies. From a policy standpoint, 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. Unless there is a reason, due to statutory or appropriation limitations, to not expand the disregard to cover these other programs, HUD should do so.
4. 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 general earned income disregard, such as exists for federal public housing, to all participants in its project-based, moderate rehabilitation, 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)
E-mail: mmccreight@gbls.org