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Earned Income Disallowance


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Earned Income Disallowance


Housing Help SessionsModel Admissions & Continued Occupancy Policy (ACOP)

NMA Host:Trainer Annie Stevenson



Housing Help Sessions

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Welcome to Housing Help!

August 2010 revisions to the NMA Model ACOP Rent Refinement Final Rule Notice PIH 2010-19

EIV requirementsNew verification hierarchy



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Model Administrative Plan Revision

CD contents Cover letter Filing instructions Revision pages for ACOP

Replace individual pages Full ACOP



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Revision Steps

1. Read cover letter Explanation of changes

2. Review Guide chapter(s) Policy decisions as needed

3. Select your PHA policies Use default(s) or paste/type in



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Revision Steps

4. Board approval Current revision is mostly mandatory May implement pending Board review

5. Incorporate changes Electronic: paste into current version Paper: print and file change pages



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Changes in This Revision

Rent refinement final rule Federal Register 12/29/09 Notice PIH 2010-3

Notice PIH 2010-19 Effective Use of EIV New verification hierarchy



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Model ACOP

Where are the references? HUDCLIPS:

http://www.hud.gov/offices/adm/hudclips/ NAHRO website: http://www.nahro.org/index.cfm



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The HUD changes covered in this revision tend to narrow the PHA’s policy options rather than expand the options Areas in which PHAs formerly had discretion are

now mandated by HUD Model ACOP chapters revised to remove

discretionary policies



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Rent Refinement Final Rule



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Final Rule Background

The Rent Refinement rule was published & withdrawn in early 2009

A new “proposed rule” was published 10-15-09 The “final” final rule was published 12-29-09

Effective date 1-31-10



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Final Rule

Two components of the previous versions of the rule were dropped in the final rule: Change to citizenship verification regulation Change to definition of “annual income”

The regulations remain unchanged in these areas



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Final Rule

The final rule makes regulatory changes to: SSN requirements

HUD published Notice PIH 2010-3 on SSN verification Records retention EIV usage



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Social Security Numbers



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New SSN Regulations

Regulations were revised effective 1/31/10 SSNs must be provided for all household

members except persons who are exempt Includes foster child & live-in aide Children under 6 are no longer exempt



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Who Is Exempt?

Noncontending family members Current participants who have not provided a

SSN and who were at least 62 on 1/31/10 Should be very rare

No requirement to re-verify SSNs for household members already validated through EIV



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Acceptable Documentation

PHA must accept any of the following: SS card SSA-issued document Original document issued by federal, state or

local government agency Containing name & SSN



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PHA can only reject documents if: They are not original They appear to be forged, or They appear to be altered or not legible

All SSNs will be verified through EIV



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PHA should explain to family reason for rejection and request acceptable documentation within a specified time frame



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Removing File Documentation

Once SSN is verified in EIV, HUD strongly recommends that documentation should be removed from file At next annual or interim reexam Purpose: safeguard data, prevent identity theft



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Documentation Time Frames

Applicants: SSNs for each household member must be disclosed and documented at time of eligibility determination Except noncontending members Family cannot be admitted to program until the

requirement is met



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Documentation Time Frames:Residents

Current residents who have not previously disclosed SSN: next interim or annual reexam Includes children under 6 & non-exempt HH

members who haven’t previously provided If a HH member is not exempt & has no SSN,

must obtain one



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Adding new HH member who is 6 or over OR is under 6 but already has SSN: Must disclose & document SSN during

processing (interim) Cannot add new member until requirement is

met



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Adding new HH member who is under 6 & has no SSN: Must disclose & document SSN within 90 days of

addition to HH May allow 90-day extension Must add child to HH and provide deductions

during this period



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Penalties: Applicants

PHA must deny assistance if SSN requirements are not met

Disclosure & documentation of SSNs for all HH members (except noncontending persons) is a condition of eligibility for public housing



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Penalties: Residents

PHA must terminate assistance or tenancy of entire family if SSN requirements are not met

Must defer termination for 90 days if: Failure to meet requirement was due to

unforeseen circumstances/outside family’s control, and

“Reasonably likely” family can meet requirement within 90 days



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New SSN requirements reflected in chapters: 3 (Eligibility) 7 (Verifications) 13 (Termination)

Minor changes in other chapters (i.e. interim requirements)



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Mandatory EIV Usage



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EIV Usage

New regulation at 24 CFR 5.233 Notice PIH 2010-19

PHAs must use EIV as a third-party source during reexams

Most PHAs already use EIV



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EIV Usage

PHAs must use EIV “in its entirety” as a third-party source In its entirety includes using EIV reports, i.e.

Deceased Tenant Report, Failed Verification Report, etc.

Failure to use EIV may result in sanctions



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Changes due to mandatory use of EIV are in chapters 6 and 7

EIV mandated use of management reports is a procedural requirement No policy issues or need for Board approval



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Verification Notice 2010-19



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Notice PIH 2010-19 Administrative Guidance for Effective and

Mandated Use of the Enterprise Income Verification (EIV) System

Published May 17, 2010 Discusses new verification hierarchy, using EIV

“in its entirety”, and repayment agreements



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Notice PIH 2010-19

Replaces verification hierarchy in Notice PIH 2004-1 with a new, 6-level hierarchy

New definition of “third party verification” Tenant-provided documents generated by a third

party are now considered “third-party written” verification



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Hierarchy of Verification Methods

HUD has established a hierarchy of six verification levels

Using this hierarchy, PHAs should develop and adopt verification policies as to what qualifies as adequate verification Policies must be consistent with the regulatory

requirements



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Recommended Levels of Verification

Up-front income verification (UIV) using EIV UIV using other sources Written third-party docs provided by family Written third-party verification form Third-party oral Tenant declaration



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Upfront Verification Using EIV

Use of EIV is required for annual and interim reexams

EIV is not available for applicant families or new members added to currently assisted households



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HUD Guidance on EIV

EIV is sufficient as third-party verification of employment when The family does not dispute the data, AND Current tenant provided documents (i.e.

paystubs) are available



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HUD Guidance on EIV

The PHA MUST obtain additional third-party verification when the family disputes EIV employer data



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HUD Guidance on EIV

The PHA MAY obtain additional third-party verification when the PHA determines that additional information is necessary, such as Effective dates of employment Pay rate, hours worked for new jobs Confirmation of a change in circumstances (reduced

hours, reduced rate of pay)



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UIV Using Other Sources

Second most preferable form of verification PHAs are encouraged to use non-HUD UIV

tools, such as The Work Number State government databases/SWICA

(continued…)



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UIV Using Other Sources

PHAs are encouraged to use non-HUD UIV tools, such as State TANF systems Credit Bureau Association (CBA) credit reports Internal Revenue Service (IRS) – tax transcript

Request with IRS form 4506-T



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Written Third-Party Verification

An original or authentic document generated by a third-party source

Includes documents provided by family Dated within 60 days of reexam or PHA

request



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Written Third-Party Verification Examples of acceptable tenant-provided

documents generated by a third party Pay stubs/payroll summary SSA award letters Bank statements Welfare/unemployment notices Etc.



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Written Third-Party Verification The PHA may reject tenant-provided third-party

documents only if they are Not original Forged Altered, mutilated, or not legible

Must explain to family and request additional documentation



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Written Third-Party Verification Form

The “traditional” third-party written verification Standardized form filled out by third party

Tenant-provided documents generated by a third party now rank higher than third-party forms



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Written Third-Party Verification Form

Notice PIH 2010-19 states that there are administrative burdens and risks associated with this verification method Incomplete or falsified information

Documents from computerized systems or databases are considered more reliable



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Oral Third-Party Verification

PHAs contact the independent sources by telephone or in person

Third-party oral verification may be used when requests for written verification have not been returned within a reasonable time – e.g. 10 business days



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Tenant Declaration

An applicant or resident submits an affidavit or notarized statement to certify income or expenses that s/he has reported

This method should be used as a last resort when no other verification method is possible



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Revisions to chapter 6 (income projection) and chapter 7 (extensive changes throughout chapter)

Chapter 8 (leasing and inspections) revised to include EIV informing notice at orientations



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Notice 2010-19 – Repayments



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Tenant Repayment Agreement

Tenant required to reimburse PHA if they underreport or fail to report income PHA must terminate for refusal to enter into a

repayment agreement or failure to make payments

No amnesty or debt forgiveness programs allowed



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Tenant Repayment Agreements

Repayment agreement must Be written Dated Signed by PHA and tenant Include total amount owed Include amount of lump sum payment made at

time of execution (if applicable) Include monthly payment amount



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Repayment agreement must Reference the paragraphs of the lease with

which the tenant is in noncompliance Terms of agreement may be renegotiated for

increase/decreases in family income Late and missed payments may result in

termination



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Amounts are determined as far back as PHA has documentation of family reported income Example: Family underreported income for 5

years PHA has documentation for last 3 years PHA is only able to determine retroactive rent for last

3 years



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Monthly retroactive rent payment should not exceed 40 percent of family’s adjusted monthly income However, PHA may establish thresholds and

policies for repayment agreements



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Tenants may repay retroactive rents In a lump sum In monthly installments A combination of the two



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The recommended 40% threshold is included as the default Option 2 is the “old” repayment policy The 40% method is not mandatory See Chapter 16 guide



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Other ACOP Changes

Updated references (only) for LEP & accessibility (Chapter 2) No change to PHA policy options

Updated community service guidance (Chapter 11)

Other minor corrections



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NMA Housing Help Session

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NMA Housing Help Session