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HUD RHIIP Training. Case Study 2: Bennett Family (Public Housing). Bennett Case Study: Process Overview. Topic presentation Students complete case study Using Appendix C, File Review Checklist Worksheets Students review PHA’s HUD 50058

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hud rhiip training

HUD RHIIP Training

Case Study 2: Bennett Family (Public Housing)

Chapter 8: Case Study 2- Bennett

bennett case study process overview
Bennett Case Study:Process Overview
  • Topic presentation
  • Students complete case study
    • Using Appendix C, File Review Checklist Worksheets
  • Students review PHA’s HUD 50058
  • Students complete Appendix A, Tenant File Review Checklist
  • Review correct checklist and HUD 50058

Chapter 8: Case Study 2- Bennett

bennett case study topics
Bennett Case Study: Topics
  • Annual Income
    • Self Employment
    • Imputed Welfare Income
      • Imputed Welfare Income and (PH) MEID

Chapter 8: Case Study 2- Bennett

bennett case study topics4
Bennett Case Study: Topics
  • Rent Calculation
    • Mixed family rent calculation
      • Income based rent
      • Flat rent

Chapter 8: Case Study 2- Bennett

self employment

Self-employment

Chapter 8: Case Study 2- Bennett

self employment income
Self-employment Income
  • Treat as operation of a business/profession
    • Count net income

Chapter 8: Case Study 2- Bennett

self employment income7
Self-employment Income
  • Net income is
    • gross income less
      • business expenses
      • interest on loans
      • depreciation
        • Use straight line depreciation – see IRS guidelines
      • withdrawal of cash/assets for reimbursement of family’s investments in the operation

Chapter 8: Case Study 2- Bennett

self employment income8
Self-employment Income
  • Do not deduct expenses for expansion or capital improvements

Chapter 8: Case Study 2- Bennett

self employment income9
Self-employment Income
  • Estimating anticipated income for self-employment may be difficult
    • Family may not keep formal records
  • Family could maintain a monthly log of income and expenses for PHA
    • Use average over a period of 3 or more months

Chapter 8: Case Study 2- Bennett

self employment income10
Self-employment Income
  • Interim recertifications may be required to reflect changing circumstances

Chapter 8: Case Study 2- Bennett

self employment income example
Self-employment Income: Example
  • Mary James sells beauty products door-to-door, on consignment
  • November/December are biggest sales months but has sales all year long
  • Has no formal records of income except IRS form 1040
  • What should be used to determine annual income?

Chapter 8: Case Study 2- Bennett

self employment income example12
Self-employment Income: Example
  • Answer: With no other information available, use the income reflected on her form 1040 as her annual income.

Chapter 8: Case Study 2- Bennett

self employment income13
Self-employment Income:
  • Other IRS Forms applicable to self-employment
    • Schedule C: Profit or Loss From Business
    • Schedule E: Supplemental Income and Loss
    • Schedule F: Profit or Loss from Farming
  • Copies under reference tabs

Chapter 8: Case Study 2- Bennett

irs resources other irs forms
IRS Resources – Other IRS Forms
  • Form 4506: Request for Copy/Transcript of Tax Form
    • Can order tax return transcript 1040 series during current calendar year and 3 years prior
    • Verification of nonfiling
    • Form W-2 Information
    • Copy of tax forms and all attachments including W-2
      • $23 charge for each tax year
  • Requested items will be sent to taxpayer

Chapter 8: Case Study 2- Bennett

irs resources other irs forms15
IRS Resources – Other IRS Forms
  • Form 8821: Tax Information Authorization
    • Can be sent to Appointee (PHA)

Chapter 8: Case Study 2- Bennett

irs resources other irs forms16
IRS Resources – Other IRS Forms
  • IRS Letter 1722
    • Tax account listing
    • Shows
      • Filing status
      • Exemptions claimed
      • Adjusted gross income
      • Taxable income
      • Taxes paid
    • Family can obtain by calling 1-800-829-1040

Chapter 8: Case Study 2- Bennett

imputed welfare

Imputed Welfare

Chapter 8: Case Study 2- Bennett

imputed welfare income
Imputed Welfare Income
  • Congress has now linked welfare reform to housing reform

Chapter 8: Case Study 2- Bennett

imputed welfare income19
Imputed Welfare Income
  • QHWRA established two situations where PHAs cannot reduce rents when families have welfare benefits reduced
    • Welfare fraud
    • Non-compliance with economic self-sufficiency requirements

Chapter 8: Case Study 2- Bennett

imputed welfare income20
Imputed Welfare Income
  • Instead of reducing rent, PHA must “impute” welfare income equal to the amount of reduction in welfare benefits
  • Only applies to families who are required to participate in economic self-sufficiency activities in order to receive full welfare benefits

Chapter 8: Case Study 2- Bennett

imputed welfare income21
Imputed Welfare Income
  • Does not apply if reason for welfare benefit reduction is:
    • Expiration of lifetime or other time limits on welfare benefits
    • Economic self-sufficiency requirements completed but family member cannot find job

Chapter 8: Case Study 2- Bennett

imputed welfare income22
Imputed Welfare Income
  • Does not apply if reason for welfare benefit reduction is…
    • Noncompliance with a non self-sufficiency requirement
    • Because of an earlier inadvertent overpayment

Chapter 8: Case Study 2- Bennett

imputed welfare income23
Imputed Welfare Income
  • Verification must be obtained from welfare agency of:
    • Amount of the welfare reduction
    • Term of the reduction
    • Reason for the reduction
    • Any subsequent changes in the reduction

Chapter 8: Case Study 2- Bennett

imputed welfare income24
Imputed Welfare Income
  • PHA must rely on information provided by welfare agency

Chapter 8: Case Study 2- Bennett

imputed welfare income25
Imputed Welfare Income
  • After verification the PHA is required to compute rent exactly as if the welfare benefit reduction had not occurred, until:
    • Reduction ceases, or
    • Resident obtains some additional type of income

Chapter 8: Case Study 2- Bennett

imputed welfare income26
Imputed Welfare Income
  • If the family has imputed welfare benefits and their income from other sources then increases:
    • the increase offsets (takes the place of) the imputed welfare income instead of simply being added to the family’s overall income
    • when new income equals or exceeds imputed welfare benefits, imputed welfare is no longer counted

Chapter 8: Case Study 2- Bennett

imputed welfare income example
Imputed Welfare Income: Example
  • Monica Smith’s welfare grant was reduced due to failure to comply with economic self-sufficiency, as verified by welfare agency
  • Original grant was $500 but is now reduced to $300, for 12 months

Chapter 8: Case Study 2- Bennett

imputed welfare income example28
Imputed Welfare Income: Example
  • Original grant was $500 but is now reduced to $300, for 12 months
  • What is her monthly
    • Imputed Welfare Benefit
    • Total Income
    • counted for rent calculation?

Chapter 8: Case Study 2- Bennett

imputed welfare income example29
Imputed Welfare Income: Example
  • Original grant was $500 but is now reduced to $300, for 12 months
  • What is her monthly:
    • Imputed Welfare Benefit $200
    • Total Income counted for rent calculation $500

Chapter 8: Case Study 2- Bennett

imputed welfare income example30
Imputed Welfare Income: Example
  • Original grant was $500 but is now reduced to $300, for 12 months
  • Two months later, Monica gets a job earning $150 per month
  • How will her income be reported?

Chapter 8: Case Study 2- Bennett

imputed welfare income example31
Imputed Welfare Income: Example
  • Original grant was $500 but is now reduced to $300, for 12 months
  • Two months later, Monica gets a job earning $150 per month
  • How will her income be reported?
  • $300 Welfare cash payment
  • $150 Employment income
  • $ 50 Imputed Welfare Benefit

Chapter 8: Case Study 2- Bennett

imputed welfare income example32
Imputed Welfare Income: Example
  • Original grant was $500 but is now reduced to $300, for 12 months
  • Now, Monica earnings increase to $250/mo
  • How will her income now be reported?

Chapter 8: Case Study 2- Bennett

imputed welfare income example33
Imputed Welfare Income: Example

Original grant was $500 but is now reduced to $300, for 12 months

  • Now, Monica earnings increase to $250/mo
  • How will her income now be reported?
  • $300 Welfare cash payment
  • $250 Employment income
  • $ 0 Imputed Welfare Benefit

Chapter 8: Case Study 2- Bennett

imputed welfare income example34
Imputed Welfare Income: Example

Monica’s total monthly income will increase to $550 because the income increase from employment that occurred after the welfare benefit reduction is greater than the amount of the welfare benefit reduction.

Chapter 8: Case Study 2- Bennett

imputed welfare income35
Imputed Welfare Income
  • A family who has an imputed welfare benefit reduction will never pay less than the rent that was based on the former welfare income

Chapter 8: Case Study 2- Bennett

imputed welfare income36
Imputed Welfare Income
  • If the welfare benefit reduction occurred prior to admission, there is no imputed welfare benefit – the PHA counts only the amount of actual cash benefits received

Chapter 8: Case Study 2- Bennett

imputed welfare and meid
Imputed Welfare and MEID
  • Families who have welfare income imputed may qualify for the earned income disallowance when they go to work
  • Include the imputed welfare income as part of the baseline income (prior to the earned income increase)

Chapter 8: Case Study 2- Bennett

imputed welfare and meid example
Imputed Welfare and MEID - Example
  • Evelyn Jones’s full monthly welfare benefit was $500 ($6,000/yr) prior to $150 sanction
  • Evelyn found a job paying $1500 per mo and she qualifies for the earned income disallowance

How is Evelyn’s income calculated?

Chapter 8: Case Study 2- Bennett

imputed welfare and meid example answer
Imputed Welfare and MEID – Example Answer
  • Answer: The $150 imputed welfare income plus the $350 welfare cash payment make up Monica’s $500 baseline for the disallowance ($6,000 annually)

Chapter 8: Case Study 2- Bennett

imputed welfare and meid answer
Imputed Welfare and MEID: Answer
  • If welfare benefits end after employment:
    • count first $500 of employment income
    • exclude the remaining $1000 as the disallowance during full exclusion period ($1,000 is the incremental increase)

Chapter 8: Case Study 2- Bennett

welfare benefits end after employment
Welfare Benefits End After Employment

Chapter 8: Case Study 2- Bennett

answer continued
Answer continued
  • If welfare (and sanction) continue after employment:
    • Count $350 welfare plus $150 of employment income (which offsets $150 imputed welfare income), keeping pre-employment income counted at $500, and…

Chapter 8: Case Study 2- Bennett

answer continued43
Answer continued
  • If welfare (and sanction) continue after employment…
    • Exclude remaining $1350/mo employment income as the disallowance during full exclusion period

Chapter 8: Case Study 2- Bennett

welfare sanction continue after employment
Welfare & Sanction Continue After Employment

Chapter 8: Case Study 2- Bennett

mixed family rent calculation

Mixed FamilyRent Calculation

Chapter 8: Case Study 2- Bennett

mixed family rent calculation46
Mixed Family Rent Calculation
  • Mixed families are those families comprised of some eligible family members and some ineligible family members

Chapter 8: Case Study 2- Bennett

mixed family rent calculation47
Mixed Family Rent Calculation
  • Eligible family members may be:
    • Citizens, including naturalized citizens
    • Nationals (owe permanent allegiance to USA)
    • Noncitizens who have eligible immigration status

Chapter 8: Case Study 2- Bennett

mixed families
Mixed Families
  • Ineligible family members include:
    • Noncitizen students on a student visa, and their noncitizen family members
    • Family members choosing not to contend their citizenship status (noncontending members)

Chapter 8: Case Study 2- Bennett

mixed families49
Mixed Families
  • The number of ineligible family members will determine the proration of rent

Chapter 8: Case Study 2- Bennett

prorated rent calculation ph
Prorated Rent Calculation (PH)
  • Step 1:
    • Determine TTP as you normally would
  • Step 2:
    • Subtract TTP from PHA’s Public Housing maximum rent to get maximum subsidy (if all members were eligible) CFR 5.520

Chapter 8: Case Study 2- Bennett

prorated rent calculation ph51
Prorated Rent Calculation (PH)
  • Step 3:
    • Divide maximum subsidy by number of family members to get “member maximum subsidy”
  • Step 4:
    • Multiply member maximum subsidy by number of eligible family members (results in eligible subsidy)

Chapter 8: Case Study 2- Bennett

prorated rent calculation ph52
Prorated Rent Calculation (PH)
  • Step 5:
    • Subtract eligible subsidy from PH maximum rent to get prorated TTP
  • Step 6:
    • Subtract Utility Allowance from prorated TTP to get the Tenant Rent for a mixed family

Chapter 8: Case Study 2- Bennett

prorated rent calculation example ph
Prorated Rent Calculation: Example (PH)
  • Jones family has 6 members.
    • Four are eligible citizens
    • Two are noncontending members
    • PHA’s PH maximum rent is $600
    • Family’s TTP is $250
    • Utility Allowance is $50

Chapter 8: Case Study 2- Bennett

prorated rent calculation ph54
Prorated Rent Calculation (PH)

Public Housing Maximum Rent $600

Minus TTP - 250

Family Maximum Subsidy = 350

Family Maximum Subsidy $350

Divided by total family members / 6

Equals Member Maximum Subsidy = 58.33

Chapter 8: Case Study 2- Bennett

prorated rent calculation ph55
Prorated Rent Calculation (PH)

Member Maximum Subsidy (before rounding) $ 58.33

Times number of eligible familymembers x 4

Equals Eligible Subsidy = $ 233

Chapter 8: Case Study 2- Bennett

prorated rent calculation ph56
Prorated Rent Calculation (PH)

Public Housing Maximum Rent $600

Minus Eligible Subsidy - 233

Equals Revised TTP = $367

Minus Utility Allowance - 50

Equals Prorated Tenant Rent = $317

  • The Jones family will pay $117 more in rent (317-200) due to the presence of two ineligible members.

Chapter 8: Case Study 2- Bennett

prorated flat rent ph
Prorated Flat Rent (PH)
  • If a mixed family requests flat rent instead of income based rent and the flat rent is less than the Public Housing maximum rent, then the flat rent needs to be prorated (unlikely)
  • Formula found in Appendix 3 of form HUD-50058 Instruction Booklet

Chapter 8: Case Study 2- Bennett

prorated flat rent ph58
Prorated Flat Rent (PH)
  • First compare the unit Flat Rent with the PHA maximum rent.
    • If maximum rent is less than or equal to flat rent, do not prorate flat rent
    • If maximum rent is greater than flat rent, must follow the steps in Appendix 3

Chapter 8: Case Study 2- Bennett

mixed family flat rent maximum rent example 1
Mixed Family Flat Rent > Maximum RentExample 1
  • Mary Jones, a mixed family, asks for Flat Rent
    • Flat Rent is $700
    • PHA Maximum Rent is $500
  • Since Flat Rent is greater than Maximum Rent, use Flat Rent with no proration

Chapter 8: Case Study 2- Bennett

mixed family flat rent maximum rent example 2
Mixed Family Flat Rent < Maximum RentExample 2
  • Johnny James, a mixed family, asks for Flat Rent
    • Flat Rent is $550
    • PHA Maximum Rent is $600
    • Total number in family = 5
    • Total number eligible = 4
  • Since Maximum Rent is greater than Flat Rent, proceed with proration of Flat Rent

Chapter 8: Case Study 2- Bennett

mixed family flat rent example 2
Mixed Family Flat Rent: Example 2
  • Maximum Rent $ 600
  • Minus Flat Rent - 550
  • Equals Family Maximum Subsidy =$ 50
  • Maximum Family Subsidy $ 50
  • Divided by total number in family / 5
  • Equals = 10
  • Times total number eligible x 4
  • Equals Eligible Subsidy =$40

Chapter 8: Case Study 2- Bennett

mixed family flat rent example 262
Mixed Family Flat Rent: Example 2

PHA Maximum Rent $ 600

Minus Eligible Subsidy - 40

Equals Prorated Flat Rent $ 560

  • The James family will pay $10 more in flat rent (560-550) due to the presence of one ineligible family member.

Chapter 8: Case Study 2- Bennett

monitoring review

Monitoring Review

Chapter 8: Case Study 2- Bennett

bennett case study process overview64
Bennett Case Study:Process Overview

Ground Rules

  • Objective: complete case study
  • Time: Approximately 1 hour
  • Work individuallly
  • Trainer and trainer aides will assist if needed
  • Please keep noise volume to a minimum

Chapter 8: Case Study 2- Bennett

bennett case study process overview65
Bennett Case Study:Process Overview

Instructions for Part 1

  • Review PHA file data and complete Appendix C (Tenant file review worksheets)

Chapter 8: Case Study 2- Bennett

bennett case study process overview66
Bennett Case Study:Process Overview
  • Resources for case study
    • Case information begins page 8-13
    • Verifications (pg 8-23)
    • Appendix C, Tenant File Review Checklist Worksheets (pg 8-41)
    • Cubzide PHA Policies/Schedules (pg 6-5)

Chapter 8: Case Study 2- Bennett

bennett case study process overview67
Bennett Case Study:Process Overview

Instructions for Part 2

  • Review PHA’s HUD 50058 (Handout)
  • Complete Appendix A, Tenant File Review Checklist to record discrepancies

Chapter 8: Case Study 2- Bennett

annual income table answer
Annual Income Table Answer

Chapter 8: Case Study 2- Bennett

dwelling unit utility allowance worksheet
Dwelling Unit/ Utility AllowanceWorksheet
  • What did you put for the Total Utility Allowance?

Chapter 8: Case Study 2- Bennett

adjusted income worksheet answer
Adjusted Income Worksheet Answer

Chapter 8: Case Study 2- Bennett

adjusted income answer
Adjusted Income Answer

Chapter 8: Case Study 2- Bennett

adjusted income answer72
Adjusted Income Answer

Chapter 8: Case Study 2- Bennett

adjusted income answer73
Adjusted Income Answer

Chapter 8: Case Study 2- Bennett

adjusted income answer74
Adjusted Income Answer

Chapter 8: Case Study 2- Bennett

total tenant payment answer
Total Tenant PaymentAnswer

Chapter 8: Case Study 2- Bennett

prorated ttp and tenant rent answer
Prorated TTP and Tenant Rent - Answer

Chapter 8: Case Study 2- Bennett

review appendix a
Review Appendix A
  • Discussion

Chapter 8: Case Study 2- Bennett

thinking points
Thinking Points
  • PH Maximum Rent
    • Has the PHA established PH Maximum Rent using HUD formula?
  • Third party verification
    • Has the PHA documented why it was unable to obtain third party verification if review of documents was used?

Chapter 8: Case Study 2- Bennett

thinking points79
Thinking Points
  • Imputed welfare –
    • Has PHA received all needed information from welfare?
    • Does PHA correctly offset amount of imputed welfare income when additional amounts come into the family after sanction begins?

Chapter 8: Case Study 2- Bennett