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Income Changes

 

When must I report changes in my household’s income?

Required yearly reporting

If you live in federal or state public housing, you are required to report your household’s income and composition at least once a year. Some housing authorities calculate the annual reporting date based on the anniversary of your move-in date. Others check incomes for all tenants at the same time. The information you give the housing authority must be accurate.

For state public housing, this is called the annual redetermination of rent;66 for federal public housing this is called reexamination.67. Both state and federal public housing also refer to this as recertification.

 

Additional or interim reporting

In both federal and state public housing, there are rules about reporting income increases between yearly rent recertifications. This is referred to as interim reporting.

 

In federal public housing, each housing authority can set its own interim reporting policy for when you must report changes in your family’s income and household composition. This policy must be spelled out in your lease.68 Read your lease carefully. It will tell you of any deadlines for reporting income changes. If your income goes down, it is a good idea to report this immediately. See When can I ask for a decrease in rent?.

Some housing authorities do not require reporting, while others do if the household income goes up by a certain amount. In state public housing, you are required to report when there is any increase in your household’s monthly gross income by 10% or more from what you last reported. Generally, you must report this by the 7th day of the month following the month in which the increase occurred.69 Check your lease for the exact reporting requirements. (If the increase was anticipated in the prior calculation of your rent, you do not have to report it.)

Example

If in January you reported at the yearly rent redetermination that your household’s gross income was $15,000, and in May your household’s income increased by $1,500, you are required to report this to the housing authority by June 7th.

In addition, if you live in state public housing and you receive any lump sum payment of income later than it normally would have been paid (such as payment of past-due workers’ compensation benefits, SSI or SSDI lump sums, or retroactive salary increases) and this income was not previously counted in determining your rent, you must report this within 7 days. The housing authority may impose a one-time retroactive rent charge on this amount and the tenant must pay that charge within 30 days.70 Some housing authorities have obtained permission from the state housing agency to have different rules on interim reporting, so check your lease.71

Flat rents

If you live in federal public housing and have chosen a flat rent, required reexamination of your family’s income occurs once every 3 years, not once a year.72 You may, however, ask the housing authority to tell you what the income-based rent would be to see if you would do better with a flat rent or an income-based rent.73 The housing authority can ask you to give income information so they can make this calculation.74

If my income goes up and I do not report this right away, can I get in trouble?

Maybe. It depends on what your lease says. Even though you have a yearly income check (recertification), you may have to report increases in your income throughout the year when they happen. See When must I report changes in my household's income? about interim reporting. If you do not report the change in income as required by your lease, two things could happen (depending on what’s in your lease):

  • The housing authority could try to charge you for the back rent that could have been charged if there had been proper reporting.75 This is sometimes called a retroactive rent increase. See Can the housing authority increase my rent if I have paid it?. The housing authority may also try to charge you interest or a late payment penalty on the unpaid amount.76

  • The housing authority could try to evict you for failure to properly report your income. You may be able to prevent your eviction in court if the failure to properly report an income increase was for good cause or the amount of the unpaid rent is relatively small in comparison to the rent that normally would have been paid.77

If you had a good reason for not reporting certain income, make sure you let the housing authority know this. For example, if you did not think that certain income counted, or you misunderstood your lease, or a family member did not tell you about a change in income, tell the housing authority this. While it is likely you will have to pay back what is owed, the housing authority may agree to not charge a penalty or may agree to stop the eviction and instead give you a reasonable payment plan.

For federal public housing, many housing authorities use a computer program operated by U.S. Housing and Urban Development’s (HUD’s) called the Enterprise Income Verification system. Housing authorities use this computer matching system to identify families who have unreported income. Housing authorities can get the following information: new hire information, quarterly wage, employer information, quarterly unemployment compensation, monthly Social Security and Supplemental Security Income (SSI) benefits, and Medicare deductions.78 State public housing also has a computerized system called Wage Match that allows housing authorities to verify income information for adult household members against the state Department of Revenue records.79

What should I do if my income changes a lot during the year?

The housing authority sets your rent based on anticipated income.80 That means that it must make its best guess about what your income is going to be for the next 12 months.

Usually the housing authority will rely on information from your employer about what you have earned to date and are likely to earn over the next 12 months. Sometimes it will calculate based on an average of recent paystubs, including overtime.

If you think the housing authority has incomplete information, or does not accurately show what your income is likely to be for the next year, you should try to give the housing authority better information. If you provide updated information to the housing authority and it still sets your rent higher than you think it should be based on the information you have submitted, you have the right to request a grievance hearing. For more about filing a grievance, see Using Your Public Housing Grievance Procedure.

If you work only a certain number of months each year (a common situation with those who work in schools, for example), you have two options for rent:

  • You can ask that your 10-month income be stretched over the 12-month period. This would result in a lower rent than would otherwise be the case in the months that you work, but a higher rent in the months you are not working; or
  • You can ask to have your rent calculated for the 10-month period that you are employed, and then request a rent decrease for the months that you are not employed.

The same applies to changes in overtime or in hours of employment. If your rent was set initially based on certain assumptions about overtime or hours and you end up doing substantially less overtime or have your hours reduced, you should request a change in your rent. If, on the other hand, fluctuations in your hours or overtime were built into the initial rent calculation (the housing authority averaged out the information, and that average hasn’t really changed), there would be no basis for an adjustment.

Can the housing authority retroactively increase my rent?

State public housing

If you live in state public housing, a housing authority can increase your rent retroactively (going back in time), but in only two circumstances:

  • If you did not properly report your income, deductions, exclusions, or household composition as required by the lease, and the housing authority later discovers the mistake.81
  • If you did not complete your recertification in a timely manner, the housing authority can make a rent increase back to the time that the recertification would have taken effect. This applies to both the yearly recertification and any interim recertification required by the lease.82

If, on the other hand, you gave the housing authority the proper information in a timely manner, but the housing authority failed to process it, the rent increase can be effective only for a future date.

Federal public housing

If you live in federal public housing, there are no specific rules about whether rents can be increased retroactively. That policy is left up to each housing authority.83 The policy must be stated in your lease.

What kind of notice am I supposed to get about a rent increase?

State public housing

If you live in state public housing, the housing authority must give you at least 14 days written notice of a rent increase prior to the increase, and the rent increase must be effective on the first day of a month.84 This rule applies unless the housing authority has received permission from the Department of Housing and Community Development (DHCD) to adopt a different rule.

Advance notice is not required, however, if you did not properly or timely report any income or income changes in the past, and the housing authority later discovers this error and corrects it. See Can the housing authority retroactively increase my rent?.

Federal public housing

The federal rules leave this policy to each housing authority to set, and the policy must be in your lease.85

When can I ask for a decrease in rent?

As soon as you know of a change in your circumstances—like a loss of income, loss of child support, or a change in deductible expenses listed in What household expenses must be deducted before setting rent? or a change in your family or immigration status that would reduce your pro-rated rent—you should let the housing authority know and ask to have your rent recalculated.86

To protect yourself, put your request in writing and include:

  • Information about the change in your circumstances; for example, that your work time went down from 20 to 10 hours per week; and
  • The month in which the income change happened.

Write on your request the date you are notifying the housing authority. This date is very important in terms of establishing when the decrease should happen.

Make a copy of your letter for your records. Then go to the housing authority office and give them your written request. Ask them stamp or write the date that you are giving them the letter right on the letter. Then ask them to put it in your tenant file. Because you have put your request in writing and dated this letter (and kept a copy), it can be determined later when you first notified the housing authority of the change in your circumstances, even if you cannot provide third-party verification at the time.

If you live in federal public housing and are on a flat rent, the flat rent cannot be adjusted based on changes in your income. You can, however, ask to be switched to an income-based rent because of economic hardship. See Is my rent always based on my income?

If you are paying a minimum rent, you can ask for a hardship waiver if you are without income. See Question 11.

When should a rent decrease take effect?

If you did not report the income loss right away, the housing authority will usually have no obligation to make a rent adjustment for the time period before you informed them of the income loss. In some cases, however, where a disability is involved, the housing authority may be able to make what is called a reasonable accommodation and decrease the rent for the time before you told them about your income change.

If you reported your income loss immediately, the effective date of a rent decrease depends on whether you live in state or federal public housing.

State public housing

If you informed the housing authority immediately about a decrease in income, a rent decrease must become effective—at the latest—on the first day of the month following receipt of information verifying your change in income.87 The housing authority may wait until it obtains adequate verification of your change in circumstances and what your likely new income will be before making the rent change.

Adequate verification could be, for instance, a layoff letter from your employer or a notice from the welfare office about a decrease in your cash assistance. However, once the housing authority obtains adequate verification, it must make the rent change, and may make the rent decrease effective for an earlier date (the first day of the month following the decrease) if this is warranted by the circumstances that delayed receipt of verified information.88

Federal public housing

While each housing authority can set its own policy about when a rent decrease should become effective, federal regulations require that a housing authority act on a request within a reasonable time.89

After your notification to the housing authority, you should receive from the housing authority, at a minimum, a written notice stating the new rent, the effective date, and your right to request an explanation about how the rent was calculated. If you request an explanation, the housing authority should explain to you how the calculation was done, what was counted as income, and what deductions or exclusions were used. Some housing authorities include this information in the rent increase notice.

Advocacy tip:

If you and other tenants are involved in reviewing or commenting on housing authority policies, you may want to press for a policy where the rent decrease takes effect the first month after the change in circumstances is reported to the housing authority.90

What if I told the housing authority that my income went down, but they did not lower my rent?

First go to the housing authority office and ask them why they did not lower your rent. They could be waiting for verification of your income.

If the housing authority does not lower your rent after you speak with them, you can file a grievance in writing with the housing authority, stating that you want a hearing on their failure to lower your rent. To do this, write a short letter asking for a grievance hearing and submit it to the housing authority’s main office or the development’s management office. The housing authority should grant you a hearing after they get your letter. You will get a letter telling you when and where the hearing is.

When you go to the hearing, bring proof of your income. Be prepared to show when your income dropped and, if possible, bring evidence of when you told the housing authority about the change in your income. Tell the grievance panel or hearing officer that the law requires the housing authority to lower your rent when your income drops.

For more about filing a grievance, see Using Your Public Housing Grievance Procedure.

What papers do I need to prove my income?

The process of proving what your income is or what deductions you may be entitled to is called verification.91

As a tenant in public housing, you are required to provide reasonable and necessary documentation of your income and expenses. For example, for wages, interest, dividends, annuities, pensions, or other income, you may be asked to submit copies of your prior year’s tax forms (including W-2 forms, W-2G forms, and 1099 forms.)

Both state and federal public housing programs may also require verification of income, assets, and expenses directly from others—“third parties”—such as employers.

Be prepared—the verification process can be slow.

66 760 C.M.R. § 6.04(4).

67 24 C.F.R. § 960.257(a); 42 U.S.C. § 1437a(a)(1), (a)(2)(E).

68 24 C.F.R. § 960.257(b), (c); 24 C.F.R. § 966.4(c)(1). Also check the housing authority’s Public Housing Agency Plan and its Admissions and Continued Occupancy Plan. Residents have a right to review and comment on housing authority policy changes that affect federal public housing residents through the Public Housing Authority Planning Process.

69 760 C.M.R. § 6.04(5)(a).

70 760 C.M.R. § 6.04(9).

71 760 C.M.R. § 6.10.

72 24 C.F.R. § 960.257(a)(2); 24 C.F.R. § 960.253(e)(2); 42 U.S.C. § 1437a(a)(2)(E).

73 24 C.F.R. § 960.253(e)(2), (f). Note that the housing authority is obligated to provide sufficient information for families to make informed choices about rent options. If the family chooses a flat rent, the housing authority must provide the amount of income-based rent if an income reexamination is conducted or if the family makes a specific request and submits updated income information. See also 42 U.S.C. § 1437a(a)(2)(A)(i), stating that a public housing agency may not at any time fail to provide both flat and income-based rent options for any housing unit owned, assisted, or operated by the agency.

74 24 C.F.R. § 960.253(e)(2).

75 760 C.M.R. § 6.04(4)(d), (5)(a).

76 760 C.M.R. §§ 6.04(5)(a), (8), (9).

77 760 C.M.R. § 6.04(8).

78 Find more information about HUD’s Enterprise Income Verification system at: www.hud.gov/offices/pih/programs/ph/rhiip/uivsystem.cfm

79 DHCD Public Notice 2008-12 at: www.mass.gov/Ehed/docs/dhcd/ph/publicnotices/08-12.pdf

80 State: 760 C.M.R. § 6.04(4)(d); Federal: 24 C.F.R. § 5.609(a)(2).

81 760 C.M.R. § 6.04(4)(e), (5)(a).

82 760 C.M.R. § 6.04(4)(d).

83 24 C.F.R. § 966.4(b)(1)(i).

84 760 C.M.R. § 6.04(4)(d).

85 24 C.F.R. § 966.4(b)(1)(ii).

86 State: 760 C.M.R. § 6.04(5)(b); Federal: 24 C.F.R. § 960.257(b).

87 760 C.M.R. § 6.04(5)(b).

88 760 C.M.R. § 6.04(5)(b).

89 24 C.F.R. § 960.257(b).

90 This policy has been adopted by HUD for its multifamily privately owned subsidized housing. HUD Multifamily Occupancy Handbook, 4350.3 CHG-1 (Aug. 2004), Chapter 7 at 7-13.

91 State: 760 C.M.R. § 6.04(6); Federal: 24 C.F.R. § 960.259; 24 C.F.R. § 5.240.


Produced by Massachusetts Law Reform Institute
Last updated September 11, 2009


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