What household expenses must be deducted before setting rent?

Produced by Massachusetts Law Reform Institute
Last updated April 2019

Before a housing authority sets your rent, it is required to subtract from your household’s gross or annual income certain deductions .

In general, state public housing has more deductions than federal public housing. While housing authorities can adopt additional deductions for federal public housing, they cannot add to the deductions listed below for state public housing25.

For example, the housing authority in Boston Housing Authority allows a deduction of extraordinary medical expenses for all families in federal public housing—not just for elderly or disabled families living in federal public housing.Somerville Housing Authority has deductions for certain part time students and for young working adults.

To see if your housing authority has adopted additional deductions for federal public housing, ask your manager or check your housing authority’s Admissions and Continued Occupancy Policy document26.

Federal public housing

If you live in federal public housing, you are entitled to the following deductions before your rent is set27: (be aware that Congress authorized some significant changes in deductions in 2016, but those changes have not yet been implemented, and won’t be until HUD issues new regulations)28

Elderly and Disabled Family Deduction

$400 per year for a family where the head of the household or spouse is 62 years of age or older or is a person with a disability.

Dependent Deduction

$480 per year for each dependent. This includes anyone who is:

  • Under the age of 18,
  • A full-time student, or
  • A person with a disability.

Medical or Disability Deduction

The amount over 3% of your annual income which you are likely to spend on unreimbursed medical expenses only for a family member who is 62 or over or who has a disability. Includes unreimbursed out-of-pocket costs for prescription drugs28.

The amount over 3% of your annual income which you are likely to spend on unreimbursed expenses for disability assistance for any family member with a disability which are necessary for that person’s employment. This includes attendant care and auxiliary apparatus29.

For more information about medical bills see What if I have high medical costs?

Child Care Deduction

Child care payments for children under age 13, if a family member is employed, looking for employment, or in school30.

State public housing

If you live in state public housing, you are entitled to the following deductions before your rent is set31:

Elderly and Disabled Family Deduction

$400 per year for a household living in family public housing where the person who signed the lease is either 60 years or older or has a disability (unless the household is overhoused ).

Family Deductions

  • $300 per year for each child under 18.
  • $300 per year for each adult who has income (other than head of household), if that adult’s gross income exceeds all his or her deductions.

Heat Deduction

A yearly heat deduction where tenant pays heat. The amount of the deduction is determined by the Department of Housing and Community Development ( DHCD )32.

Medical Deduction

Actual payments for necessary medical expenses not covered by insurance for any family member (including co-payments and insurance premiums) in excess of 3% of gross household income33.

Child and Family Care Deduction

Payments for care of children or sick or incapacitated household members if necessary for employment of another household member.

Support If Separated or Divorced

Child support or separate support, or alimony paid as a result of a court order to someone not living in the household.

Education Deduction

Non-reimbursable payments for tuition and fees for post-secondary education for household member who is not a full-time student.

Deductions for People with Disabilities

  • Non-reimbursable payments for reasonable and necessary housekeeping and personal care.
  • Certain travel expenses in connection with necessary activities which cannot be performed by another household member34.

25 42 U.S.C. § 1437a(b)(5)(B)(iii 24 C.F.R. § 5.611(b).

26To find out whether a housing authority has adopted additional federal rent deductions, you can also review the housing authority’s agency plan or its Admissions and Continued Occupancy Policy.

27 42 U.S.C. § 1437a(b)(5 24 C.F.R. § 5.611.

28HUD PIH Notice 05-37. A good guide to the types of expenses that can be deducted can be found through a publication from the Internal Revenue Service, found at: //www.irs.gov/pub/irs-pdf/p502.pdf.

29Attendant care includes: In-home care, nursing, housekeeping, errand service, interpreters for people who are hearing impaired, or a reader for a person with a visual disability, or costs associated with the keeping and caring of service or companion animals. Auxiliary apparatus includes: wheelchairs, walkers, scooters, reading devices for people with visual disabilities, equipment to add to cars and vans to permit their use by family members with a disability, or service or companion animals. See Public Housing Occupancy Guidebook, page 124. See also HUD Multifamily Occupancy Handbook, 4350.3 for more about service or companion animals in the context of multifamily housing.

30 In the case of child care necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income. 24 C.F.R. § 5.603(b). See also 42 U.S.C. § 1437a(b)(5)(A)(iii).

31 760 C.M.R. § 6.05(4).

32 In March 1, 1993, Carole Collins, Director of Housing Management at DHCD, issued a Schedule of Heat Deductions which is still in effect. The following is the schedule of annual deductions for those who separately pay for heat:

 
Bedroom Size 0 1 2 3 4 5 6
Amount $300 $400 $500 $600 $700 $800 $900

33 760 C.M.R. § 6.05(4)(e). See also DHCD Public Housing Notice 2007-10 at: www.mass.gov/Ehed/docs/dhcd/ph/publicnotices/07_10.pdf.

34 760 C.M.R. § 6.05(4)(j).

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