Special Issues

Produced by Massachusetts Law Reform Institute
Last updated April 2019

What if I have high medical costs?

If you have high medical expenses, you may be entitled to deduct these expenses from your income before your rent is determined. To do this you will need to keep very good records about your medical expenses—what you have paid and what you anticipate paying.

If an unanticipated major medical expense comes up during the course of the year, let the housing authority know as soon as possible so that a rent adjustment can be made. See Whencan I ask for a decrease in rent?

Deductible medical expenses include:

Bills which are paid or reimbursed by third parties (such as Medicaid or Medicare) are not deductible.

Federal public housing

If you live in federal public housing, you are allowed to deduct the amount of medical expenses that are over 3% of your annual income, but only for a family member who is 62 or over or a family member who has a disability.37 The best way to show the housing authority what your medical expenses may be in the coming year is to bring in your medical bills from the past year. Make sure that you do not submit the same medical bill twice.

Note:

The housing authority in Boston has established a deduction for extraordinary medical expenses for all families in federal public housing, not just for elderly or disabled families.

In addition, if you live in federal public housing, you are allowed to deduct unreimbursed expenses related to the care of a disabled family member necessary to allow another family member to work. This can include the cost of attendant care or auxiliary apparatus. Only the portion which exceeds 3% of annual income is deductible, and the deduction may not exceed the employment income of the family member who would otherwise be available to provide this care. If this amount by itself does not exceed 3% of your annual income, it can be combined with the medical expense deduction listed in the previous paragraph.38

State public housing

If you live in state public housing, you are allowed to deduct the amount you have actually spent on unreimbursed medical expenses for any family member in an amount that is over 3% of your gross income.39

In addition, households living in family housing in which a tenant is elderly or has a disability are permitted a yearly household deduction of $400.40 This does not apply if you live in elderly/disabled housing. It also does not apply if you are overhoused in family housing.

Finally, if a household member has a disability, payments for reasonable and necessary housekeeping or personal care services may be deducted. This applies to both family and elderly/disabled housing.

If I get child support, will it be counted towards my rent?

Yes. In general, all child support that you receive, whether through a court order or by informal arrangement, will be counted as income for purposes of calculating your rent.

If you stop getting child support, ask the housing authority to lower your rent as soon as you stop receiving the support. See When can I ask for a decrease in rent?.

For example

If part or all of the child support you received is going directly to the Department of Transitional Assistance (DTA) because you receive TAFDC, let the housing authority know so that your child support is not counted twice.

If you stop receiving TAFDC and start getting child support you should also let the housing authority know right away.

Often, there is a problem as to how to verify the loss of the child support. The best way to show the loss of child support for your family is through the Massachusetts Department of Revenue’s Child Support Enforcement (CSE) Division. The CSE tracks almost every child support payment made in the state, whether through income assignment or otherwise.

You can get information about your payment history from the Child Support Enforcement Division's website.

You will need a security code, or a PIN (Personal Identification Number), to get into your account. Once you gain access to your account, you will be able to see the payment history, which you should print out and bring to the housing authority. If you do not have access to the Internet, you can request payment history by calling CSE’s Voice System at 800-332-2733. More information about CSE is available at www.cse.state.ma.us.

Sometimes families get informal child support, either instead of a court order or in addition to a court order. Typically these payments will be considered income if they can be considered regular gifts coming into the household.

For example

If the non-custodial parent is regularly giving you $100 in cash to help with the kids, the housing authority can count that as income. But if the other parent only occasionally buys your children clothes, that is likely to be seen as a sporadic gift and will not be counted.

When are lump sum amounts not counted towards rent?

A lump sum is a one-time payment. When a housing authority calculates your rent, some lump sum amounts are not counted as income. Lump sum amounts that are not counted as income are still considered assets and the interest earned on them in future years will be counted as income. For more about assets, see Are assets counted as income?.

If you live in federal or state public housing, the following lump sum payments are not counted as income in the year received when determining rent:

  • Irregular gifts, inheritances, life insurance proceeds
  • Payments from insurance, worker’s compensation, or court judgments or settlements that compensate for loss or personal injury
  • Returns on investments (return of capital).

Federal public housing

If you live in federal public housing, the following types of lump sum payments are counted as income when determining your rent:

  • Deferred periodic payments from SSI and SSDI, or deferred periodic Veterans Affairs (VA) disability payments.43

Are assets counted as income?

In general, if something is considered an asset, its value is not added to your yearly income when determining your rent. But, if you have access to the income that is produced by the asset, the income that is earned from the asset will be counted when determining rent.

Under federal public housing rules, the following should be treated as assets:42

Assets do not include necessary personal property, such as clothing, furniture, and cars.

Under federal and state rules, if the total value of your assets is $5,000 or less, the housing authority will count the actual income earned. If the value is more than $5,000, the housing authority will count either the actual interest earned or the HUD-established interest or the DHCD-established interest—whichever is higher. For example, if you have a bank account with more than $5,000, the housing authority is required to act as if you have earned interest, even if you haven’t. State and federal agencies tell housing authorities what rate of interest to use.45

If you sell an asset or make a withdrawal, some or all of the proceeds may be treated as income in the year you sell the asset. This will likely depend on whether the payment is considered a capital gain for tax purposes.46

Asset issues in public housing are sometimes quite complicated. You may want to seek the help of a legal services or community advocate if the issue is not a simple one.

If I pay for any utilities, does that affect my rent?

If you pay for some or all of your utilities, your rent will be affected. Utilities generally include electricity gas, and oil but not telephone or cable TV. There are different rules for state and federal public housing.

State public housing

If you live in elderly/disabled public housing, your rent will be the following:

If you live in family public housing, your rent will be the following:

Federal public housing

If you live in any kind of public housing (family or elderly/disabled), your rent is 30% of your adjusted income minus a utility allowance for any utilities you pay.48

Each housing authority establishes its own utility allowance, based on a reasonable approximation of utility consumption. The housing authority must review these allowances every year. 49

If there is a utility rate change (including fuel) which results in a change of 10% or more from when utility allowances were last determined, your housing authority is required to update the utility allowance.50

In some cases, tenants’ apartments are not individually metered for utilities (and the tenant is not billed by the utility company), but housing authorities have what are called checkmeters. Checkmeters tell the housing authority what your utility use is. If your utility use is higher than the utility allowance, your housing authority can impose a surcharge (extra charge) for any utility consumption which is in excess of the utility allowance.

Even if you are not billed for utilities and there are no checkmeters for your apartment, a housing authority can impose a surcharge for utility use associated with tenant-owned major appliances, such as freezers and air conditioners. 51

If you think that your utility allowance is too low or the housing authority’s utility surcharge too high, you can request that the housing authority make the appropriate adjustment. Your request must be based on reasonable grounds, such as a special need for people who are elderly, ill, or have a disability or special factors affecting utility usage that are not within your control.

Use your most recent utility bills to establish your need for an adjustment. Ask your housing authority for information about the process by which an adjustment may be requested. When you first move in and when your housing authority gives you notice of utility allowances, it is required to give you notice of these procedures.52

If I have no income, can I be charged rent?

Yes. Both federal and state public housing programs can charge minimum rents to households even if they have no income. For federal programs, the minimum rent can range from $0 to $50 a month53. For state housing programs, the minimum rent is $5 a month.54

If you do not have any income as defined in What is counted as income?, a housing authority may conduct a more detailed survey into how you maintain your household. Failing to report income can get you into trouble. All reported income, however, is not used in the determination of your rent level. See What is not counted as income?.

For both federal and state public housing, if you are facing a hardship, you can ask the housing authority to suspend (temporarily not charge) waive (not charge) the minimum rent.55 You do this by applying for what is called a hardship exemption or waiver. You can apply for a hardship exemption if you lose your income because your situation changed, such as loss of a job or death of a family member. You can also apply if paying the minimum rent would be a hardship for you. However, depending on your situation, you may later have to repay the amount that had been suspended.

There are two types of hardship: short-term and long-term. If the hardship is expected to last less than 90 days, you qualify for a short-term hardship and charges are suspended for the time being. You do not have to pay the minimum rent for the period of time that the suspension covers. When the short-term hardship expires, you can work out a payment plan to repay the amount you owe. If the hardship lasts more than 90 days, you qualify for a long-term hardship. The rent charges for the prior 90-day suspension period are waived, and the waiver continues until you have income. If you are granted a long-term hardship, you do not have to pay the minimum rent at all.

All housing authorities must give tenants notice about how to apply for the hardship exemption.56 If you need to apply, contact your housing authority. If you apply for a hardship exemption, the housing authority cannot evict you for not paying the minimum rent.

If I work and my rent increased a lot, what can I do?

If you or a member of your household begin to work while you are living in public housing and you were previously not working, you may be eligible for a program that “freezes” your rent. If you are eligible, your rent will be frozen for a certain period of time at the amount it was when you were not working. In other words, any new income you earn from working will not be counted when calculating your rent. This benefit applies to both part-time and full-time work. If you think you qualify, use the sample rent freeze letters to request a rent freeze.

In federal public housing, this benefit is called the self-sufficiency incentive.59
(it is also sometimes called the earned income disregard).60

The self-sufficiency incentive was substantially cut back by HUD in 2016. While it is still currently available, it will ultimately be phased out under legislation adopted by Congress in 2016.61 However, as with other rent changes made by that legislation, HUD will first need to issue proposed regulations and get public comment.62 In state public housing, it is called the earned income exclusion.63

Federal public housing

If you or any adult household member live in federal public housing, you or that person can get the rent freeze or self-sufficiency incentive if:

  • Unemployed for one or more years before getting the job; or
  • Earned less than $6,000 over the 12 months prior to getting the job (for example, if you worked for $12.00 per hour, which is minimum wage in Massachusetts in 2019, for 10 hours per week, 50 weeks per year, you would qualify); or
  • Received welfare benefits or participated in a welfare-to-work program within 6 months before getting the job, or
  • Got the job while in a job training or self-sufficiency program.64

The above information is true for the head of household, as well as any member of the household. While the incentive is “lifetime” for each household member, it is possible over time for different household members to each claim an earned income exclusion if each qualifies.

To qualify for a rent freeze, it is acceptable to show that a person meets only one of the criteria listed above; it is not necessary to show that you meet all of them. When you get a rent freeze, for the first 12 months after you start working, all income related the increase in income from your job cannot be counted towards your rent, so your rent stays the same. In the second 12 months, your housing authority can count towards rent only half of your total work earnings.65 This means a total of 24 months of a full or partial rent freeze.

For those first seeking the rent freeze after May 9, 2016, you must use your exclusion within 24 months of becoming employed. If at some point you become unemployed, the clock stops. Once you start work again, the clock restarts and you get whatever time was left of the 24-month period. Those who qualified for and sought the benefit prior to May 9, 2016 may use the 24 months within 48 months of becoming unemployed.

Example

If you worked for 12 months starting in September 2016, then got laid off for 6 months, and then worked for 12 months, all of the increased employment income for the first 12 months would not be counted when setting your rent; 50% of the increased employment income would not be counted for 6 months of the second 12-month period, but the exclusion would be over by September 2018 and the last 6 months of your employment, full income would be counted. Keep in mind, if you receive any unemployment income while you are not working, this will be counted when calculating your rent.

State public housing

If you live in state public housing, you can get a rent freeze or earned income exclusion if:

With this exclusion, for 12 months, all income related to your job cannot be counted towards your rent. In other words, your rent will stay the same. You can qualify for this benefit only once while living in state public housing.61

If you or another household member are 62 years or older, working and living in state public housing, the housing authority must exclude a portion of your income when determining your rent. The portion that is excluded cannot exceed an amount that equals 20 hours per week at minimum wage (approximately $160 per week).62

Endnotes

35 . HUD PIH Notice 05-37.

36 . . See Public Housing Occupancy Guidebook, page 124. See also endnote 30.

37 . 42 U.S.C. § 1437a(b)(5)(A)(ii 24 C.F.R. § 5.611(a)(3). As defined in 24 C.F.R. § 5.100, “elderly person” means an individual who is at least 62 years of age.

38 . Attendant 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. Auxilary 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 animals. See Public Housing Occupancy Guidebook, page 124.

39 . 760 C.M.R. § 6.05(4)(e). See also DHCD Public Housing Notice 2007-10

40 . 760 C.M.R. § 6.05(4)(a).

41 . 24 C.F.R. § 5.609(c)(14).

42 . See 24 C.F.R. § 5.603 for the definition of net family assets.

43 . In cases where a trust fund has been established and the trust is not revocable by, or under the control of, any member of the family or household, the value of the trust fund will not be considered an asset so long as the fund continues to be held in trust per definition of net family assets, 24 C.F.R. § 5.603.. See also HUD Multifamily Occupancy Handbook, 4350.3 for more about how trusts can be structured in the context of multifamily housing.

44 . For state public housing, such one-time payments are treated as income and used in the computation of rent only if received during a period of time when you lived in public housing. 760 C.M.R. § 6.05(3)(b). The same argument can be made in federal public housing, but the rules are less clear.

45 . State: 760 C.M.R. § 6.05(2)(c Federal: 24 C.F.R. § 5.609(b)(3). HUD’s current nationwide passbook interest rate is 2.0%. See Public Housing Occupancy Guidebook, page 122, footnote 35. Subsequent to the publication of the Guidebook, HUD issued frequently asked questions on the rent determination; FAQ 30 indicates that each field office establishes the passbook savings rate to be used by PHAs within its jurisdiction and that this method will remain in effect until superseded by a PIH Notice: www.hud.gov/offices/pih/programs/ph/rhiip/faq_gird.

46 . In federal multifamily housing, it is clear that withdrawals from IRAs are not considered income. HUD Multifamily Occupancy Handbook, 4350.3 CHG-1 (Aug. 2004), Chapter 5. . Although this handbook is for residents in federal multifamily housing, one could advocate that IRAs in public housing be treated similarly.

47 . G.L. c. 121B, §§ 32, 40(b Elderly/handicapped: G.L. c. 121B, § 40(b 760 C.M.R. § 6.04(1)(a Family housing: 760 C.M.R. § 6.04(1)(b).

48 . 42 U.S.C. § 1437a(a)(3)(A 24 C.F.R. § 960.253(c)(3).

49 . 24 C.F.R. §§ 965.505, 965.507(a).

50 . 24 C.F.R. § 965.507(b).

51 . Any schedule of charges must be based on estimated utility consumption and must be subject to notice and comment by tenants before it is adopted or reviewed. 24 C.F.R. § 965.506.

52 . The housing authority’s criteria and procedure for granting relief from insufficient utility allowances or utility surcharges must be adopted at the time utility allowances are adopted and all tenants must be given notice of this. 24 C.F.R. §§ 965.502(c), 965.508.

53 . 42 U.S.C. § 1437a(a)(3)(A 24 C.F.R. § 5.630.

54 .G.L. c. 121B, § 32. DHCD has issued no regulations or notices about minimum rents.

55 . State: G.L. c. 121B, § 32; Federal: 42 U.S.C. § 1437a(a)(3)(B 24 C.F.R. § 5.630(b). The state statute is modeled on the federal statute.

56 . Fed. Reg., Vol. 64, No. 32, February 18, 1999, pp. 8192 and 8198; Fed. Reg., Vol. 64, No. 83, April 30, 1999, p. 23344.

57 . 24 C.F.R. § 960.255. Find more information about the mandatory earned income disregard from HUD at: www.hud.gov/offices/pih/phr/about/ao_faq2.cfm.

58 . 760 C.M.R. § 6.05(3)(i).

59 . 24 C.F.R. § 960.255(a).

60 . 24 C.F.R. § 960.255(b).

61 . 760 C.M.R. § 6.05(3)(i).

62 . G.L. c. 121B, § 32; 760 C.M.R. § 6.05(3)(p). You can find the current minimum wage in Massachusetts at: www.mass.gov by typing into the search box "minimum wage."

  • Payments or co-payments for services of doctors or other health care professionals;
  • Hospitalization, clinic, or treatment costs;
  • Medical or dental insurance premium costs;
  • Out-of-pocket prescription drug costs and costs of non‑prescription medicines which are doctor recommended;35
  • Costs for dental care/work, eyeglasses, hearing aids (including batteries), special footwear which is medically required;
  • Transportation to medical treatment; (including parking and IRS mileage to and from the medical appointment); 37
    • Irregular gifts, inheritances, life insurance proceeds
    • Payments from insurance, worker’s compensation, or court judgments or settlements that compensate for loss or personal injury
    • Returns on investments (return of capital).
    • Deferred periodic payments from SSI and SSDI.41
    • Bank accounts (savings or checking
    • Stocks, bonds, treasury bills, certificates of deposit;
    • Real property, including real estate;
    • Other capital investments;
    • Trust funds;43
    • One-time payments such as inheritances, life insurance proceeds, capital gains, and payments for injury or damages under workers compensation, insurance, or court awards. (If, however, the one-time payment is to replace earnings in some way, it will generally be counted as income.44 )
    • If all utilities are included in rent, your rent = 30% of net income
    • If you pay some or all utilities, your rent = 25% of net income
    • If all utilities are included in rent, your rent = 32% of net income
    • If you pay some, but not all utilities, your rent = 30% of net income
    • If you pay all utilities, your rent = 27% of net income.47
    • You were unemployed for one or more years before you got your job; or
    • You earned less than $4,000 over the 12 months prior to getting your job (for example, if you worked for $8.00 per hour, which is minimum wage in Massachusetts in 2009, for 10 hours per week, 50 weeks per year, you would qualify or
    • You received welfare benefits or participated in a welfare-to-work program within 6 months before getting your job, or
    • You got your job while you were in a job training or self-sufficiency program.59
    • Before you got your job you received either TAFDC (Transitional Aid to Families with Dependent Children), EAEDC (Emergency Aid to Elders, Disabled and Children), SSI (Supplemental Security Income), or SSDI (Social Security Disability Insurance) for 12 months in a row immediately prior to beginning your job; and
    • Once you started working, your government cash benefit assistance decreased.

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