81. What is the shelter deduction and how is it calculated?

The shelter deduction is capped at $672 per month for households that do not include an elder, disabled adult or disabled child, regardless of how high the shelter costs are.

If the household includes at least one person who is elderly (age 60+) or is disabled, there is no limit or cap on the shelter costs that exceed 50% of net income.

• monthly rent paid that you pay or you owe, including the amount you are responsible for if you sublet or share an apartment. If you have a rent subsidy, only the amount of rent you pay should be reported;
• mortgage fees, including payments on the principal, interest, legal fees, home improvement loans (even if you are behind in payments) and condo fees. If you pay mortgage quarterly or semi-annually, list your monthly average;
• property taxes and homeowner insurance (even if you have no mortgage);
• trailer payments not made on a credit card and trailer parking fees;
• repair costs on your home or condo needed as a result of a fire, flood, severe storms or other natural disaster and not reimbursed by insurance (e.g. a new boiler, new roof, replacement of windows, etc.);
• shelter expenses for a home not occupied by you if you are planning to return to it, not renting it and had to leave because of employment and training away from home, illness or a natural disaster, and any current occupants are not claiming a shelter deduction for SNAP purposes; and
• the appropriate standard utility allowance (SUA) for your household. See the Standard Utility Allowance and Heat and Eat. Actual utility costs and heating costs are not allowed as they are covered under the SUA.

SNAP rules on shelter costs: 106 C.M.R. §364.400(G)(1)

Step 1: Calculate your preliminary net income – gross monthly income after subtracting the earned income deduction (including any child support paid out, see the child support exclusion), standard deduction, any dependent care, and allowable medical costs.

Step 2: Calculate the shelter deduction by adding your non-utility shelter costs (rent, mortgage) to your standard utility allowance (SUA).

Step 3: Divide your preliminary net income in half.

Step 4: Subtract the result in Step 3 from the result in Step 2. The result is your excess shelter cost. If the answer is zero or less, you do not get shelter deduction. If the answer is more than $672, you can deduct only $672 unless the household includes a person who is 60 or older or disabled.

Example

Carl works part time and earns $1,500 per month. He lives with his wife Cindy and their child. The family pays $800 per month in rent and pays for heat and utilities. Here’s how DTA calculates Carl’s shelter costs to determine his net income.

Preliminary net income 
$1,500      Carl’s Gross earned income
-    300      20% earnings deduction from gross
-    198      Standard deduction for household of 3
= $1,002   Preliminary net income

Shelter deduction calculation
$ 800      Rent
+  852      SUA
= $1,652  Shelter expenses

-  501      One-half preliminary net income (1/2 of $1,002)
= $1,151   Shelter expense > half net income

-  672      Maximum shelter deduction (capped)
= $330    Net income for Carl’s family (preliminary net income minus max shelter deduction)

See Appendix G for links to the DTA’s BEACON Online Guide for this section.