Section 3.4: Calculating Tenant Rent Payments

To determine the appropriate rent payment for an S+C participant, program operators need to follow these steps:

  1. Calculate 10 percent of monthly gross income.
  2. Calculate 30 percent of monthly adjusted income.
  3. Determine whether a welfare rent may apply, and, if so, determine the amount.
  4. Determine which of these three rent amounts is the highest.
  5. Set the participant's monthly rent contribution at this amount.

The definitions of annual gross income, adjusted income, and welfare rent and the allowable deductions and adjustments to income are described in detail in CPD Notice 96-3 and can also be found in regulation at 24 CFR Part 5 Subpart F. A few things to keep in mind when making these calculations are:

  • Types of income that must be included are employment income, social security, welfare assistance, unemployment benefits, and disability or worker's compensation.
  • Some income may be eligible for exclusion. Examples include income earned by children under age 18, payment received for the care of foster children or adults, and reimbursement for the cost of medical expenses. These amounts are subtracted from household income before the rent contribution is calculated.
  • The "disallowance of increase in annual income" provision in 24 CFR 5.617 does not apply to the S+C program.

Income Recertification Requirements

As required by statute, S+C program operators must reexamine participants' income at least annually and make any needed adjustments to the participants' rent contribution amount.

The S+C participant may request an interim reexamination if there is a change in family composition (such as the birth of a child) or a decrease in household income.

Participants whose income increases during the year do not have to have their rent increased until the next scheduled (annual) reexamination.

Documenting Rental Income

  • Program operators need to document the amounts of rental income collected from S+C participants and the method used to determine these amounts.
  • If a worksheet is used, it should clearly document how the rent contribution for each participant was determined.
  • Documentation of participants' sources of income should also be kept in the files.

Notes

The requirements for calculating rent payments for S+C participants are detailed in CPD Notice 96-3. The full text of this notice appears in Appendix E and is available on the website, HUDCLIPS. Changes to the Section 8 voucher program have no impact on the method for calculating tenant rent payments in the Shelter Plus Care Program.

Under the SRO component, a minimum rent of up to $50 can be imposed regardless of the outcome of the tenant contribution to rent calculation. However, the PHA, which must administer the rental assistance under this component, may waive the minimum rent requirement.

The citation found in the S+C Regulations has changed from 813.106 to 24 CFR part 5 Subpart F.