Appendix A - Annual and Adjusted Income
Annual income means all amounts, monetary or not, which:
- Go to, or on behalf of, the subsidized participant household; or
- Are anticipated to be received from a source outside the participant during the 12-month period following admission or annual reexamination effective date; and
- Annual income also means amounts derived (during the 12-month period) from assets to which the participant has access.
Annual income includes, but is not limited to:
- The full amount, before any payroll deductions, taxes or other voluntary or non-voluntary deduction, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services;
- The net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight-line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the participant;
- Interest from assets, including interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the participant. Where the participant has net participant assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net household assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD;
- The full amount of periodic payments received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a periodic amount;
- Payments in lieu of earnings, such as unemployment and disability compensation, workers compensation and severance pay (except as provided in paragraph (c)(3) of this section);
- Welfare assistance to include Alaska Temporary Assistance and Public Assistance;
- Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling;
- All regular pay, special pay and allowances of a member of the Armed Forces (except as provided in paragraph (c)(7) of this section).
Annual income does not include the following:
- Lump-sum additions to participant assets, such as inheritances, insurance payments (including payments under health and accident insurance and workers compensation), capital gains and settlement for personal or property losses;
- Amounts received by the participant that are specifically for, or in reimbursement of, the cost of medical expenses for any participant member;
- The full amount of student financial assistance paid directly to the student or to the educational institution, including Title IV Work/Study wages;
- The special pay to a participant member serving in the Armed Forces who is exposed to hostile fire;
- Amounts received under training programs funded by HUD;
- Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS);
- Amounts received by a participant in other publicly assisted Programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific Program;
- Amounts received under a resident service stipend. A resident service stipend is a modest amount (not to exceed $200 per month) received by a resident for performing a service for AHFC or OWNER, on a part-time basis, that enhances the quality of life in the development. Such services may include, but are not limited to, fire patrol, lawn maintenance, and resident initiative coordination. No resident may receive more than one such stipend during the same period of time;
- Incremental earnings and benefits resulting to any participant member from participation in qualifying State or local employment training Programs (including training Programs not affiliated with a local government) and training of a participant member as resident management staff. Amounts excluded by this provision must be received under employment training Programs with clearly defined goals and objectives, and are excluded only for the period during which the participant member participates in the employment training Program;
- Temporary, nonrecurring or sporadic income (including gifts);
- Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era;
- Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household and spouse);
- Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in prospective monthly amounts.
- Amounts received by the participant in the form of refunds or rebates under State or local law for property taxes paid on the dwelling unit; or
- Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance Programs that includes assistance under any Program to which the exclusions set forth in 24 CFR 5.609(c) apply.
Adjusted income means annual income less the following deductions:
- $400 for any elderly participant or disabled participant;
- For any elderly participant or disabled participant:
- That has no disability assistance expenses, an allowance for medical expenses equal to the amount by which the medical expenses exceed three percent of annual income;
- That has disability assistance expenses greater than or equal to three percent of annual income, an allowance for disability assistance expenses plus an allowance for medical expenses that is equal to the participants medical expenses;
- That has disability assistance expenses that are less than three percent of annual income, an allowance for combined disability assistance expenses and medical expenses that is equal to the amount by which the sum of these expenses exceeds three percent of annual income.
- Income information. Means information relating to an individuals income, including:
- All employment income information known to current or previous employers or other income sources that HUD, the OWNER, or AHFC determines is necessary to determine an applicants or participants eligibility for, or level of assistance in, a covered program;
- All information about wages, as defined in the States unemployment compensation law, including any Social Security Number; name of the employee; quarterly wages of the employee; and the name, full address, telephone number, and, when known, Employer Identification Number of an employer reporting wages under a State unemployment compensation law;
- With respect to unemployment compensation:
- Whether an individual is receiving, has received, or has applied for unemployment compensation,
- The amount of unemployment compensation the individual is receiving or is entitled to receive; and
- The period with respect to which the individual actually received such compensation; (4) Unearned IRS income and self-employment, wages and retirement income as described in the Internal Revenue Code, 26 U.S.C. 6103(l)(7); and (5) Wage, Social Security (Title II), and Supplemental Security Income (Title XVI) data obtained from the Social Security Administration.
- Net Family assets.
- Net cash value after deducting reasonable costs incurred in disposing of real property, savings, stocks, bonds, and other forms of capital investment, excluding interests in Indian trust land and excluding equity accounts in HUD homeownership Programs. The value of necessary items of personal property such as furniture and automobiles shall be excluded.
- 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 participant 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. Any income distributed from the trust fund shall be counted when determining annual income.
- Include the value of any business or participant assets disposed of for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the Program or reexamination, as applicable, in excess of the consideration received therefore. In the case of a disposition as part of a separation or divorce settlement, the disposition will not be considered as less than fair market value if the applicant or tenant receives important consideration not measurable in dollar terms. There is no asset limit in the Program, but all applicable asset income, combined with all other income, shall determine applicant and participant eligibility.
- Temporary, nonrecurring or sporadic income (including gifts). These shall mean:
- Non-reoccurring cash gifts of less than $500.00, or non-cash, non-interest bearing gifts;
- Sporadic employment in which there is no means of verification.