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The Earned Income Disregard (EID): An Overview

The Earned Income Disregard (EID): An Overview. LSNC Housing Task Force February 6, 2004 Adapted from the National Housing Law Project’s EID Packet (2002) See www.nhlp.org/html/pubhsg/eid_packet.htm. What is the EID?.

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The Earned Income Disregard (EID): An Overview

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  1. The Earned Income Disregard (EID): An Overview LSNC Housing Task Force February 6, 2004 Adapted from the National Housing Law Project’s EID Packet (2002) See www.nhlp.org/html/pubhsg/eid_packet.htm

  2. What is the EID? • Enacted as part of Quality Housing and Work Responsibility Act of 1998 (QHWRA) (Sec. 508(b); 42 U.S.C. 1437a(d) • Requires Public Housing Authorities and some owners, in calculating rent, to temporarily “disregard” increased income earned when certain public housing residents and disabled participants in certain housing assistance programs return/go to work or job-related programs

  3. Purpose of EID • To remove disincentives for public housing and some disabled tenants in certain other housing programs to seek employment

  4. Why is EID advocacy important? • Many PHAs, tenants and advocates are confused by or poorly informed about EID • Failure to enforce EID rights means • Those who can least afford it are actually losing income to which they’re entitled • Barriers or disincentives to employment • Evictions for families who are forced to pay higher rents they don’t owe in the first place

  5. Programs to which EID applies (See 42 USC 1437a(d)(3)(A); 24 C.F.R. 960.255 and 5.617) • Public Housing • Households with a disabled person with earned income participating in any of the following programs • Section 8 Voucher Program (24 CFR 982) • HOPWA (Housing Opportunities for Persons with AIDS) (24 CFR 574) • HOME Investment Partnership Program (24 CFR 92) • Supportive Housing Program (24 CFR 583)

  6. Who potentially qualifies for the EID? • Households whose income increased due to • a previously unemployed household member now working (24 CFR 960.255(a) and 5.617(b) • working household member who is currently receiving or received welfare benefits (24 CFR 960.255(a)(iii)) • household member participation in a self-sufficiency or job training program (24 CFR 960.255(a)(ii))

  7. For how long is income disregarded? • 100% of increased income from earnings for 12 months (24 CFR 960.255(b) and 5.617(c) • 50% for an additional 12 months (Id.) • Lifetime 48-mo. period limit from time EID first goes into effect (Sec. 960.255(b)(3) and 5.617(c)(3)) • Clock starts running on date PHA would have otherwise raised the rent (Id.)

  8. Example of EID time calculation • Family member is unemployed for 12 mos. • Becomes employed, but fails to report increased income for 3 mos. • Family would have 9 mos of 100% EID (12 minus 3) and 12 mos of 50% EID for use within 45 mos (48 minus 3)

  9. More about households with previously unemployed members • Family member must have been unemployed for one or more years (42 USC 1437a(d)(3)(B)(i); 24 CFR 960.255(a)(i)) • No limit on duration of previous unemployment. Id. • “Previously unemployed” means person has not earned in the past 12 mos more than the equivalent of 500 hrs. work at the greater of federal or state minimum wage. 24 CFR 960.255(a)

  10. More about households with members who received or are receiving welfare • Must be currently on welfare or received welfare in past six months. 42 USC 1437a(d)(3)(B)(iii); 24 CFR 960.255(a)(iii) • Monthly payments or other payments OK so long as equal to at least $500 over the 6 mo. period. 24 CFR 5.617(b) • Work-related welfare sanction does not disqualify person from EID. FAQs re 65 F.R. 16, 16692 (3/29/2000), Sec II.C. Q8.

  11. More about households with members who received or are receiving welfare (cont’d) • See rules for rent-setting taking into account welfare income reduced for fraud or economic self-sufficiency requirements. 24 CFR 5.615(b)(1)

  12. More about household members participating in self-sufficiency programs • Household may qualify if income increases due to and during member’s participation in job training or “economic self-sufficiency” program.42 USC 1437a(d)(3)(B)(ii); 24 CFR 960.255(a)(ii) • Definition includes any program designed to assist tenant in gaining financial independence. 24 CFR 5.603(b) • Includes job training, English proficiency, substance-abuse programs and more. 24 CFR 5.603(b)

  13. Additional EID info/issues • Household can qualify for new EID after participating in old EID (18 month) program--not counted against 48 mo. Limit. HUD FAQ Section II.C. Q 33. • PHAs are permitted to offer individual savings accounts for purchasing home, education costs and other things in lieu of EID. 42 USC 1437a(d); 24 CFR 960.255(d)

  14. EID Resources • National Housing Law Project EID packet, includes EID statutes and regulations, HUD FAQs, sample intake questions, descriptions of EID advocacy and EID articles - http://www.nhlp.org/html/pubhsg/eid_packet.htm • Look for direct link to NHLP EID packet and HUD FAQs on the LSNC Housing webpage in the near future

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