PART III: VERIFYING INCOME AND ASSETS Chapter 6, Part I of this plan describes in detail the types of income that are included and excluded and how assets and income from assets are handled. Any assets and income reported by the family must be verified. This part provides PHA policies that supplement the general verification procedures specified in Part I of this chapter.
7-III.A. EARNED INCOME Tips GFHA Policy Unless tip income is included in a family member’s W-2 by the employer, persons who work in industries where tips are standard will be required to sign a certified estimate of tips received for the prior year and tips anticipated to be received in the coming year.
Wages GFHA Policy For wages other than tips, the GFHA will require the family to provide the two most current, consecutive pay stubs totalling at least 28 days of employment. At the GFHA’s discretion, if additional pay stubs are needed due to the family’s circumstances (e.g., sporadic income, fluctuating schedule, etc.), the GFHA may request additional pay stubs or a payroll record.
7-III.B. BUSINESS AND SELF EMPLOYMENT INCOME GFHA Policy Business owners and self-employed persons will be required to provide: An audited financial statement for the previous fiscal year if an audit was conducted. If an audit was not conducted, a statement of income and expenses must be submitted and the business owner or self-employed person must certify to its accuracy. All schedules completed for filing federal and local taxes in the preceding year.
If accelerated depreciation was used on the tax return or financial statement, an accountant's calculation of depreciation expense, computed using straight-line depreciation rules.
The GFHA will provide a format for any person who is unable to provide such a statement to record income and expenses for the coming year. The business owner/self-employed person will be required to submit the information requested and to certify to its accuracy at all future reexaminations. At any reexamination the GFHA may request documents that support submitted financial statements such as manifests, appointment books, cash books, or bank statements.
If a family member has been self-employed less than three (3) months, the GFHA will accept the family member's certified estimate of income and schedule an interim reexamination in three (3) months. If the family member has been self-employed for three (3) to twelve (12) months the GFHA will require the family to provide documentation of income and expenses for this period and use that information to project income.
7-III.C. PERIODIC PAYMENTS AND PAYMENTS IN LIEU OF EARNINGS For policies governing streamlined income determinations for fixed sources of income, please see Chapter 11.
Social Security/SSI Benefits GFHA Policy To verify the SS/SSI benefits of applicants, the GFHA will request a current (dated within the last 60 days) SSA benefit verification letter from each family member that receives social security benefits. If the family is unable to provide the document(s), the GFHA will help the applicant request a benefit verification letter from SSA’s website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. Once the applicant has received the benefit verification letter they will be required to provide it to the GFHA.
To verify the SS/SSI benefits of participants, the GFHA will obtain information about social security/SSI benefits through the HUD EIV System, and confirm with the participant(s) that the current listed benefit amount is correct. If the participant disputes the EIV-reported benefit amount, or if benefit information is not available in HUD systems, the GFHA will request a current SSA benefit verification letter from each family member that receives social security benefits. If the family is unable to provide the document(s) the GFHA will help the participant request a benefit verification letter from SSA’s website at www.ssa.gov or ask the family to request one by calling SSA at 1-800-772-1213. Once the participant has received the benefit verification letter they will be required to provide it to the GFHA.
7-III.D. ALIMONY OR CHILD SUPPORT GFHA Policy The methods the GFHA will use to verify alimony and child support payments differ depending on whether the family declares that it receives regular payments.
If the family declares that it receives regular payments, verification will be obtained in the following order of priority:
Copies of the receipts and/or payment stubs for the 60 days prior to GFHA request
Third-party verification form from the state or local child support enforcement agency
Third-party verification form from the person paying the support
Family's self-certification of amount received
If the family declares that it receivesirregular or no payments, in addition to the verification process listed above, the family must provide evidence that it has taken all reasonable efforts to collect amounts due. This may include:
A statement from any agency responsible for enforcing payment that shows the family has requested enforcement and is cooperating with all enforcement efforts
If the family has made independent efforts at collection, a written statement from the attorney or other collection entity that has assisted the family in these efforts
Note: Families are not required to undertake independent enforcement action.
7-III.E. ASSETS AND INCOME FROM ASSETS Assets Disposed of for Less than Fair Market Value The family must certify whether any assets have been disposed of for less than fair market value in the preceding two years. The PHA needs to verify only those certifications that warrant documentation [HCV GB, p. 5-28].
GFHA Policy The GFHA will verify the value of assets disposed of only if: The GFHA does not already have a reasonable estimation of its value from previously collected information, or The amount reported by the family in the certification appears obviously in error.
Example 1: An elderly participant reported a $10,000 certificate of deposit at the last annual reexamination and the PHA verified this amount. Now the person reports that she has given this $10,000 to her son. The PHA has a reasonable estimate of the value of the asset; therefore, reverification of the value of the asset is not necessary.
Example 2: A family member has disposed of its 1/4 share of real property located in a desirable area and has valued her share at approximately $5,000. Based upon market conditions, this declaration does not seem realistic. Therefore, the PHA will verify the value of this asset. 7-III.F. NET INCOME FROM RENTAL PROPERTY GFHA Policy The family must provide:
A current executed lease for the property that shows the rental amount or certification from the current tenant
A self-certification from the family members engaged in the rental of property providing an estimate of expenses for the coming year and the most recent IRS Form 1040 with Schedule E (Rental Income).
If schedule E was not prepared, the GFHA will require the family members involved in the rental of property to provide a self-certification of income and expenses for the previous year and may request documentation to support the statement including: tax statements, insurance invoices, bills for reasonable maintenance and utilities, and bank statements or amortization schedules showing monthly interest expense.
7-III.G. RETIREMENT ACCOUNTS GFHA Policy The GFHA will accept written third-party documents supplied by the family as evidence of the status of retirement accounts. The type of original document that will be accepted depends upon the family member’s retirement status.
Beforeretirement, the GFHA will accept an original document from the entity holding the account with a date that shows it is the most recently scheduled statement for the account but in no case earlier than 6 months from the effective date of the examination.
Upon retirement, the GFHA will accept an original document from the entity holding the account that reflects any distributions of the account balance, any lump sums taken and any regular payments.
Afterretirement, the GFHA will accept an original document from the entity holding the account dated no earlier than 12 months before that reflects any distributions of the account balance, any lump sums taken and any regular payments.
7-III.H. INCOME FROM EXCLUDED SOURCES A detailed discussion of excluded income is provided in Chapter 6, Part I. HUD guidance on verification of excluded income draws a distinction between income which is fully excluded and income which is only partially excluded.
For fully excluded income, the PHA is not required to follow the verification hierarchy, document why third-party verification is not available, or report the income on the 50058. Fully excluded income is defined as income that is entirely excluded from the annual income determination (for example, food stamps, earned income of a minor, or foster care funds) [Notice PIH 2013-04]. PHAs may accept a family’s signed application or reexamination form as self-certification of fully excluded income. They do not have to require additional documentation. However, if there is any doubt that a source of income qualifies for full exclusion, PHAs have the option of requiring additional verification.
For partially excluded income, the PHA is required to follow the verification hierarchy and all applicable regulations, and to report the income on the 50058. Partially excluded income is defined as income where only a certain portion of what is reported by the family qualifies to be excluded and the remainder is included in annual income (for example, the income of an adult full-time student, or income excluded under the earned income disallowance).
GFHA Policy The GFHA will accept the family’s self-certification as verification of fully excluded income. The GFHA may request additional documentation if necessary to document the income source.
The GFHA will verify the source and amount of partially excluded income as described in Part 1 of this chapter.
7-III.I. ZERO ANNUAL INCOME STATUS GFHA Policy The GFHA will check UIV sources and/or request information from third-party sources to verify that certain forms of income such as unemployment benefits, TANF, SS, SSI, and earnings are not being received by families claiming to have zero annual income.
7-III.J. STUDENT FINANCIAL ASSISTANCE [Notice PIH 2015-21] Any financial assistance, in excess of amounts received for tuition, fees, and other required charges that a person attending an institution of higher education receives under the Higher Education Act of 1965, from private sources, or from an institution of higher education must be considered income unless the student is over the age of 23 with dependent children or is residing with parents who are seeking or receiving HCV assistance [24 CFR 5.609(b)(9) and FR 4/10/06].
For students over the age of 23 with dependent children or students residing with parents who are seeking or receiving HCV assistance, the full amount of student financial assistance is excluded from annual income [24 CFR 5.609(c)(6)]. The full amount of student financial assistance is also excluded for students attending schools that do not qualify as institutions of higher education (as defined in Exhibit 3-2). Excluded amounts are verified only if, without verification, the PHA would not be able to determine whether or to what extent the income is to be excluded (see section 7-III.H).
GFHA Policy For a student subject to having a portion of his/her student financial assistance included in annual income in accordance with 24 CFR 5.609(b)(9), the GFHA will request written third-party verification of both the source and the amount. Family-provided documents from the educational institution attended by the student will be requested, as well as documents generated by any other person or entity providing such assistance, as reported by the student.
In addition, the GFHA will request written verification of the student’s tuition, fees, and other required charges. If the GFHA is unable to obtain third-party written verification of the requested information, the GFHA will pursue other forms of verification following the verification hierarchy in section 7-I.B.
7-III.K. PARENTAL INCOME OF STUDENTS SUBJECT TO ELIGIBILITY RESTRICTIONS If a student enrolled at an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the income of the student’s parents must be considered when determining income eligibility, unless the student is determined independent from his or her parents or a vulnerable youth in accordance with PHA policy [24 CFR 5.612, FR Notice 4/10/06, p. 18146, and FR Notice 9/21/16].
This provision does not apply to students residing with parents who are seeking or receiving HCV assistance. It is limited to students who are seeking or receiving assistance on their own, separately from their parents.
GFHA Policy If the GFHA is required to determine the income eligibility of a student’s parents, the GFHA will request an income declaration and certification of income from the appropriate parent(s) (as determined in section 3-II.E). The GFHA will send the request directly to the parents, who will be required to certify to their income under penalty of perjury. The parents will be required to submit the information directly to the GFHA. The required information must be submitted (postmarked) within 10 business days of the date of the GFHA’s request or within any extended timeframe approved by the GFHA.
The GFHA reserves the right to request and review supporting documentation at any time if it questions the declaration or certification. Supporting documentation may include, but is not limited to, Internal Revenue Service (IRS) tax returns, consecutive and original pay stubs, bank statements, pension benefit statements, benefit award letters, and other official and authentic documents from a federal, state, or local agency.