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Foster Adults and Foster Children in Section 8

The discussion of Foster Adults and Foster Children has come up a lot in recent affordable housing conversations.  The confusion stems from the changes in policy as we transition from TRACS 202C to the TRACS 202D release.  I have found that in some of my classes when I have asked my attendees if any income from a foster child or foster adult is counted, more often or than not they say “No”.  Once it is explained that unearned income is counted it seems to jog their memory.   Income inclusion is not the only issue regarding Foster Children and Foster Adults.  Below is a summary of the current HUD regulations regarding both Foster Children and Foster Adults:1. Include both foster adults and foster children when considering unit size.

2. Include both foster adults and foster children when considering HUD income limits.

3. The number of expected foster children (Expected Family Addition-Foster Children) now also counts for income limit purposes.

4. Include earned income of foster adults; exclude earned income of foster children (since they are under 18 years of age).

5. Include unearned income of both foster adults and foster children.

(#4 and #5 are unchanged from prior guidance.)

6. Foster adults and foster children are NOT counted as dependents.

7. Foster adults’ and foster children’s medical expenses are included when the household is eligible for the medical expense allowance.

8. Disability expenses for foster adults and foster children are eligible for the disability expense allowance (assuming all other eligibility requirements are met).

9. Childcare expenses for foster children under the age of 13 are allowable, assuming all other eligibility requirements are met.

10. Foster children and foster adults must meet Social Security number disclosure and documentation requirements.

11. Foster children and foster adults must comply with immigration status documentation requirements.

12.  Special Status Codes and the Student Status field now apply.

The immigration status piece does mean that fosters count in both the numerator and denominator of any non-citizen rule proration and they also impact the filling of the Household Assistance Status code on the cert.

Finally, if you were to have a foster adult who is a full time student with earned income, the employment income is capped at $480 per the HUD regulations.

Also, the current version of TRACS 202C will produce errors if you follow this guidance.  Changes that require software edits, especially TRACS programming changes, are delayed.   Please remember that Site software needs to be compliant in 202C as of March 1–however, as you say, TRACS will generate lots of errors.

Here’s the question:  If the owner is to cap earned income of a foster adult who is a FT student at $480, how does this actually work since foster adult can never be considered a dependent? If the o/a can’t classify this individual as a dependent, does user simply enter $480 for earnings (assuming the individual earns at least that amount annually) for a foster adult?

Good question and the answer as to how to do it probably depends on your software.

First of all, the $480 cap is unrelated to reporting someone as a dependent. Back in the day, Other Adult full-time students were just that–Other Adults with a student flag set. The $480 cap applied then as well. Only later did HUD ask that they be reported as dependents.  The cap comes from the HUD regulations and is not tied to dependent status but is tied to status as a family member. Now that fosters are family, the regulation draws in a foster adult with earned income and who is a full-time student.

There are two ways to do this, both of which are acceptable. You can report the full earned/employment income and let the software cap it (if it does) or you can enter a max of $480. Generally software that automates the cap will report the full amount of the income but only bring 480 down to the total.

Can you just point out to me the proper citation for the $480 earned income limitation for foster adults that are FT students in case we are cited? I reviewed the 4350.3 and 202D docs but I must be missing it.

Since the regulations are a higher authority than the HUD handbook, the controlling regulation is in the Federal Register 24CFR 5.609 on income. Under income exclusions we have this:

“(11) Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household and spouse)”

This is in a to-be-published revision of the TRACS 202D spec–not in the handbook.  Find out more in our HUD Occupancy class or on the subject of Tenant Income, Asset and Expense

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