Section 8 Child Support Deduction and Verification

I have never been a single parent so I can only speculate through the experience of my friends that it is not an easy task.  Collecting Child Support can also be a difficult process because you are somewhat powerless as to whether you are going to be able to collect those funds from the working parent who owes that to his child/children.  In most cases you have to rely on the court to establish what those payments are and how much the child is to draw from the perhaps absent parent who objects to paying since they aren’t getting the visitation they feel they deserve.  It’s a vicious cycle which often plays out in affordable housing where the property manager needs to consider the child support as income.  In the case where the in place tenant claims they are not getting the child support payments, verification of that information is warranted.   Now we have to determine how much to include as income from the child support payment.

In the case a tenant receives child support, the state deducts insurance once a month from one of his/her weekly payments and the tenant thinks we should only count that part which he/she receives, not the gross amount which includes what the state takes for insurance.

If money is withheld by the state each month from Child Support payments for insurance, you must still use the gross amount.  If the tenant paid the child support himself, he would be writing a check. Apparently, the state is assisting him by making his payments for him.

When it comes to verification it is very clear in the HUD Handbook, Change 4:

In Exhibit 4-1: There is a sample list of records and documents that Owners/Agents

may ask Applicants to bring to the Certification or Recertification Interview, and in regard to child support – it stipulates a copy of court order.

In the 4350.3 rev. 1, chg. 4, HUD Occupancy Handbook, Chapter 5: Determining Income & Calculating Rent (5-6, F):

Alimony or Child Support

Owners must count alimony or child support amounts awarded by the court unless the applicant certifies that payments are not being made and that he or she has taken all reasonable legal actions to collect amounts due, including filing with the appropriate courts or agencies responsible for enforcing payment.

1. The owner may accept printouts from the court or agency responsible for enforcing support payments, or other evidence indicating the frequency and amount of support payments actually received.

2. Child support paid to the custodial parent through a State child support enforcement or welfare agency may be included in the family’s monthly welfare check and may be designated in different ways. In some states these payments are not identified as separate from the welfare grant. In these states, it is important to determine which portion is child support and not to count it twice. In other states, the payment may be listed as child support or as “pass-through” payments. These amounts must be counted as annual income.

3. When no documentation of child support, divorce, or separation is available, either because there was no marriage or for another reason, the owner may require the family to sign a certification stating the amount of child support received.

Also there is this passage (5-10, F):

 “No Deduction for Alimony or Child Support Paid to a Person outside the Assisted Family

There is no deduction for an amount paid to a person outside the assisted family for alimony or child support. Even if the amount is garnished from the wages of a family member, it must be included in annual income.”

 Please NOTE: Other income the household receives, e.g., welfare benefits, most pensions, child support, etc., may be reported in annual income in TRACS but it is not used for the discrepancy analysis in the Enterprise Income Verification System (EIV).

If a tenant says they are not getting the child support payments and it is verifiable then the tenant should not have that included as Income.  I think it is always important in affordable housing to remember that you need to verify what a tenant has and what they say they don’t have!

We offer classes on the NEW HUD Occupancy Handbook rules and we also offer a class on Income, Assets and Expenses, click on the link below to register

http://www.AHTCSonline.com/regform.php