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Tenant Income or Asset–SS Direct Express Cards

The Department of the Treasury has decided that the Electronic Payments via the Direct Express Cards are the best way to distribute benefits.  This decision has created some question as to how HUD and Owner/Agents of affordable housing should count these payments as Income or if it should be counted as an Asset…or what about both?  People who already receive Social Security benefits by check must switch by March 1, 2013.  Encourage your tenants to do this now and not wait until the last minute.

Section 8 tenants have options of continuing to receive paper checks have the option of Direct Deposit to a financial institution account of their choice or the next option is the Treasury’s Direct Express® Debit Master Card (issued by Comerica Bank) program or what is called an Electronic Transfer Account.  Advantages and enrollment information are available online at   or by calling the U.S. Treasury Electronic Payment Solution Center at (800) 333-1795

The Department of the Treasury has determined that for SS/SSI beneficiaries, this is the safest and most reliable method of payment delivery.  For taxpayers it provides significant savings because the Treasury will no longer incur the annual $120 million price tag associated with paper checks and will save Social Security $1 billion over the next 10 years.

What is the effect on HUD affordable housing recipients and how should this type of payment solution be handled by property managers?  So far the word from HUD is that these accounts are to be treated as checking accounts, with average six-month balance required for verification.   While a normal checking account allows the owner of the account to make deposits into the account, this can only be used for withdrawals.

Some Owner/Agents have raised the questions as to how the Direct Express Card can be treated as an asset.  A concerned property manager in the field tells me “It really isn’t an asset. It is an electronic means of spending their SS check.  These accounts are funded each month with the tenants’ SS monthly benefit – which is their income. So, if we count this monthly benefit as income, and then list the account’s avg. 6 month balance as an asset, isn’t that “charging” the tenant twice?

I responded by telling the property manager that there is no difference with how any income is treated.  A tenant takes their income, deposits it into their checking/savings account and we treat that asset accordingly.  So how is this any different than direct deposit of a tenant’s salary being deposited into their checking account? Your salary is treated the same way.

There is one troubling aspect and that is when a tenant takes money out of their account using the ATM they are now charged an ATM fee.   Receiving paper statements each month will also cost the card holder $9 per year (.75 each month).

That being said, most of elderly tenants do not use computers and therefore will not access their statements online. Charging a Section 8 recipient an ATM fee to get their money is terrible. What happens when tenants use their one free transaction and take out all the money?  Then you have a vulnerable person walking around with a lot of money – which is what this is supposed to circumvent.

O/A’s will need to contact Direct Express for third party verification.  As of now there is a charge to obtain this verification.    Perhaps in the near future HUD will accept a self-certification for the 6 month average balance for these cards.

This presents a concern over the verification process for HUD Section 8 Owner/Agent’s.  Can you send the verification forms to a Direct Express address or to a Comerica Bank address? Is there a single, clearinghouse address that is used for verification purposes nationally? I know recipients can access account information online, but you will still have to make attempts at 3rd party verification.

This whole idea also prompts us to think about how to address this during the applicant and recertification interviews.  Your recertification questionnaire should include some specific questions regarding potential accounts which may be used to receive federal benefits.

You may find during the applicant/recert interviews that you may need some extra time to explain who these Social Security Direct Express Cards will be handled and how it affects their Tenant Rent.  Fine out more from out Tenant Income Asset and Expense class:

1 comment to Tenant Income or Asset–SS Direct Express Cards

  • Follow Up to this Article – RHIIP Listserv Posting #296 February 27, 2013

    Welcome to the MULTIFAMILY HOUSING RENTAL HOUSING INTEGRITY IMPROVEMENT PROJECT (RHIIP) LISTSERV that brings you up-to-date RHIIP related publications, news, information and occupancy tips in an effort to help reduce errors in rent determinations and subsidy calculations.

    Social Security Benefits Move Fully Electronic
    Effective by March 1, 2013

    Clarification on the Treatment of the Direct Express Debit Card

    The U.S. Social Security Administration has a new policy which will eliminate the option for Social Security and SSI recipients to receive their benefits in the form of paper checks beginning on March 1, 2013. Recipients will continue to have the option to use direct deposit for their benefits or they may choose to receive a “Direct Express Debit Card.” The debit card is automatically loaded with a recipient’s benefits on the appropriate payment day of each month. The card is not associated with the recipient’s bank account and funds cannot be added to the card by the card holder.

    We have received several inquiries about the Direct Express Debit Card and how it will affect income and asset calculations for tenants of HUD subsidized properties. In order to remain consistent with HUD regulations, benefits received through direct deposit OR the Direct Express Debit Card will continue to be treated as income. The balance on the Direct Express Debit Card is also considered an asset and will be verified consistent with existing savings account verification requirements. Specifically, tenants who receive their benefit on a Direct Express Debit Card will need to provide an account balance no more than 120 days old at the time of recertification. This balance can be obtained from an ATM, though the online account service, or a paper statement. The verification document must identify the account and the account holder. If the total household assets do not exceed $5,000, no income will be derived from this asset. If household assets exceed $5,000, assets should be imputed at the standard rate of 2%.

    For more information, please visit the SSA website at:

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