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The Earned Income Disallowance - More Money in the Pockets of Some Public Housing and Disabled Tenants

 

On October 1, 1999, the federal Department of Housing and Urban Development (HUD) started an Earned Income Disallowance (EID) program for residents of public housing. Some people with disabilities who have Section 8 rental assistance vouchers are also eligible. Disabled people who get rental assistance through the HOME, HOPWA, or Supportive Housing programs are also eligible for the EID.

The program is mandatory. Public housing authorities must provide it to people who are eligible. It is a lot like another EID program that helped some public housing tenants in the early 1990s. That program kept many working people from having to pay rent increases for months or even years. The EID can do the same thing for public housing residents and some disabled people who have just gone back to work, or who were working part-time and are now working full-time. It can mean they will be able to keep hundreds or thousands of dollars that they have earned, instead of paying rent increases to the housing authority or landlord. It may even keep some people from being evicted.

Adults who live in public housing and the disabled people described in the first paragraph of this article are eligible for the EID if they also fall into any one of these three groups:

  • The person’s income increased because the person went back to work after being unemployed for 12 months. The law says that people can still be called “unemployed,” even though they really worked part of the time, as long the total amount they earned over the last 12 months was less than what they would make if they worked 10 hours per week for 50 weeks at the minimum wage. A person living in New Jersey would be eligible for the EID if he or she made $2,575 or less during the past year.

or

  • The person’s income went up because of money the person earned while taking part in a job-training or economic self-sufficiency program.

or

  • The person’s annual income increased because the person got a job or a raise while receiving welfare (TANF) benefits. A person who started earning more money within six months of getting off welfare would also be eligible. A person would even be eligible if he or she were off welfare, but had still received some kind of cash benefits, child care, or other kinds of help (except food stamps/SNAP and Medicaid) during any part of the six months before getting a raise or a job. The only other requirement is that the person had to receive a total of at least $500 in welfare or other benefits. (For example, two monthly checks of $322 would be enough because the total is more than $500.)

How the EID Works

The rent that public housing tenants or voucher holders usually have to pay is based on their income. If their income goes up, the rent goes up. But tenants who are eligible for the EID will not have to pay some rent increases. For up to a year or two, some of the extra money they earn each month will not be counted when rent increases are figured out. All of the extra family income earned at work will not be counted for 12 months. And half of any extra family income earned at work will not be counted for another 12 months.

Every person over 18 years old who lives in the apartment is eligible for the EID. This means that the extra earnings of several family members could be covered by the EID at the same time or at different times over a period of months or years, depending upon when they made the extra money.

And the person does not have to work for 12 months or 24 months straight to get the full benefit for the EID. Only the months with extra earnings are counted toward the 24-month total. Months when the person is unemployed do not count. (The rent should go down in those months because the person’s income has gone down.) But the EID program does have one time limit. If a person does not use all 24 months of EID benefits within four years after the first month they start getting it, the unused months will be lost. The clock begins to run with the first month the rent would have been increased without the EID.

There are some other important things about the EID. One is that people who got the “old” EID during the ‘90s can also get the “new” EID. Another is that the housing authority can give tenants Individual Savings Accounts (ISAs) instead of the EID. If the housing authority chooses to do this, tenants who are eligible for the EID will pay the full rent increase. But the housing authority will put the increase into a special savings account in the tenant’s name. The account will pay interest and be taken care of by the PHA. The money in the account will belong to the tenant, but it can only be taken out for a few reasons: to buy a house, or to pay for education, or to move out of public housing, or some other purpose that the housing authority says will help a person become self-sufficient.

The EID could even help some tenants who are threatened with eviction by the housing authority for nonpayment of rent. This is because some housing authorities have not made sure that all of the tenants who are eligible for the EID actually get it. If a tenant can show that his or her rent would have been lower if the housing authority had done its job and given the tenant the EID, the housing authority will have to figure out what the tenant would have saved and take it off the amount it claims the tenant owes. This could be enough to prevent the tenant from being evicted.

All public housing tenants and eligible disabled rental assistance recipients should have been told about the EID by the housing authority. If you were not told, you should go to the housing authority and ask about it. If you have any questions, contact your local Legal Services program and ask them to help you find out whether the housing authority is doing all it should be doing. Remember, the EID can save you hundreds or thousands of dollars. Make sure you get what you are entitled to.

 

This article originally appeared in the April 2004 issue of Looking Out for Your Legal Rights ®.

This information last reviewed April 2009.

This information last reviewed 1/18/12.

 

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