Income Eligibility and Rent in HUD Rental Assistance Programs: Responses to Frequently Asked Questions

Libby Perl
Specialist in Housing Policy

Maggie McCarty
Specialist in Housing Policy

The Department of Housing and Urban Development (HUD) administers five main rental assistance programs that subsidize rents for low-income families: the Public Housing program, the Section 8 Housing Choice Voucher program, the Section 8 Project-Based Rental Assistance program, the Section 202 Supportive Housing for the Elderly program, and the Section 811 Supportive Housing for Persons with Disabilities program. Together, these programs serve more than 4 million families and make up well over three-quarters of HUD’s budget. All five programs provide rental assistance in the form of below-market rent available to low-income individuals and families. While the programs vary in some important ways—how assistance is provided, who administers the assistance, whether the assistance is restricted to certain populations—they use many of the same or similar standards when establishing tenants’ income eligibility and their minimum contributions toward rent.

Families are generally eligible for HUD assistance if their incomes are below certain income standards set by HUD. Unlike the poverty measurement used by some other federal benefits programs that target low-income populations, income eligibility for HUD-assisted housing varies by locality and is tied to local area median income. Income, for the purposes of eligibility, is defined as income from all sources earned by all members of the family, with some exclusions (e.g., income earned by minors). Once a family is determined eligible for HUD assistance, the rent they pay is generally based on 30% of their adjusted income. Those adjustments include deductions for elderly and disabled families, certain medical costs, and certain child care costs. Families’ incomes, adjusted incomes, and contributions toward rent are typically recertified annually.

The current laws governing both income eligibility and tenant rents were standardized in the early 1980s, although the origins of the current policies date back earlier and are derived from experiences with the public housing program, which was the first federal rental assistance program.

The income and rent policies in the five primary HUD rental assistance programs are also used to some extent by other HUD programs such as the homeless assistance programs and the HOME Investment Partnerships program. Looking at non-HUD housing programs, the Department of Agriculture’s rural rental assistance program largely uses HUD’s income and rent policies, and the Department of Treasury’s Low-Income Housing Tax Credit program uses some HUD standards, but not all of them. Comparing HUD’s primary rental assistance programs to other federal assistance programs that serve similar populations, HUD’s programs differ in important ways; most notably, other assistance programs devolve more decision-making about income determination and eligibility to state administrators, whereas the HUD policies are largely set by federal statute and regulation.

While the income and rent policies that govern HUD’s five main rental assistance programs are designed to accurately calculate and capture family incomes and financial circumstances, they can also lead to confusion among recipients as well as difficulties for local program administrators. In response to the rather complicated rules, some policymakers have called for changes to the current system. This report provides answers to some of the most common questions about the income and rent policies in federal rental assistance programs, including questions about where these policies came from and how they compare to other federal assistance programs that serve the same or similar purposes or populations. It is intended to help answer commonly asked questions, as well as provide information to policymakers seeking to understand and evaluate proposed changes to the current system.


Date of Report: September 19, 2012
Number of Pages: 22
Order Number: R42734
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Temporary Assistance for Needy Families: Welfare Waivers

Gene Falk
Specialist in Social Policy

The Department of Health and Human Services (HHS) announced that it is willing to waive certain federal work participation standards under the Temporary Assistance for Needy Families (TANF) block grant to permit states to experiment with “alternative and innovative strategies, policies, and procedures that are designed to improve employment outcomes for needy families.” The major provision that HHS would waive is the numerical performance standards that states must meet or risk being penalized through a reduction in their TANF block grant. HHS announced this initiative on July 12, 2012.

The TANF statute provides that 50% of all families and 90% of two-parent families included in a participation rate are required to be engaged in work, though few states have ever faced the full standard because this percentage is reduced for certain credits. For all years from FY2002 through FY2006 and in FY2008 and FY2009, the majority of states had an effective (after-credit) TANF work participation standard of 25% or less. In FY2009, 22 states had their 50% all family standard reduced to 0% because of these credits. Additionally, many states have avoided the twoparent standard altogether by assisting that portion of their caseload with state funds not subject to TANF work standards.

To be considered engaged in work under the TANF standard, a family must either be working or in specified welfare-to-work activities for a minimum number of hours per week. Preemployment activities such as job search, rehabilitative activities, and education count for a limited period of time or under limited circumstances. Though these counting rules do not apply directly to individual recipients, they may influence how a state designs its welfare-to-work program. States that allow participation in activities that cannot be counted (e.g., job search or education in excess of their limits) do not receive credit for that participation and potentially risk failing the work standard.

The new waivers would permit states to have welfare-to-work initiatives assessed using different measures than the TANF work participation rate. Thus, states could test alternative welfare-towork approaches by engaging recipients in activities currently not countable without risk of losing block grant funds. States would have to apply for waivers, which must be approved by HHS and the Office of Management and Budget (OMB). States would also be required to monitor performance measures and evaluate the alternative welfare-to-work program. HHS also indicated it might waive some requirements that apply to states for verifying work activities.

The Government Accountability Office (GAO) has determined that the waiver initiative constitutes a “rule,” subject to the Congressional Review Act (CRA). On September 13, 2012, both the House Ways and Means and House Education and Workforce Committees ordered reported a “resolution of disapproval” (H.J.Res. 118). If this resolution is passed by Congress and signed by the President (or the President’s veto is overridden), the waiver initiative could not take effect.

The legislative authority cited by HHS to grant waivers in public assistance programs dates back to 1962, although the new initiative would allow the first new waivers to test welfare-to-work strategies in more than 15 years. “Waivers” have historically been important in welfare reform, and TANF let states continue their pre-1996 waivers until their expiration. The last such waiver expired in 2007.


Date of Report: September 13, 2012
Number of Pages: 33
Order Number: R42627
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Child Custody and Support: Frequently Asked Questions

Alison M. Smith
Legislative Attorney

Under the U.S. Constitution, Congress has little direct authority to legislate in the field of domestic relations. Generally, state policy guides these decisions. Despite the lack of direct authority to legislate domestic relations issues, Congress continues to enact federal laws that indirectly affect family law questions concerning child custody and support. This report answers questions frequently asked regarding the interplay between federal and state laws governing these areas.


Date of Report: August 17, 2012
Number of Pages: 9
Order Number: RS21091
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Worker Adjustment and Retraining Notification (WARN) Act: A Primer

Benjamin Collins
Analyst in Labor Policy

Enacted by the 100th Congress, the Worker Adjustment and Retraining Notification (WARN) Act requires qualified employers that intend to carry out plant closings or mass layoffs to provide 60 days’ notice to affected employees, states, and localities. The purpose of the notice to workers is to allow them to seek alternative employment, arrange for retraining, and otherwise adjust to employment loss. The purpose of notifying states and localities is to allow them to promptly provide services to the dislocated workers and otherwise prepare for changes in the local labor market.

The WARN Act applies to employers with at least 100 or more full-time employees or equivalents. Federal, state, and local government employers are not subject to the act.

Broadly speaking, there are three types of events that require notification under the WARN Act. Each of these events is limited to a single site of employment; employment losses by a single employer across multiple sites are not aggregated. Events that trigger the requirements of the WARN Act are

• a plant closing resulting in employment losses of at least 50 employees;
   
• a mass layoff of at least 50 employees where the employment loss consists of at least 33% of employment at the site; or
• a mass layoff with an employment loss of 500 or more at a single site of employment, regardless of its proportion of total employment at the site or if the employment loss is part of a plant closing. 

For the purposes of the WARN Act, an employment loss is defined as an involuntary termination, layoff exceeding six months, or a reduction in hours worked exceeding 50% for each of six consecutive months. In addition to the three events described above, an employer may also be subject to the WARN Act if it engages in several layoffs during a 90-day period that, in aggregate, meet the criteria of an applicable event. Short-term layoffs that are later extended to six months or more may also trigger WARN Act requirements.

The act and accompanying regulations also specify situations in which an otherwise covered employer may be exempt from WARN Act requirements. Generally, these exceptions relate to unanticipated situations such as unforeseeable business circumstances or natural disasters.

The WARN Act is enforced through the federal court system. While the Department of Labor is permitted to establish regulations related to the act and offer non-binding guidance to employers and workers, all penalties and settlements are administered through the courts.

This report does not provide information on how the WARN Act may apply to government contractors affected by the Budget Control Act of 2011 (P.L. 112-25). CRS issued a Congressional Distribution memorandum that discusses this issue on July 18, 2012. The memorandum was written by Benjamin Collins and Jon O. Shimabukuro and is available from either author.


Date of Report: September 10, 2012
Number of Pages: 11
Order Number: R42693
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Housing Issues in the 112th Congress

Katie Jones, Coordinator
Analyst in Housing Policy

As the 112th Congress began, the economy was no longer officially in recession. However, housing markets remain fragile, many economic indicators remain weak, and home foreclosure rates remain high. Against this backdrop, the 112th Congress has considered a number of housingrelated issues. Broadly speaking, these issues include long-term questions related to reforms to the housing finance system, short-term concerns related to ongoing turmoil in housing markets, perennial issues related to housing assistance programs, and possible reductions in funding for housing programs administered by the Department of Housing and Urban Development (HUD).

Given the role that housing played in the recent economic downturn, Congress has expressed interest in reforming the housing finance system to help protect the economy from similar problems in the future. In this vein, the 112th Congress has begun to consider long-term questions about the government’s role in housing finance going forward. Such questions include the future of Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) currently in government conservatorship, and the role of the Federal Housing Administration (FHA). The 112th Congress has also exercised its oversight powers with regard to the implementation of housing- and mortgage-related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203), which was enacted during the 111th Congress. Such provisions include ability to repay standards that apply to mortgage originators and risk retention standards that apply to asset securitizers. Many Members of Congress have expressed concern about the implications that some of these provisions could have for private mortgage lending and access to mortgage credit.

At the same time, the ongoing effects of the recent economic turmoil on consumers and housing markets raise questions about whether further government intervention is warranted in the short term to address ongoing foreclosure issues or to stimulate housing demand. The housing markets’ fragility has also led to debates about whether policy options considered by the 112th Congress to reduce government involvement in the mortgage market would have negative effects on the housing recovery.

Concerns about the nation’s budget deficit have led to increased calls for reduced government spending, and an environment of fiscal austerity will likely have implications for housing-related programs and activities along with other domestic discretionary programs. A law providing fullyear FY2011 appropriations was not enacted until several months into the 112th Congress, and that law included cuts to several HUD programs, including reduced funding for the Community Development Block Grant (CDGB) and HOME programs. Appropriations for FY2012 included further cuts to housing programs, although some specific programs saw increases in funding. The 112th Congress has also considered perennial issues related to housing for low-income and other vulnerable populations, including possible reforms to the public housing and Section 8 Housing Choice Voucher programs. The debate over the future of federal housing assistance programs has been affected, and will likely continue to be affected, by both the fiscal environment and the ongoing effects of the recent recession and turmoil in U.S. housing markets.

This report provides a brief summary of major housing issues that have been active in the 112th Congress. It does not provide comprehensive coverage of the issues or closely track active legislation, but it includes references to related CRS products that offer more detailed information and analysis.


Date of Report: September 13, 2012
Number of Pages: 31
Order Number: R42145
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