Shelter Costs 430-05-55-40

(Revised 10/01/06 ML3044)

View Archives

 

 

Monthly shelter costs in excess of 50% of net adjusted income after all other deductions are allowed, not to exceed $417.

 

Exception:

Households containing one or more eligible elderly or disabled members are not subject to the shelter deduction maximum of $417.  Households in which the only elderly or disabled members are excluded are subject to the shelter deduction maximum.

 

Only the most current bills can be used for verification of shelter costs. Past due amounts are not an allowable expense.  Only the billed amount can be allowed as a deduction.  

 

Example:

Household's monthly mortgage payment is $500 per month.  The household is paying $600 a month to pay the mortgage off sooner.  Only the $500 billed amount can be allowed as a shelter cost deduction.

 

Expenses need not be in the household’s name, but must be incurred by the household and the household must be expected to pay the expense.

 

If a non-household member pays the household’s shelter costs directly to the provider on behalf of the household, the worker must determine if the payment is a loan.

 

If the payment is a loan, it is excluded from income and the expense is allowed as a shelter deduction.

 

If the payment is not a loan, it is excluded from income and the shelter deduction is not allowed.

 

Example:

Tom owns his own home with a mortgage payment of $700.  Bill is Tom’s roommate and is claiming separate household status from Tom.  Bill pays $300 for his share of the housing costs directly to the mortgage company.  The $300 is not counted as income to Tom.  Tom’s allowable shelter expense for the mortgage is $400.

 

When separate households share shelter expenses and one receives a payment for shelter expenses from the other, the payment is not counted as income. Each household is entitled to its actual share of the shelter costs as a deductible expense.

Example:

Tom and Bill are roommates claiming separate household status. Bill pays Tom $200 a month for his share of the rent and Tom pays the landlord the $400 monthly rent. The $200 paid to Tom is not counted as income and each is allowed their share of the rent ($200) as a deductible expense.

 

Shelter costs covered by an excludable reimbursement or vendor payment are not allowable deductions.

 

Exception:

LIHEAP payments.

 

Example:

The portion of rent paid by HUD is not allowed.

 

Shelter costs include only the following:

1. Rent. Is allowed only if the household is responsible to make a money payment to someone outside of the household.  If there is a separate identifiable rental fee for a garage, appliances, furniture, etc., it is not allowed.

Exceptions:

1. If an individual works in exchange for rent with no option to be paid, no income is counted and no rent expense is allowed.  
2. If an individual works off part of the rent with no option to be paid, the amount that is worked off is not counted as income and the remaining amount is allowed as a rent expense.

The portion of rent paid by Housing Assistance Program (HAP) is not considered part of a household’s shelter expense.

 

If a certified group home resident has a single payment for room and meals, the amount of the payment that exceeds the Thrifty Food Plan (TFP) is a shelter expense. If a resident has a separate identifiable payment for room charges, that amount is used for the shelter deduction.

2. Mortgage Payment (including both first and second mortgages). Payments on second mortgages and home equity loans are allowable shelter costs regardless of why the money was obtained or how it was used.

When the Farm Service Agency (FSA) has placed a moratorium on a household's mortgage payment, the deduction for a FSA mortgage payment is not allowed during the moratorium period. After the moratorium has ended, the recalculated amount is allowed.

3. The shelter costs of an unoccupied home can be claimed if:

• The home is unoccupied due to employment or training away from home, illness or abandonment caused by a natural disaster or casualty loss, and
• The household intends to return to the home, and
• The current occupants, if any, are not claiming the shelter costs for food stamp purposes, and
• The home is not leased or rented during the absence of the household.

Exception:

A household is not entitled to any utility expenses for an unoccupied home.  

4. Condominium and association fees.
5. Mobile home lot rent.
6. Property taxes, State and local assessments (if not included in the mortgage payment). The most current year’s incurred amount must be verified. Always use the full amount regardless of when the taxes are paid or if taxes are discounted due to early payment. Taxes need not be paid. Penalties or past due taxes from prior years are not allowable.

Property taxes that are billed yearly must be allowed as a one-time payment or averaged over 12 months.

7. Homeowner Insurance (if not included in the mortgage payment). The most current year’s amount must be verified. Insurance need not be paid, only incurred.

If the bill separates contents, liability and structure costs, only the amount for the structure can be allowed. If the bill does not separate these costs, the entire amount is allowed.

 

Service fees charged by the insurance company for households who choose to pay their insurance other than yearly are an allowable deduction. Late fees are not an allowable deduction.

 

Renter insurance is not an allowable expense. Flood insurance is an allowable expense.

 

Homeowners insurance billed yearly must be allowed as a one-time payment or averaged over 12 months.

8. Utility expenses.  Households cannot claim actual utility expenses and are entitled to only one of the mandatory utility standards.  A household is not entitled to any utility expenses for an unoccupied home.

Households with a separate utility meter, even if the utility bill is not in their name, are entitled to one of the mandatory utility standards as long as they are expected to pay the utility bill.

 

Example:

A household is renting a home and is responsible for the heating costs; however, the bill is in the landlord’s name.  The landlord in turn gives the bill to the household each month for payment.  As the household is incurring the bill and there is a separate meter, the household is entitled to the standard utility allowance (HL SU).

 

Households that are billed by their landlord on the basis of individual usage or are charged a flat rate for utility costs separately from their rent are entitled to the appropriate standard.

 

Examples:

1. An individual lives in an apartment where there is a separate meter for heating costs.  The utility bill is not in the food stamp household’s name, but the household incurs these expenses and is expected to pay the bill.  The household is entitled to the standard utility allowance (HL SU).
2. An individual lives in a side-by-side duplex and there is only one meter for heating costs.  The owner of the duplex lives in one side and a food stamp household lives in the other side.  The landlord bills the food stamp household a flat rate of $200.00 per month separately from the rent for the heating costs.  The household is entitled to the standard utility allowance (HLSU).

 

If a household receives a HUD or FSA utility subsidy, the actual current utility bills must exceed the utility subsidy before the household is entitled to the appropriate standard.

 

Examples:

1. A household is responsible for heating costs and the monthly HUD utility payment is $150.  The household’s actual utility bills are:

 

As the actual utility bills exceed the HUD utility payment the household is entitled to the standard utility allowance (HL SU).

 

 

If the utility expenses do not exceed the HUD utility payment the household is entitled to no mandatory utility standard.

2. A household that is not incurring heating/cooling costs and is not eligible for LIHEAP receives a HUD utility payment of $15.  The household’s actual bills are:

 

 

As the actual utility bills exceed the HUD utility payment, the household is entitled to the limited utility allowance (LU SA)

 

If the HUD payment exceeds the actual utility bills, the household is entitled to no utility standard.

Exception:

If a household is planning to apply, has applied for, or is in receipt of LIHEAP, the actual bills do not need to be verified or exceed the payment.  

 

If a non-household or ineligible household member shares utility costs with eligible household members, the eligible household members are entitled to the appropriate standard.

 

If two or more separate households live together and share utility costs, each household is entitled to the appropriate standard.  

 

Example:

A household consists of three single individuals who purchase and prepare meals separately.  One of the three individuals applies for benefits.  All utility costs are shared.  The food stamp household is entitled to the appropriate standard.

1. Standard Utility Allowance (HL SU):

Households responsible for heating/cooling costs or in receipt of LIHEAP including Tribal LIHEAP or renter/heat paid benefits are entitled to the full Standard Utility Allowance (HL SU on the EXSA screen) of $602.00 which includes all utility expenses.

 

Households planning to apply or those who have applied for LIHEAP are entitled to the HL SU.

 

Exception:

If the worker knows the household is not eligible for LIHEAP, the HL SU cannot be allowed.  This must be documented in the case file.

 

If a household received LIHEAP benefits in the last heating season and its circumstances have not changed, the worker can anticipate that LIHEAP benefits will be received in the next heating season and the HL SU must be allowed.

 

If a household received LIHEAP benefits in the last heating season, moves to a new residence where they have no heating/cooling costs, and are not eligible for a renter/heat paid benefit, the household loses entitlement to the HL SU.

 

If a household did not receive LIHEAP last year (either did not apply or was not eligible), and the worker can anticipate eligibility for LIHEAP for the upcoming season, the household is entitled to the HL SU.

 

When the cost of heat is included in the rent and the household is entitled to LIHEAP renter/heat paid benefits, the household is entitled to the HL SU.

 

Any households that have central utility meters and are charged only for excess heating or cooling costs are entitled to the HL SU year round.

 

Households that are charged only for excess heating or cooling costs are entitled to the HL SU year round.  

2. Limited Utility Allowance (LU SA):

Households not entitled to the HL SU that incur at least two of the following utility expenses are entitled to the Limited Utility Allowance (LU SA on the EXSA screen) of $200.00.

Water

Sewer

Garbage

Electricity

Telephone - the household must incur the basic service fee for one telephone to be entitled to the telephone deduction.  The basic service fee for a cellular phone is allowable if that is the only phone the household has.

 

Example:

A household is renting an apartment and is responsible for electricity and telephone costs (no heating/cooling costs).  As the household is incurring these expenses, the household is entitled to the Limited Utility Standard (LU SA).

3. Minimum Utility Standard (MU):

Households not entitled to the HL SU or LU SA that incur at least one of the following utility expenses are entitled to the Minimum Utility Standard (MU on the EXSA screen) of $105.00.

Water

Sewer

Garbage

Electricity

 

Example:

A household is renting an apartment and is responsible for electricity only (no heating/cooling costs).  As the household is incurring these expenses, the household is entitled to the Minimum Utility Standard (MU).

4. Telephone Standard (TL):

Household not entitled to the HL SU, the LU SA, or MU that incur telephone expenses only are entitled to the Telephone Standard (TL on the EXSA screen) of $38.00.  The household must incur the basic service fee for one telephone to be entitled to the telephone deduction.  The basic service fee for a cellular phone is allowable if that is the only phone the household has.  

3. Charges for repair of a home that was substantially damaged or destroyed due to a natural disaster such as fire or flood that are not reimbursable.