Public Housing - Rent You Can Afford
by: Northwestern Legal Services
In public housing, tenants may pay a monthly rent that is one-twelfth of 30% of their adjusted annual income. This brochure will explain what thismeans and how a tenant's rent is calculated.
Tenants in public housing usually report their income to their housing managers once each year, and the manager changes the rent as needed. But, if the amount or source of your income changes at other times (for example you lose your job, you start getting child support, etc.), you must report the change at once to the manager, so that your rent can also be changed. Your lease should tell you how much time you have to report your income changes to your manager. If your income goes up and you do not report your income changes to yoru manager, you may be asked later to pay a large amount of back rent all at one time.
If you believe that your rent has not been changed correctly, tald to your manager about your concern. If you are not happy with your manager's answers write to the main office to ask for a grievance hearing as soon as possible but no later than five calendar days after your manager's decision. If you would like to talk to a lawyer about your concerns, contact the legal services program in your area.
To learn what your rent would be if you lived in public housing, you can use these steps (please note that tenants paying their own gas and electric bills, have even lower rent):
1. MONTHLY INCOME
Add up the total income that you expect to receive in an average month for everyone in the home. Use the gross income (before taxes) for money from work, or net income (after expenses) from a business. If the money you earn from your job changes often from one month to the next, use the average monthly wages. Don't include the income from jobs held by children under age 18 or income of a live-in aide for a disabled or elderly family member.
Add in regular payments from Social Security, SSI, welfare, child support, pensions, unemployment compensation, workers' compensation and interest from savings accounts. But do not include regular income food stamps, foster care payments, or LIHEAP assistance. Also, do not include lump-sum payments from Social Security, workers' compensation, or Earned Income Tax refunds. An increase in income from employment may also be excluded from income if you were previously unemployed. This last exclusion is called the Earned Income Disregard. Ask you manager if you are eligible for the Earned Income Disregard program.
The total amount of all of these items is your monthly income.
2. ANNUAL INCOME
Multiply your monthly income by 12.
3. DEDUCTIONS
Some money is taken off of your annual income to help your family pay for some basic expenses. Add all of the deductions that your family gets:
- $480 for each person on the lease who is under age 18; or over 18 and a full time student or disabled. Do not count this for the head(s) of the house, even if she is under age 18. Do not use this deduction for foster children, either.
- $400 for the family if the head of the house (or her husband) is disabled, or at least 62, even if (s)he is the only person in the home.
- child care costs for children under age 13 if the child care is needed so that a parent can keep a job or further her education. If the cost of this service is more than the income from the job, only use the amount equal to the income from the job.
- if there is a disabled or elderly family member in your home, you can add the amount of the medical expenses for that person (including medical insurance) that are more than 3% of your family's annual income. (Multiply 0.03 times your annual income (#2), subtract that amount from the medical expenses, and use the amount that is left)
Add all of the deductions for your family together .
4. ADJUSTED ANNUAL INCOME
Your annual income (#2) minus your deductions (#3).
5. ADJUSTED MONTHLY INCOME
Divide the adjusted annual income (#4) by 12.
6. MONTHLY RENT
Multiply the adjusted monthly income (#5) times 30%.
These steps are a guide only and do not include all of the income and deductions that will be figured in determining your rent. If you have questions about what is counted as income, or whether you can get certain deductions, please talk with your manager or contact the legal services program in your area. An example of how to figure rent in public housing is outlined below.
PUBLIC HOUSING RENT, Example:
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Mrs. Smith and her two children, ages 7 and 10, live in public housing. Mrs. Smith works and earns $650 a month. She gets $100 each month in child support. She pays a baby sitter $250 a month to care for her children after school and in the summer so she can work. Here is how her rent is calculated:
| 1. Monthly Income: |
work |
|
$650 |
|
child support |
+ |
100 |
|
MONTHLY INCOME |
|
$750 |
|
| 2. Annual Income: |
monthly income ($750 x 12) |
|
$9,000 |
|
ANNUAL INCOME |
|
$9,000 |
|
| 3. Deductions: |
child care $250 per month |
|
|
|
($250 x 12) |
|
$3,000 |
|
(children under age 18) |
|
|
|
7-year-old |
|
$ 480 |
|
10-year-old |
+ |
$ 480 |
|
TOTAL DEDUCTIONS |
|
$3,960 |
|
| 4. Adjusted Annual Income: |
annual income minus deductions |
|
$9,000 |
|
|
- |
$3,960 |
|
ADJUSTED ANNUAL INCOME |
|
$5,040 |
|
| 5. Adjusted Monthly Income: |
adjusted annual income divided by 12 |
|
|
|
($5,040 / 12) |
|
$420 |
|
ADJUSTED MONTHLY INCOME |
|
$420 |
|
| 6. Public Housing Rent: |
30% of adjusted monthly income |
|
|
|
(0.30 x $42) |
|
$126. |
|
MONTHLY RENT |
|
$126. |
|
|
|
|
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Disclaimer: We have attempted to insure the accuracy of the information in this Pamphlet at the time it was created or revised. However, the law does change, sometimes quickly and unexpectedly. Therefore, you should consult an attorney before taking or refraining from any action based on the information.
Date Reviewed: January 2009
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