One of the most vexing problems faced by managers of affordable housing is how to handle the counting of children when full time residence in a unit is not clear. There are many households with children in shared custody situations. When certifying such households, managers must know whether to count the children for eligibility, unit size, and household income. The guidance in HUD Handbook 4350.3, Change 4 outlines the rules to be followed with regard to counting children and the requirements relative to potential income based on the presence of the children.
Counting Children as Household Members
The key factor in deciding whether to count a child under a shared custody arrangement is how much time the child spends in the unit.
If a child lives in a unit at least 50% of the year, the child may be counted for all purposes (i.e., eligibility and unit size). If the child is counted, any unearned income of the child (e.g., SSI, child support, TANF) must also be counted for the household. However, even if the child lives only half the year in the unit, the full amount of unearned income (not a prorated amount) is counted. (Regulatory guidance may be found in HUD Handbook 4350.3, Change 4, Para. 3-6(E)(4)(b), and Exhibit 5-1).
If a child lives in a unit less than 50% of the year (e.g., weekends only), the child should be treated as a guest and not counted for any purpose. Any income paid on behalf of the child should not be counted.
If the amount of time a child spends in the unit is not clear, reasonable documentation may be requested to demonstrate the residency of the child. Managers must remember that court ordered legal custody may not be required. If a household has legal custody of a child, copies of the custody documents should be obtained. But, if there is no court ordered custody, other documentation may be obtained, such as:
1. School records;
2. Tax returns;
3. Verification from a prior landlord; or
4. Verification from the child’s doctor.
All child support received by a household should be counted as income. These payments may be received directly from an ex-spouse or parent, and in some cases from the employer of the ex-spouse or parent.
In many cases, support is paid through a state’s child support enforcement agency, and in some cases, the payments are part of a resident’s welfare benefit, and show up as a “pass-through” payment. Regardless of how they are paid, child support payments count as income.
In most cases, court ordered support is counted as income. However, if the ordered amount is not being received, there are circumstances when it does not have to be counted. Child support that is not being received does not have to be counted if:
1. The resident provides an affidavit stating that the payments are not being received; and
2. The resident has made “reasonable efforts” to collect the amount due. Reasonable efforts include filing papers with a court or enforcement agency (note that simply threatening to go to court is not adequate).
If a member of the household is having money withheld from wages (i.e., garnished), the full gross wage must still be counted as income. This is a HUD regulatory requirement (4350.3, Para. 5-10[F]).
Verification of Child Support
When verifying child support, the following information should be verified:
1. The support amount as specified in a divorce decree or settlement agreement; and
2. Whether this amount will be terminated in the next 12 months, and if so, when.
The following methods – in order of preference – may be used to verify child support:
1. A copy of a divorce decree, separation or settlement agreement stating the amount of support or payment schedules;
2. A letter from the person paying the support, stating the periodic amount to be paid;
3. A copy of the latest check – the manager should record the date, amount, and number of the check; or
4. A notarized statement or affidavit of the amount received or that support payments aren’t being received and the likelihood if support payments being received in the future. (It is recommended that if this method is used, the file should document why third-party verification could not be obtained).