[Code of Federal Regulations]
[Title 24, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR5.609]

[Page 80-82]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS--Table of Contents
 
Subpart F--Section 8 and Public Housing, and Other HUD Assisted Housing 
  Serving Persons with Disabilities: Family Income and Family Payment; 
      Occupancy Requirements for Section 8 Project-Based Assistance
 
Sec. 5.609  Annual income.

    (a) Annual income means all amounts, monetary or not, which:
    (1) Go to, or on behalf of, the family head or spouse (even if 
temporarily absent) or to any other family member; or
    (2) Are anticipated to be received from a source outside the family 
during the 12-month period following admission or annual reexamination 
effective date; and
    (3) Which are not specifically excluded in paragraph (c) of this 
section.
    (4) Annual income also means amounts derived (during the 12-month 
period) from assets to which any member of the family has access.
    (b) Annual income includes, but is not limited to:
    (1) The full amount, before any payroll deductions, of wages and 
salaries, overtime pay, commissions, fees, tips and bonuses, and other 
compensation for personal services;
    (2) The net income from the operation of a business or profession. 
Expenditures for business expansion or amortization of capital 
indebtedness shall not be used as deductions in determining net income. 
An allowance for depreciation of assets used in a business or profession 
may be deducted, based on straight line depreciation, as provided in 
Internal Revenue Service regulations. Any withdrawal of cash or assets 
from the operation of a business or profession will be included in 
income, except to the extent the withdrawal is reimbursement of cash or 
assets invested in the operation by the family;
    (3) Interest, dividends, and other net income of any kind from real 
or personal property. Expenditures for amortization of capital 
indebtedness shall not be used as deductions in determining net income. 
An allowance for depreciation is permitted only as authorized in 
paragraph (b)(2) of this section. Any withdrawal of cash or assets from 
an investment will be included in income, except to the extent the 
withdrawal is reimbursement of cash or assets invested by the family. 
Where the family has net family assets in excess of $5,000, annual 
income shall include the greater of the actual income derived from all 
net family assets or a percentage of the value of such assets based on 
the current passbook savings rate, as determined by HUD;
    (4) The full amount of periodic amounts received from Social 
Security, annuities, insurance policies, retirement funds, pensions, 
disability or death benefits, and other similar types of periodic 
receipts, including a lump-sum amount or prospective monthly amounts for 
the delayed start of a periodic amount (except as provided in paragraph 
(c)(14) of this section);
    (5) Payments in lieu of earnings, such as unemployment and 
disability compensation, worker's compensation and severance pay (except 
as provided in paragraph (c)(3) of this section);
    (6) Welfare assistance payments. (i) Welfare assistance payments 
made under the Temporary Assistance for Needy Families (TANF) program 
are included in annual income only to the extent such payments:
    (A) Qualify as assistance under the TANF program definition at 45 
CFR 260.31; and
    (B) Are not otherwise excluded under paragraph (c) of this section.
    (ii) If the welfare assistance payment includes an amount 
specifically designated for shelter and utilities that is subject to 
adjustment by the welfare assistance agency in accordance with the 
actual cost of shelter and utilities, the amount of welfare assistance 
income to be included as income shall consist of:

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    (A) The amount of the allowance or grant exclusive of the amount 
specifically designated for shelter or utilities; plus
    (B) The maximum amount that the welfare assistance agency could in 
fact allow the family for shelter and utilities. If the family's welfare 
assistance is ratably reduced from the standard of need by applying a 
percentage, the amount calculated under this paragraph shall be the 
amount resulting from one application of the percentage.
    (7) Periodic and determinable allowances, such as alimony and child 
support payments, and regular contributions or gifts received from 
organizations or from persons not residing in the dwelling;
    (8) All regular pay, special pay and allowances of a member of the 
Armed Forces (except as provided in paragraph (c)(7) of this section).
    (c) Annual income does not include the following:
    (1) Income from employment of children (including foster children) 
under the age of 18 years;
    (2) Payments received for the care of foster children or foster 
adults (usually persons with disabilities, unrelated to the tenant 
family, who are unable to live alone);
    (3) Lump-sum additions to family assets, such as inheritances, 
insurance payments (including payments under health and accident 
insurance and worker's compensation), capital gains and settlement for 
personal or property losses (except as provided in paragraph (b)(5) of 
this section);
    (4) Amounts received by the family that are specifically for, or in 
reimbursement of, the cost of medical expenses for any family member;
    (5) Income of a live-in aide, as defined in Sec. 5.403;
    (6) The full amount of student financial assistance paid directly to 
the student or to the educational institution;
    (7) The special pay to a family member serving in the Armed Forces 
who is exposed to hostile fire;
    (8)(i) Amounts received under training programs funded by HUD;
    (ii) Amounts received by a person with a disability that are 
disregarded for a limited time for purposes of Supplemental Security 
Income eligibility and benefits because they are set aside for use under 
a Plan to Attain Self-Sufficiency (PASS);
    (iii) Amounts received by a participant in other publicly assisted 
programs which are specifically for or in reimbursement of out-of-pocket 
expenses incurred (special equipment, clothing, transportation, child 
care, etc.) and which are made solely to allow participation in a 
specific program;
    (iv) Amounts received under a resident service stipend. A resident 
service stipend is a modest amount (not to exceed $200 per month) 
received by a resident for performing a service for the PHA or owner, on 
a part-time basis, that enhances the quality of life in the development. 
Such services may include, but are not limited to, fire patrol, hall 
monitoring, lawn maintenance, resident initiatives coordination, and 
serving as a member of the PHA's governing board. No resident may 
receive more than one such stipend during the same period of time;
    (v) Incremental earnings and benefits resulting to any family member 
from participation in qualifying State or local employment training 
programs (including training programs not affiliated with a local 
government) and training of a family member as resident management 
staff. Amounts excluded by this provision must be received under 
employment training programs with clearly defined goals and objectives, 
and are excluded only for the period during which the family member 
participates in the employment training program;
    (9) Temporary, nonrecurring or sporadic income (including gifts);
    (10) Reparation payments paid by a foreign government pursuant to 
claims filed under the laws of that government by persons who were 
persecuted during the Nazi era;
    (11) Earnings in excess of $480 for each full-time student 18 years 
old or older (excluding the head of household and spouse);
    (12) Adoption assistance payments in excess of $480 per adopted 
child;
    (13) [Reserved]
    (14) Deferred periodic amounts from supplemental security income and 
social security benefits that are received

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in a lump sum amount or in prospective monthly amounts.
    (15) Amounts received by the family in the form of refunds or 
rebates under State or local law for property taxes paid on the dwelling 
unit;
    (16) Amounts paid by a State agency to a family with a member who 
has a developmental disability and is living at home to offset the cost 
of services and equipment needed to keep the developmentally disabled 
family member at home; or
    (17) Amounts specifically excluded by any other Federal statute from 
consideration as income for purposes of determining eligibility or 
benefits under a category of assistance programs that includes 
assistance under any program to which the exclusions set forth in 24 CFR 
5.609(c) apply. A notice will be published in the Federal Register and 
distributed to PHAs and housing owners identifying the benefits that 
qualify for this exclusion. Updates will be published and distributed 
when necessary.
    (d) Annualization of income. If it is not feasible to anticipate a 
level of income over a 12-month period (e.g., seasonal or cyclic 
income), or the PHA believes that past income is the best available 
indicator of expected future income, the PHA may annualize the income 
anticipated for a shorter period, subject to a redetermination at the 
end of the shorter period.

[61 FR 54498, Oct, 18, 1996, as amended at 65 FR 16716, Mar. 29, 2000; 
67 FR 47432, July 18, 2002]