Take Four Steps to Verify Zero-Income Status
An applicant or household member may claim to get no income from any source. In these situations, it’s important to be skeptical. HUD management reviewers and auditors scrutinize these claims to keep HUD from overpaying assistance to household members. If it turns out that a household member made a mistake or even lied to you about having no income—and you did nothing to verify the claim—HUD could require your site to reimburse the agency for the excess assistance it paid to the household member based on the claim of no income.
To help you properly determine whether a household member has no income, and to show HUD that you have verified a claim of no income, take four steps whenever a household member claims to have no income. By taking these steps, you may get household members to remember—or admit to—income sources they had not told you about before.
Even if a household member maintains that he has no income, you can show HUD that you made an effort to verify the claim and to fight abuse of rental assistance at your site.
Step 1: Show Household Members HUD’s List of Income Sources
There are some instances in which a member may have a valid no-income claim. Households may have a zero-income certification due to excluded income, or some families may have zero income for temporary periods.
However, you need to verify each claim and make sure the applicant or member has a clear understanding of what constitutes income. Applicants may report no income because they don’t understand the HUD definition of “income.” For instance, they may think it means only wages and not other types of income, such as government benefits.
To help you avoid this type of mistake, show household members a list of what constitutes income for households. You can use Exhibit 5-1 of HUD Handbook 4350.3. In this exhibit, HUD lists sources of money that count as income and sources that don’t.
If household members say they have no income when they meet with you for a certification or recertification, ask them to look carefully at HUD’s list of income sources. Remind them that even if they don’t get money from a job, money from the government in the form of Social Security or welfare benefits is considered income. In response, household members may admit that they get benefit payments from the government and didn’t realize these payments counted as income. Or they may explain that they get money that HUD doesn’t count as income, such as payments for foster children. Or they may continue to claim they have no income.
Step 2: Ask Members How They Plan to Make Ends Meet
If, after looking over HUD’s list of income sources, they still say they have no income, ask them how they plan to survive at the site. Household members still have to subsist from day to day. If household members claim no income whatsoever, they won’t be able to pay for daily expenses such as food or transportation. And food stamps provide only food and are not accepted for other necessary items of daily living, such as toiletries, house-cleaning and paper products, telephone bills, and gasoline. Asking this may help you smoke out a dishonest household that’s intentionally hiding income from you. Household members may suddenly “remember” having income.
But some household members will continue to claim that they don’t have income. For example, they might say that they get handouts now and then from friends or relatives. At this point, you may consider performing a current expense analysis in a spreadsheet. This requires that a household list all current expenses, determine the status of each expense, and compare these figures to the amount of income reported. If the expenses are currently paid, this conflicts with the household’s claim of zero income. Seek clarification if this occurs.
Step 3: Send Verification Forms to Government Agencies
If household members continue to say they have no income, tell them it’s your policy to verify that they don’t get any payments from government agencies. Tell them that you’re going to verify their no-income claim with several government agencies that pay benefits, such as the Social Security Administration and the state and local agencies that pay unemployment and welfare benefits. You can use the form you normally use to verify government benefit income. Make a list of the most common sources of government payments and use the list for any adult household member that claims no income.
Avoiding discrimination claims. To avoid discrimination claims, make sure you send verification forms to all of the agencies on your list for each member of a household that claims no income. Don’t pick and choose which agencies to send the forms to based on your impressions of particular household members.
Handling agencies’ responses. If agencies respond that they pay benefits to household members who claim they have no income, tell the household members. Inform them that you must count the benefits in their income to determine the entire household’s eligibility. If a member claims that an agency gave you the wrong information, tell her to contact the agency to correct the mistake.
If agencies respond that they don’t pay benefits to household members, you can certify that the household members have no income. But remind the members that they must tell you if they begin getting income as defined in the HUD Handbook. And of course, ask them at each recertification if they’ve begun receiving income.
In one case, a court upheld monthly recertification meetings for a zero-income resident. A member challenged the termination of her Section 8 housing assistance for failure to attend monthly income-recertification hearings. A housing authority had approved her application and issued a voucher, subject to its rule that benefit recipients claiming zero income must appear in person each month to recertify their zero-income status.
Over the next few months, however, the resident repeatedly failed to appear at monthly recertification meetings, requested numerous schedule changes, failed to appear at rescheduled meetings, and attempted to recertify by mail. The resident had argued the monthly meetings imposed by the housing authority were an “impossible burden.” However, the court stated that the fact that the resident appeared in person on two occasions demonstrates that doing so wasn’t “impossible” in a legal sense. According to the court, the burden the rule imposed on the resident may have been heavy, but it wasn’t the kind of “impossible burden” that would render the termination decision arbitrary. Also, the court found that accurate reporting of financial data is a legitimate objective of the U.S. Housing Act. The housing authority successfully argued that in-person reporting may enhance accuracy because a recipient is less likely to be untruthful when face-to-face with a housing authority representative, and because the representative can ask follow-up questions to test the recipient’s veracity and credibility [Thompson v. Housing and Redevelopment Authority of Duluth, October 2013].
Step 4: Require Household Members to Sign Affidavit
To complete your certification for household members who claim no income, require that household members fill out an affidavit certifying that they aren’t employed and have no income from any sources listed in HUD Handbook 4350.3, Exhibit 5-1. This statement should be made under penalty of perjury. You can use our Model Form: Require Member to Sign Zero-Income Affidavit.
If you certify a household in which one or all of its adult members claim to have no income, remember to keep a written record of the steps you took in response to that claim. List the questions you asked, the verification forms you sent out, and any signed affidavits you obtained. Show the list to your state housing agency auditors if they ask what steps you took to deal with household members who claimed no income.
See The Model Tools For This Article
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