How to handle child support has been a common area of concern for property owners everywhere. HUD states in the 4350, Chapter 5 that:
“Owners must count alimony or child support amounts awarded by the court unless the applicant certifies that payments are not being made and that he or she has taken all reasonable legal actions to collect amounts due, including filing with the appropriate courts or agencies responsible for enforcing payment.
The owner may accept printouts from the court or agency responsible for enforcing support payments, or other evidence indicating the frequency and amount of support payments actually received.
Child support paid to the custodial parent through a state child support enforcement or welfare agency may be included in the family’s monthly welfare check and may be designated in different ways. In some states these payments are not identified as separate from the welfare grant. In these states, it is important to determine which portion is child support and not to count it twice. In other states, the payment may be listed as child support or as “pass-through” payments. These amounts must be counted as annual income.
When no documentation of child support, divorce, or separation is available, either because there was no marriage or for another reason, the owner may require the family to sign a certification stating the amount of child support received.”
There are many approaches to handling child support. If it falls in line with HUD’s guidance, an owner may choose their own approach, at their State Agency’s discretion and direction.
Let’s look at an example of what falls within HUD’s guidance. If an owner has a court order and a printout from the enforcement agency, an owner may use the average payment from the printout, in lieu of the amount on the court order.
What does using the average payment mean? An owner will take the average number of payments listed on the printout and annualize to determine the amount of child support to be listed in the annual income for the upcoming certification year.
Looking at an example:
On September 7, Stacey Jones verifies she has been court ordered child support for her daughter, Evie, in the amount of $500 a month. She certifies that she does not receive it and receives varying amounts. She supplies her printout from the enforcer which shows a history of 6 months.
Since we have at least three months of history and the printout from the enforcer, we will be able to use the average of actual payments instead of the court ordered amount.
We start by adding the totals ($1,575), then divide that by the number of months shown ($1,575/ 6 = $262.50) and use that amount as the monthly amount versus the court ordered amount of $500.
The annualized child support income will be $3,150.
As a reminder, the following steps should always be taken:
Every household should be asked if there is child support or if child support is due, even if children are not present in the household.
Note: A child support affidavit is not required by HUD but may be by your state agency. An owner shall inquire about child support for every household and properly document the file with the applicant’s third-party documentation or self-certification of non-receipt.
The questions should be:
a. Do you receive child support?
b. At what frequency?
c. In what amount?
d. Have you been awarded child support by court order?
The questions should cover ALL children.
The court order in its entirety is recommended; however, if not present it will not be a discrepancy when the printout from the enforcement agency clearly shows the amount due to them, the frequency of pay, the payer, and the children(s) names.