The last post about Change 4 covered SSN and the updates regarding this part of the application process. Today, I would like for us to look at the language regarding Foster adults and children, and retirement.
Prior to HUD Change 3 foster adults and children were excluded from the household member number (excluded from the numbers for determining income limits) and none of the income was included.
Change 3 came about and Foster children and adults were still excluded from the household member number but now the unearned income for children was included and all income for adults was included.
Now we move on to today, Change 4. Foster adults and foster children are now included in the household member number and the unearned income for children and all income for adults is included. The HUD change now reads, “When determining family size for establishing income eligibility, the owner must include all persons living in the unit…” the exclusion of Foster children or foster adults from household size for purposes of income limit determination has been eliminated.
Retirement is another hot issue that had some changes with the recent HUD release. HUD has adjusted how we look at retirement, specifically regarding what is counted as an asset and what is counted as income. Before Change 4, the language stated that when calculating income from assets, specific assets that must be considered are IRA, Keogh, and similar retirement savings accounts, even though withdrawals would result in a penalty. Change 4 has now added a section to this stating that this is true, unless benefits are being received through periodic payments.
It is important to note that the household has a lot of control over whether or not this is income or an asset. Additionally, it is important that a schedule be set and documented to determine what the definition of periodic payments is, in order to avoid any conflict or lack of consistency.
Finally, when looking at balances held in retirement accounts, you do not count any remaining amounts in the account as an asset. Prior to Change 4, there was some confusion regarding how to handle the remaining balance. HUD has now made it clear that you only include in annual income any retirement benefits received through periodic payments.