Owner Update “Question of The Month”

Q: How does TMHA verify the income of tenants on the program?

A: Verification of tenant income and allowable deductions from income is a priority program with HUD at the current time. HUD estimates that approximately 70% of subsidy payment errors are attributable to intentional or unintentional tenant misrepresentation of income. To that end HUD has placed a lot of updated requirements on housing authorities in regard to income and deduction verifications.

TMHA must attempt to “3rd party verify” ALL income and deductions of all adults in a household. This means that TMHA staff must contact by phone or mail every place of employment or other agency where tenants receive income, and verify the amount and frequency DIRECTLY WITH THE EMPLOYER OR PROVIDER. This obviously takes a great deal of time, and is sometimes frustrating to accomplish. In the case that the employer or provider is not forthcoming with the information after two attempts, TMHA must document the file of same, and go to the next level of verification in the hierarchy which would be a review of documents the tenant has such as award letters or pay stubs.

In the case of medical deductions this process can be very complicated for people who have deductible out-of-pocket costs with multiple doctors and pharmacies. TMHA staff must try to verify every deduction with the doc or pharmacy. Medicare Part D drug coverage has somewhat complicated the process in that provider premiums must also be 3rd party verified.

One improvement in verification is the Enterprise Income Verification (EIV) System. This is an electronic income matching system that HUD has set up with Ohio Job & Family Services. It works by matching HUD tenants with SWICA (State Wage and Income Reporting Program) data on wages or benefits for that person. This system allows housing authorities to go on line to search for data on program tenants.

TMHA informs our tenants up front that we are going to seek this data, and the tenants must sign a release of information. We cannot use the data to calculate rent, but we can and do use it to compare with the income the tenant has informed us about. In the case there is a discrepancy, we must so inform the tenant and give them a chance to dispute the EIV data if they believe it is incorrect. There are legitimate reasons why the EIV data may be incorrect. By the time the data are entered into the EIV system, it may be a quarter or two old, and the tenant may be working at another job or no longer receives the benefit.

Since using this system, TMHA has uncovered several notable cases of people with years of unreported employment income during which time they were receiving assistance on our program. When TMHA investigated the case and determined the EIV data were correct, we pursued fraud charges that have resulted in significant pay backs. Typically the fraudulent tenant received probation and conditions to repay, and of course TMHA terminated their assistance.

 

This is the follow up notice to one in last month’s Owner Update. TMHA will no longer be able cover the cost of lead based paint clearances effective May 1, 2006. In the past HUD has provided us funds to cover the cost of the first $150 clearance test for pre-’78 units applicable to the Lead Based Paint rule. In a cost cutting move this year, HUD HAS DISCONTINUED PROVIDING FUNDING FOR LBP CLEARANCES. Farsight Mgmt. will still perform the clearance test, but the owner will now have to pay Farsight for the service rather than sending the bill to TMHA.

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