A household is entitled to a shelter/utility deduction when shelter and utility expenses are more than 50 percent of the monthly countable gross income after all other deductions.
Shelter expenses include the costs necessary to maintain a residence.
Utility costs include expenses for services or products such as fuel, electricity, water, and sewer.
A household that has an elderly or disabled person may receive a deduction for the full amount of its excess expenses. For all other households, see Chapter 560, Appendix A for the maximum allowable deduction.
NOTE: The CAO may need to restore benefits if an SSI applicant is later found eligible for SSI benefits. In computing the amount to be restored, the CAO must allow an appropriate utility allowance retroactive to the SNAP application date or the initial SSI eligibility date, whichever is later.
The CAO must allow a deduction for expenses the household has to pay, whether the expenses are paid or not.
The CAO must allow the principal and interest charges for continuing costs for the shelter occupied by the household, such as, rent, mortgage, or other costs including condominium and association fees.
Third party and/or vendor payments that are payments for shelter costs directly paid to the landlord or utility by someone outside the household is not an allowable shelter expense. If the household expense is paid on a sporadic basis, allow the deduction for the household.
Living arrangements are not dependent on ownership of the property where the household lives. If a person who lives in a rented house or apartment rents a room in the residence to someone else, the payment is considered self-employment income. SNAP rules do not limit self-employment from renting rooms to persons who own their residence.
Example: X rents an apartment for $550 a month. Y moves in and pays X $250 a month. X receives SNAP benefits. Y buys and prepares food separately. How to treat the payment from Y depends on the arrangement between X and Y. When households share a residence, the CAO must discuss the situation with the household to determine if the households are actually sharing expenses or if a roomer situation exists.
If the two households are sharing expenses, the payment made from Y to X is not considered income to X, since the payment is simply passed on to the landlord. X would be allowed shelter costs of $300 for the rent X pays. If Y applies for SNAP, Y would be allowed shelter costs of $250.
If the agreement between X and Y is that Y is paying X for a room, then the $250 payment is considered earned self-employment income for X. Shelter costs of $550 would be allowed for X.
Allowable mortgage expenses:
Repayment of a loan to purchase a mobile home;
Repayment of a second, third, or later mortgage;
Costs for loans involving liens or judgments when failure to make the payment may result in the loss of the household’s shelter
Example: An arrested person borrowed money for bail, using his home as collateral. Payments are allowable as shelter costs, because failure to pay the loan, including interest, would result in the loss of the household’s shelter.
Additional shelter/utility expenses allowed:
Property taxes, state and local assessments, and insurance on the structure, but not insurance on the furniture or personal belongings;
NOTE: Delinquent property taxes and late/penalty fees for taxes, assessments, and insurance are not allowable shelter expenses.
NOTE: Late fees and penalties on mortgages, utilities, and/or property taxes are not to be included as a part of shelter costs.
Charges for repair of a home that was substantially damaged or destroyed by a natural disaster, such as a fire or flood. Do not include charges for home repairs that have been or will be reimbursed by private or public relief agencies, insurance companies, or by any other source; and
Shelter costs for a home temporarily unoccupied by the household because of employment or training away from home, illness, or the abandonment of the home because of a natural disaster or casualty loss. For an unoccupied home to be included in the shelter costs, the household must intend to return to the home.
NOTE: The current occupants of the home, if any, must not be claiming the shelter costs for SNAP purposes. The home may not be leased or rented during the household’s absence.
PFS17969560 PA CAP updates to shelter costs April 21, 2016
At application, the CAO must verify shelter costs if the applicant:
Provided questionable information.
To be considered questionable:
Information on the application must be inconsistent with other information on the application or previous applications.
Information is inconsistent with information received by the CAO, known in the case record, presented during the interview, or provided from other sources.
Verification should be requested when information provided by the applicant is incomplete, unclear, or contradictory. When determining if information is questionable, the decision shall be based on each household’s individual circumstances.
Determination of questionable information shall not be based on race, religion, ethnic background, or national origin. CAOs should not target groups such as migrant farmworkers or American Indians for more intensive verification under this provision. The rationale for determining information questionable should be entered in the narrative.
Example: Ms. Smith applies for SNAP benefits. She is not known as she has never received benefits. Her shelter costs are reasonable based on her income reported. No verification should be requested since the information Ms. Smith provided is NOT questionable.
Example: Mr. Jones is renewing his SNAP benefits. He previously reported his rent as $350 per month. On this renewal, he reports living at the same address and reports a rent amount of $800 monthly. This information is considered questionable and verification should be requested. The CAO must narrate that information is questionable because client is reporting rent increase of $450 monthly with no change of address.
At SAR review or renewal and during the certification period, the CAO must verify shelter costs only if the information provided by the household is questionable.
Forms of acceptable verification for each allowable expense include, but are not limited to the following:
Rent or mortgage
Statement from the institution holding the mortgage
Rent receipt
Statement by the landlord or manager
Current lease
Property tax
Bills or statements from the taxing authority
Property insurance
Bills or statements from the insurance company or a copy of a current receipt
A copy of a current receipt.
NOTE: Insurance premiums on personal property and furnishings are not included.
NOTE: Should the household fail to provide required verification of the shelter expense, the CAO will compute the household eligibility and allotment without the deduction.
Allowable utility expenses to determine standard utility allowances (SUA) include the following:
Heating and cooling fuel costs
Water
Electricity
Sewer
Well installation and maintenance
Garbage and trash collection fee
Septic tank installation and maintenance
The standard telephone allowance listed in Chapter 560, Appendix A applies to regular or cell telephones having a monthly service fee associated with their plans. Pagers do not qualify for this allowance.
NOTE: Late/penalty fees or interest charges are not allowable utility expenses.
The Heating SUA (HSUA) is used as a deduction for SNAP households that incur a heating or cooling cost that is billed separately from its rent or mortgage. The HSUA is also used for households that received Low-Income Home Energy Assistance Program (LIHEAP) assistance. See Appendix A.
The Non-Heating SUA (NHSUA) is used as a deduction for the household that incurs two utilities used for purposes other than heating or cooling. This includes water, sewer, well installation and maintenance, septic tank installation and maintenance, refuse collection, or any fee or related charges required for one telephone. See Appendix A.
The Limited SUA (LSUA) is used as a deduction for the household that incurs one utility expense that is not a telephone or a heating/cooling expense. The LSUA eliminates the requirement to verify and use the actual utility cost. See Appendix A. .
The telephone allowance is used when the telephone cost is the only utility expense incurred. See Appendix A.
NOTE: Cooling costs must be from central air or room air conditioning, not fans.
A household is entitled to the HSUA for the certification period as indicated in the LIHEAP system history file in E-CIS during the current annual LIHEAP period (October 1 to September 30) if:
A LIHEAP payment or emergency cooling project (ECP) payment was received, or
A LIHEAP payment or emergency cooling project (ECP) was authorized;
When a household moves, the entitlement to the SUA continues if that household received LIHEAP at the previous address and it is within the same annual LIHEAP period. If it did not receive LIHEAP at the previous address but has received a LIHEAP payment at the new address, the household is entitled to the HSUA.
When an adult member leaves a LIHEAP household and applies for SNAP, the member may receive the HSUA, because he or she was included in a LIHEAP payment.
A household that has heating or cooling costs on an irregular basis but is otherwise eligible to use the HSUA may continue to use it between billing periods.
A SNAP household living with and sharing costs with another person or household is entitled to the appropriate SUA. There is no proration.
Example: A grandmother is getting SNAP benefits as a separate household. The grandmother has a mortgage and utility expenses. The grandmother’s daughter and grandchild receive SNAP benefits as a separate SNAP household and pay rent to the grandmother. Both SNAP households live at the same residence and receive LIHEAP as one unit. Both SNAP households are eligible for the HSUA based on receipt of LIHEAP during the current heating season.
If two or more households share telephone expenses, each household gets the $33 telephone allowance.
At application, at SAR review, at renewal, and during the certification period, the CAO must verify utility costs only if the information provided by the household is questionable.
Acceptable verification of utilities includes the following:
Current statements, bills, or receipts from the utility company;
A statement from the landlord when costs are shared;
A statement from a landlord or a lease showing that the household is responsible for heating or cooling costs separate from rent; or
Receipts from utility companies or the landlord
NOTE: The CAO must determine eligibility without the deduction if the household fails to provide sufficient verification.
NOTE: The CAO must narrate the household's eligibility to receive or not receive an SUA.
Persons who live in Section 8 or scattered-site housing may be eligible to receive a utility allowance or rebate for utility expenses from the Department of Housing and Urban Development (HUD) or a public housing authority for their utility expenses. A utility allowance is a payment that reflects the total amount of the average utility bills that a particular type of dwelling is expected to incur. A utility rebate is a payment of a remaining balance of a utility allowance after it has been applied directly to a household’s rental costs.
Utility allowances may be paid in the following methods:
The utility allowance is paid by HUD and sent directly to the public housing authority to be applied against the household’s rent. If the household’s rent is less than the utility allowance, the housing authority pays the household the remaining balance (the utility rebate).
NOTE: IT is possible that the public housing authority is responsible for paying the utility allowance. If this is the case and the public housing authority applied the allowance against the rent, the remaining balance of the allowance, if any, is paid to the household as a utility rebate.
The utility allowance is paid directly to the household by HUD or the public housing authority.
The utility allowance is paid directly to the utility company by HUD or the public housing authority. This happens only if the household formally assigns this payment to the utility company.
NOTE: This payment is not a vendor payment. It is money that is owed to the household.
The CAO must calculate shelter/utility expenses and determine whether a household receiving utility allowances or rebates is entitled to the SUA. The CAO must determine shelter/utility expenses for these households by evaluating:
The public housing authority office’s procedures for billing the household for rent; and
The household’s individually metered utility expenses related to the monthly utility allowance or rebate amount.
NOTE: Utility allowances or rebates are excluded income. (See Section 550.5.)
When calculating shelter expenses for households receiving a utility allowance or rebate, the amount of rent a household actually pays each month is the household’s monthly shelter expense. This is the amount of rent after the utility allowance is subtracted.
Examples:
Public housing authority rent is $150. The household is eligible for a utility allowance of $200. The allowance is forwarded to the public housing authority, which applies $150 of it to the rent. The remaining $50 is forwarded to the household as a utility rebate. The household’s monthly shelter expense is $0. The $50 that the household receives is excluded as income.
Public housing authority rent is $150. The household is eligible for a utility allowance of $100. The total utility allowance of $100 is forwarded to the public housing authority and applied to the rent. The household is responsible for $50 rent. The household does not receive a utility rebate. The household’s monthly shelter expense is $50.
NOTE: Situations may occur in which a household understates its income to HUD. As a result, the household pays less than the appropriate rent for a period of time. When HUD discovers the error, the household’s rent may be increased to add a charge for recoupment of rent that should have been collected. The CAO must not include the recoupment portion of the rental increase in the household’s shelter expenses.
When calculating utility expenses for households receiving a utility allowance or rebate, the CAO must compare the monthly utility costs to the monthly utility allowance or rebate. If the monthly utility costs are more than the monthly utility allowance or rebate during a month, the household may be eligible for the appropriate SUA.
A household receiving a utility allowance or rebate is automatically entitled to an HSUA if it receives a LIHEAP payment.
A household receiving a utility allowance or rebate but not a LIHEAP payment is eligible for the HSUA if the household:
Incurs out-of-pocket utility expenses exceeding the amount of the monthly utility allowance amount or rebate paid to the household during any month in the certification period.
Example: A household is individually metered and billed regularly for heating expenses. The household is eligible for a utility allowance of $125. $100 of this allowance is forwarded to the public housing authority and allocated to the household’s rent. $25 is forwarded to the household as a utility rebate. The household expects utility expenses of $131.25 in a future month of the certification period. The household is eligible for the heating SUA because out-of-pocket utility expenses exceed the $125 in at least one month.
NOTE: If the utility allowance or rebate received by the household equals or exceeds the anticipated utility costs in all applicable months, the household is not eligible for an SUA.
Reminder: The household is eligible for the telephone allowance.
Example: A household is individually metered and billed regularly for heating expenses. The household is eligible for a utility allowance of $100. The household assigned payment of the utility allowance to the utility company. The household is on a budget plan with the utility company and has monthly average billings of $98. Each month the utility allowance of $100 is automatically applied to the household’s utility account. The household does not have any out-of-pocket utility expenses and cannot receive an SUA.
Example: A household is individually metered and billed regularly for heating expenses. The household is eligible for a utility allowance of $100. The household has assigned the payment of the utility allowance to the utility company. The household is on a budget plan with the utility company and incurs monthly averaged billings of $174 each month. Each month the utility allowance of $100 is automatically applied to the household’s utility account. The household incurs out-of-pocket utility expenses each month and is eligible for the heating SUA.
The CAO must determine eligibility for the proper SUA if the household has utility expenses in excess of its monthly utility allowance or rebate in any applicable month, but is not responsible for heating or cooling expenses.
Reminder: These expenses must not include telephone costs.
7 CFR § 273.2(f)(1)(iii)
7 CFR § 273.2(f)(2)(i)
7 CFR § 273.2(f)(6)
7 CFR § 273.9(d)
7 CFR § 273.9(d)(6)
7 CFR § 273.9(d)(6)(ii)
7 CFR § 273.9(d)(6)(ii)(A)
7 CFR § 273.9(d)(6)(ii)(B)
7 CFR § 273.9(d)(6)(ii)(C)
7 CFR § 273.9(d)(6)(ii)(D)
7 CFR § 273.9(d)(6)(ii)(E)
7 CFR § 273.9(d)(6)(ii)(F)
Issued September 15, 2017; Replacing April 27, 2016