How to Certify Households Sharing Child Custody

Site managers have to deal with countless situations presented to them by residents, one of which is shared custody of children. A low-income household may report to you that its members include children who are covered by a joint custody arrangement—that is, the children live part of the time with the household and part of the time with their parent (or other legal guardian) who doesn’t live in the unit or at your site. For example, a household head may report that she has two sons who will be living in the unit during the week and with their father on weekends.

When certifying or recertifying these households, you need to know whether to count the children as household members for purposes of determining eligibility, unit size, and household income. The HUD Handbook spells out rules for counting children who are covered by a joint custody arrangement. We’ll tell you how to apply the rules. And we’ll give you six tips on how to calculate child support payments as either income or a household asset.

Counting Child as Household Member

Whether you count a child who’s covered by a joint custody arrangement as a member of a household depends on how much time the child spends living in the household’s unit, says HUD.

If child lives in unit at least 50 percent of time. Count the child as a household member for purposes of determining eligibility and unit size if that child spends at least 50 percent of the time living in the household’s unit [HUD Handbook 4350.3, par. 3-6(E)(4)(b)]. This means you should also count any unearned income attributable to the child, such as Supplemental Security Income (SSI), child support payments, or welfare payments, as part of the household’s income [Handbook 4350.3, Exhibit 5-1].

For example, suppose Jane Doe shares custody of her two sons with her ex-husband. The sons live in the unit every other week, and each son gets $400 a month in SSI payments.

The manager should:

• Count the sons as household members because they live in the unit at least 50 percent of the time;
• Count the household as having three members, for purposes of determining eligibility and unit size; and
• Count $800 per month in unearned income based on the two sons’ SSI payments.

If child lives in unit less than 50 percent of time. Sometimes a child resides in the unit less than 50 percent of the time—for instance, on weekends only. For example, Jack Smith shares custody of his daughter, Zoe, with his ex-wife. Zoe stays in Jack’s unit on Friday and Saturday nights. Zoe also spends Sundays with Jack but lives with her mother across town the rest of the week. Zoe gets $300 a month in SSI. The manager should not count Zoe as Jack’s household member for determining eligibility or unit size purposes and should not count Zoe’s SSI income.

If a parent tells you that her child spends approximately half the time with her, you may be uncertain whether to count the child as part of that parent’s household. In this situation, ask the parent for a copy of the court order that outlines the custody arrangement and visitation schedule. If it’s still not clear, ask your tax credit consultant or state housing agency for advice.

HANDLING CHILD SUPPORT PAYMENTS CORRECTLY

You need to know how to calculate the income of a household that gets or makes child support payments. The HUD Handbook has rules on handling child support payments properly. Here are five tips on how to apply HUD’s rules.

Tip #1: Count Child Support as Household Income

If a household member gets child support, count these payments as part of household income. The Handbook specifically states that you must count as income the “full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services.” In many cases, the household member will get these payments directly from the ex-spouse or parent, or in some cases, from the ex-spouse’s or parent’s employer.

But sometimes household members who get some form of state welfare or grants get their child support payments through their state’s child support enforcement agency. This means the payments are included in their state welfare or grant payments, either as a lump sum or as a periodic entitlement. Make sure to include the amount of child support payments in household income, regardless of how you would treat the rest of the state welfare or grant payment.

For example, sometimes households get money from the state for certain grants that HUD excludes from household income. But if the state includes a child support payment in the same check with these grant payments, you must separate the amount of child support from the remaining grant payment and include the child support in household income [HUD Handbook 4350.3, par. 5-6(F)(2)].

Tip #2: Get More Information Before Excluding Unpaid Amounts

Some household members who are supposed to be getting child support payments say they aren’t getting some or all of the payments. But you shouldn’t rush into excluding any unpaid amounts from household income. To have unpaid child support payments excluded from household income, a household member must first state in writing that she:

• Is not getting the payments that the child support order within a divorce, separation agreement, or other settlement requires; and
• Has made “reasonable efforts” to collect the amounts she’s supposed to be getting. HUD says this means she must have filed papers with a court or an enforcement agency. For example, it’s not enough that she wrote her child’s father a letter threatening to go to court if he didn’t meet his child support obligations [HUD Handbook 4350.3, par. 5-6(F)].

Tip #3: Count Child Support Wage Deductions as Income

Some household members who are required to pay child support don’t make the payments voluntarily. Sometimes, in such cases, a court may have ordered the household member’s wages “garnished,” meaning his employer must deduct the monthly child support payments from his wages and pay it direct to the child’s mother.

The household may claim that you shouldn’t include these amounts in his income from wages, because the amount he actually gets paid is less than his stated salary. But in these cases, HUD says you must include these amounts in the member’s income from wages [Handbook 4350.3, par. 5-10(F)].

For example, suppose John Smith earns $2,000 a month at his job. He has $400 a month deducted from his wages by court order and paid to his child’s mother as child support, leaving him with $1,600 a month in wages. You must count the entire $2,000—not $1,600—when calculating John Smith’s household income.

Tip #4: Get Proper Verification

If a household member gets child support, verify the following information:

• The amount of child support specified in the divorce settlement or separation agreement; and
• Whether this amount will be terminated within the next 12 months and, if so, when.

To verify this information, the Handbook specifies the following forms of documentation (in order of preference):

• A copy of a separation or settlement agreement or divorce decree stating the amount of support and the payment schedules;
• A letter from the person paying the support, stating the periodic amount to be paid;
• A copy of the latest check (be sure to record the date, amount, and number of the check for your files); and
• A notarized statement or affidavit of the amount received or that support payments aren’t being received and the likelihood of support payments being received in the future [HUD Handbook 4350.3, Appendix 6-C (G)(2)].