602-4 E.     SHELTER DEDUCTION

Households are allowed a shelter deduction from their countable income when the total shelter costs are more than 50% of their net income.

• Regular households are allowed the excess shelter amount that exceeds 50% of their countable net income, up to the maximum shelter deduction.  Refer to Addendum 4 for the current maximum shelter deduction.
• Special Category (SPECATSpecial Category Household/Individual) households with a disabled or elderly household member are allowed the excess shelter amount that exceeds 50% of their countable net income.  These households have no maximum shelter deduction.

1. Shelter Costs

To determine the shelter deduction, the caseworker must identify the allowable shelter costs and verify that the household is responsible for paying the expense.  Generally, the costs must be for the home currently occupied by the household.  Exceptions are listed at MS 602-4E(5).

a. Rent or Mortgage Costs Allowed

• Regularly charged rental payments, including payments for a trailer or mobile home space or boat berth

Note: 

An increase to the charge of rent due to a pet living in the home is not an allowable shelter expense.  The portion of rent that was increased, due to a pet, will not be allowed as a shelter cost.  

• For households living in public housing and those getting Section 8 Housing Choice Voucher subsidies, the amount of rent they are required to pay.  The amount designated as a utility allowance is not included in the amount allowed as the household’s rent.
• Mortgage payments, including payments on a trailer, mobile home, vehicle or boat, and the property on which the trailer, mobile home, or boat usually rests.  Payments on surrounding property that is not separated from the home by property owned by others are allowed when the property was financed by a loan secured by the home and home lot.
• Payments on second mortgages secured by the home
• Payments related to a reverse mortgage, including mortgage interest payments, mortgage insurance and bank fees
• Property taxes and other assessments levied against the home property.  Property taxes and assessments are also allowed for surrounding property that is not separated from the home by property owned by others.
• Condominium and association fees.  If a portion of the fee covers the cost of a heating or non-heating utility, the household is allowed the heating or non-heating utility standard in addition to the condominium fee.
• Mortgage and homeowner’s insurance.  If the household is living in a vehicle, the insurance costs that cover the vehicle are allowed.
   
• The charges for repair of the home damaged or destroyed through a natural disaster such as fire or flood are allowed.  

Exception:  

Do not deduct the costs of repair or replacement that have been or will be reimbursed.

b.  Utility Costs Allowed

• Fuel for home heating, cooking, or lighting, including fuel oil, natural gas, liquefied petroleum gas, coal, wood, and other home heating, cooking or lighting fuel.
• Electricity.  
• Telephone service:  allow one phone utility standard per household.
• Water, including water delivery.
• Sewage disposal, including pumping of septic tanks and holding tanks and commercial honey-bucket service.
• Garbage collection, including pickup of recyclable household containers.
• Initial installation of utilities.
• Home energy costs for home heating and/or electricity paid by the Heating Assistance Program or an energy assistance program administered by a Native organization.
• Utility costs charged by a landlord, including charges for water for a washing machine and charges for outside electric outlets for vehicles.

c. Shelter and Utility Costs Not Allowed

• One-time deposits on utilities, including telephone
• Mandatory fees such as furniture charges, pest control charges, and maintenance fees.  

Exception:  

The entire condominium fee is allowed as a shelter cost even if all or a portion of the fee covers these items.  

• Home mortgage or loan closing costs, unless itemized to identify allowable deductions such as insurance and taxes

• Gasoline costs, when the household is living in a vehicle and uses the vehicle for transportation.
• Payments made on vehicles not used as a home
• Costs for repairing or replacing essential items of property for which the household will be or has been reimbursed
• Costs covered by in-kind income, an excluded reimbursement, or an excluded vendor payment.  For example, Section 8 Housing Choice Voucher subsidies, Alaska Power Cost Equalization Program payments, or rent reduced in exchange for managing the apartment complex are not considered part of the household’s shelter cost.  

Exception:  

Home heating and/or electricity paid by the Heating Assistance Program or an energy assistance program administered by a Native organization are an allowable deduction.

• Late fees
• Damage or advance deposits on rental property
• Separate insurance costs for furniture and personal belongings (i.e., renter's insurance).  If the household lives in a vehicle, insurance costs that are not for the vehicle itself, such as collision and medical coverage, are not allowed.
• Costs charged or paid between individuals who are included in the same SNAP household
• Past due expenses previously billed

2. Calculating Utility Costs

Utility costs are included in determining the shelter deduction by using the heating utility standard or non-heating utility standards.  In certain circumstances, actual costs are allowed.  

a. Heating Utility Standard

Households that are responsible for paying primary heating costs separate from their rent or mortgage are allowed the heating utility standard.  The heating utility standard includes the costs for home heating fuel (fuel oil, natural gas, liquefied petroleum gas, coal, wood or other heating fuel), and other non-heating utility costs including electricity, water, sewer, phone, garbage collection, and cooking fuel.  The heating utility standard is also given to:

• Households responsible for paying heating fuel costs to a vendor or utility company, even when charged irregularly, such as periodic propane or fuel oil fill-ups.
• Households responsible for paying heating fuel costs to their landlords, who charge the tenant on the basis of individual usage, a flat rate separate from their rent, or for excess heating costs.
• Households receiving Heating Assistance or energy assistance administered by a Native organization, even when the household is not responsible for heating costs.  These households are given the heating utility standard for the full year for which they received heating assistance.

Note:

Eligibility Technicians must review ECOSEnergy Community Online System for Heating Assistance eligibility prior to making an eligibility determination. 

For Native organization energy assistance eligibility, verification must be received from the Native organization prior to making an eligibility determination.  See HAP Addendum B for an updated list of HAP Tribal Providers. 

• Households in public housing or that receive Section 8 Housing Choice Voucher subsidies that are charged for heating costs.
• Households who can verify that they pay for heating expenses that are billed in another name.
• Households who have their heat covered by condominium and association fees, if the fee includes heat.

Temporary use of another heating source for which the household is not charged does not end entitlement to the heating utility standard.

When the residence is shared, each household who is responsible for paying at least a portion of the heating costs is entitled to the full heating utility standard.

See Addendum 4 for the heating utility standard amounts by utility region.  For additional instructions, refer to EISEligibility Information System Procedures 2004-1.

Households are not entitled to the heating utility standard when:

• They use wood for their primary heating source but do not pay for it.  The costs of gathering the wood, such as gas and oil for chain saws and transportation to get the wood, cannot be counted since the shelter cost is only allowed for the heating fuel itself.
• The only heating costs they are responsible for are for supplemental heating sources, such as the operation of a space heater, electric blanket, or heat lamp.

b. Non-Heating Utility Standards

Non-heating utility standards are given to households that are responsible for electricity, water, sewer, and/or phone costs, yet are not responsible for paying heating costs.  Each utility standard is separate; households may be entitled to one or all of the non-heating utility standards.  The non-heating utility standard is given to:

• Households responsible for paying utility costs to a vendor or utility company.
• Households in public housing or that receive Section 8 Housing Choice Voucher subsidies that are charged for non-heating utility costs.
• Households responsible for paying utility costs to their landlords, who charge the tenant on the basis of individual usage, a flat rate separate from their rent, or for excess utility costs.

When the residence is shared, each household responsible for paying at least a portion of the non-heating utility is entitled to the full non-heating utility standard.

See Addendum 4 for the non-heating utility standard amounts by utility region.  For additional instructions, refer to EIS Procedure 2004-1.

c. Actual Utility Costs

Households are allowed actual utility costs when:

• They are not entitled to the heating utility standard and have costs such as garbage collection, cooking fuel, and natural gas for water heaters that are not covered by a non-heating utility standard.
• Some or all of the members of a household occupy two residences because of employment or training away from home, and the household is responsible for the cost of heating at least one of the residences.  In this case, the household may claim either one heating utility standard or actual utility costs for both residences.  

Exception:  

If actual costs are used, only the basic service fee for one telephone is allowed.

3. Shared Shelter Costs

The household is allowed the full heating or non-heating utility standard when:

• The household shares a heating or non-heating utility cost with an individual who is not a member of the SNAP household.
• The household in a shared living situation is solely responsible for the utility cost.

If questionable, the household must provide documentation showing:

• A member of the household is responsible for the shelter cost when a shelter cost is billed to the individual who is not a member of the household.
• The amount of the shelter cost they are responsible for when the household is responsible for only a portion of a non-utility shelter cost, such as when they are responsible for paying only half the rent.

4. Shelter Costs Paid by a Third Party

Shelter costs are allowed when paid by:

• The Heating Assistance Program or an energy assistance program administered by a Native organization; or,
• A countable vendor payment.  Shelter costs paid by a non-household member with funds that are legally obligated and otherwise payable to the household (such as court-ordered child support) are allowed as a shelter cost.  The money used to pay this cost is countable unearned income per MS 602-3B(6), Countable Vendor Payments.

5. Shelter Costs Allowed for an Unoccupied Home

a. Shelter costs for a home temporarily unoccupied by the household because of medical reasons, a natural disaster, casualty loss, employment or training are allowed as long as:

• The household intends to return to the home
• Any current occupants are not claiming shelter costs for SNAP purposes; and,
• The home is not rented or leased during the household’s absence.
• The costs for both the unoccupied home and the home in which the household is currently living are allowed.

b. Shelter costs for two residences are allowed when the household moves in the middle of the month and has shelter expenses for both residences

Note:  

The household is allowed the heating utility standard or non-heating utility standard for only one residence.

6. Homeless Shelter Deduction

Households in which all members are homeless may be allowed a standard deduction of $180.  

In order to receive the deduction, the household must incur some shelter expense.  If the household is allowed the homeless standard deduction, they are not allowed other shelter or utility deductions such as gas for cooking or a minimal fee charged by some homeless shelters.  The household may choose to use actual expenses instead of the homeless standard deduction if they believe their expenses exceed the $180 allowed. If the shelter expense is to help with heat, allow the SUDStandard Utility Deduction as this deduction would be more beneficial to the client.

If the homeless shelter deduction is allowed, code the expense on the DEMHDependent/Medical/Household Expenses Screen as HS $180.

7.  Verification of Shelter Costs

The household must verify shelter costs:

• At initial application

Note:  

If obtaining verification of expenses would delay the initial application, the household may choose to have the application processed without the deduction.  The caseworker will determine the household's eligibility and allotment without the deduction if the expense is not verified within 30 days of the application filing date.

• During the certification period, when the household reports their shelter costs have changed.

• At recertification, when the household reports new shelter costs or when the previously verified expenses have changed by more than $25, or the information is outdated, as explained in MS 604-3(E)(1).

When a utility standard (heating or non-heating) is allowed, the caseworker only needs to verify that the household is responsible for the type of utility expense being claimed, such as the heat.  The amount of the monthly utility expense does not matter.  When actual non-heating utility costs are allowed as outlined in MS 602-4(E)(2)(c), the caseworker must also verify the monthly utility costs.

When the household has recently moved into the home and has not yet received a bill, the caseworker can verify the household’s responsibility for the cost by contact with the landlord or by confirming with the utility company that the household has an active account with them.

Note:

Shelter costs for households living in subsidized housing must be verified at initial application, during the review period or at review if the amount has changed more than $25.00, if the client has moved to a new location, or the information is outdated as explained in MS 604-3(E)(1).
 

b. Acceptable Shelter Verification

Acceptable verification of shelter and utility costs includes contact from the company or person charging the cost (such as the landlord, utility company, mortgage holder) or documentation, such as a lease agreement showing who is responsible for paying for utilities.

Itemized receipts showing monthly charges are acceptable verification of the monthly charges. Receipts showing only an amount paid are generally not acceptable since the amount paid may include additional charges such as late fees that are not allowed.

The following table provides examples of acceptable shelter cost verification.