Department of Human Services
Food Stamp Online Policy Manual
Treatment of Income
(i) Monthly shelter costs is the amount in excess of 50% of the household’s income after all deductions have been allowed. The shelter deduction cannot exceed the maximum unless the household contains a member who is elderly or disabled. These households will receive an excess shelter deduction for the monthly cost that exceeds 50% of the household’s monthly income after all applicable deductions. The maximum shelter deduction is subject to change annually. Shelter costs include only the following.
(I) Continuing charges for the shelter occupied by the household, including rent, mortgage, condominium fees or other continuing charges leading to the ownership of shelter, such as loan repayments for the purchase of a mobile home, including interests on such payments.
If a recipient takes a second mortgage or loan, in which the loan is secured by a lien on the homestead property by the lender, payments on these secured loans meet the criteria of continuing charges for the shelter and are considered shelter costs. This true is regardless of what the loan is actually for. Payments made on unsecured or personal loans are not considered shelter costs.
(II) Property taxes, state and local assessments, and insurance on the structure itself, but not separate costs for insuring furniture or personal belongings.
(III) Charges for heating, cooling, and cooking fuel; electricity; water and sewer; garbage and trash collection fees; the standard telephone allowance; and fees charged by the utility provider for initial installation of utility cost.
(IV) The above shelter (I - III) costs for the home if not actually occupied by the household because of employment away from home, illness or abandonment of the home due to natural disaster or casualty loss. For the costs of a vacated home to be included in shelter costs, the household must intend to return to the home; the current occupants of the home, if any, cannot be claiming the shelter costs during the absence of the household; and the home must not be leased or rented in the household’s absence. Households claiming utility costs for unoccupied homes must verify the actual expenses and the standard utility allowance cannot be substituted.
(V) Charges for the repair of the home which was substantially damaged or destroyed due to a natural disaster such as fire or flood. Shelter costs cannot include charges for repair of the home that have been or will be reimbursed by private or public relief agencies such as insurance agencies or from any other source.
(ii) Payments NOT Included in Shelter Costs Are:
(I) fees charged for one-time deposits on utilities;
(II) separate costs for insuring furniture or personal belongings;
(III) repairs or replacement of any appliance, well, septic tank, or any portion of the home due to wear and tear or mechanical problems;
(IV) any costs related to housing not actually occupied by the household, except as specified in 1240-1-4-.17-(8)-(f)-5-IV above;
(V) down payments, closing costs, discount points, and other costs incidental to purchase and the closing of a mortgage;
(VI) costs of drilling a well or installing a septic tank; or
(VII) site preparation to locate a mobile home.
(iii) Homeless Households Shelter Standard
Homeless households that incur or expect to incur shelter costs during the month shall be eligible for a HH shelter standard. Households which receive free housing and utilities throughout the month would not be eligible.
A homeless household which uses the special standard is not entitled to the standard utility allowance since average utility costs are included in the estimate.
Homeless households with shelter costs higher than the HH standard would be able to claim these costs if they can be reasonably verified. If there is no such verification the HH standard would be used.
The caseworker shall use prudent judgment in determining if verification obtained is adequate. Once there is a noticeable pattern to a homeless household’s shelter costs, the certification period can be adjusted accordingly. The household is still required to report changes in their circumstances, including shelter costs.
(iv) Standard Utility Allowance (SUA)
The standard utility allowance (SUA) is used in calculating the shelter costs of those households which directly incur heating or cooling expenses on a regular basis separate and apart from their rent or mortgage payment, including residents of rental housing who are billed on a monthly basis by their landlords for actual usage as determined through individual metering.
(v) Standard Telephone Allowance
A standard telephone allowance is to be used in calculating the shelter costs for households which incur a separate telephone expense, but are not entitled to the utility allowance.
(vi) Actual Utility Expenses
Actual utility costs may be deducted if the household can verify these costs, and it can be reasonably anticipated that the costs will continue for the length of the certification period.
A household living in public housing or other rental housing which has central utility meters and charges the household only for excess heating or cooling costs cannot be permitted to use the SUA. These households may elect to have their excess utility costs allowed in the billing month, or have the excess averaged forward over the interval between scheduled billings.
If a household wishes to claim utility expenses for an unoccupied home, the household must provide verification of the actual utility expenses for the unoccupied home. The SUA cannot be used for unoccupied homes.
(vii) Household’s Option
At the time of certification, explain to the household that it may deduct its actual utility costs rather than the SUA throughout the certification period, if the household can verify these costs. The household may switch between the SUA and actual costs at recertification only.
The limit on the number of times a household may switch between actual costs and the SUA applies only to those times it actually has a choice. It does not apply when the household must switch from the SUA to actual expenses because it is no longer eligible for the SUA (i.e., the household no longer incurs heating or cooling expenses).
(viii) When the Standard Utility Allowance CAN be Used
The standard utility allowance (SUA) may be used:
(I) When the household is billed on a regular basis for heating or cooling expenses separate and apart from its rent or mortgage. The standard allowance includes the cost of heating and/or cooling, cooking fuel, electricity, the basic service fee for one telephone, water, sewage, and garbage and trash collection. A cooling cost is a verifiable utility expense relating to the operation of air conditioning systems or room air conditioners. Only households which directly incur a heating or cooling expense on a regular basis separate and apart from their rent or mortgage are entitled to the standard utility allowance.
A household billed less often than monthly for its heating/cooling costs, if otherwise eligible to use the standard allowance between billing months.
A household receiving LIHEAA payments is entitled to the standard utility allowance even if they do not incur heating or cooling costs separate from rent.
(II) When there is no rent or mortgage payment, such as when there is free use of a house or mobile home, or when the home mortgage is fully paid, if the household is otherwise eligible to use the standard utility allowance.
(III) When two or more households share a common residence and contribute to the common heating or cooling expense for the residence. Each household would be eligible to receive the SUA for the number of individuals in its respective household.
Example: A three-person food stamp household shares a residence and common utility costs (including heating and cooling) with a two-person food stamp household. While the actual utility bill comes to the head of the three-person household, the head of the two-person household has provided verification of actual utility payments.
The three-person household may be allowed the standard utility allowance (SUA) for 3 and the two-person household may be allowed the SUA for 2.
(ix) When the Standard Allowance for Utilities Is NOT to Be Used
(I) the household has no utility expense such as when all utilities are furnished as in-kind benefit;
(II) the household wishes to claim expenses for an unoccupied home;
(III) households are charged only for water, garbage and trash collection, sewage, telephone, cooking fuel, or any combination of these expenses. To be eligible for the standard allowance, the household must be directly billed on a regular basis for its heating and/or cooling costs;
(IV) a household lives in a public housing unit or other rental housing unit. The household is charged only for excess utility costs, regardless of whether the unit is individually or centrally metered.
(V) a household that lives with another household (which receives the actual utility bill) sharing a common meter for utilities but residing in a separate residence, would not be eligible for the SUA but is entitled to actual costs paid to the household that receives the bill or the Basic Utility Allowance (BUA) as explained in 1240-1-4-.17-(8)-(f)-(5)-(xi).
Example: A household is billed for water and electricity. However it has no air conditioners and cuts its own firewood for heating. Its only expense is gasoline for a chain saw and matches for lighting the fire. This household would not be entitled to the SUA.
Example: A household rents an apartment where the gas heat is included in the rent payment. There is no air conditioning in the apartment. During the winter, the household runs a blower fan with electricity, even though it heats with gas. This household is not entitled to the SUA because its heating expense is provided in the rent payment and it does not incur a heating or cooling expense.
Example: Household A has a residence with a basement apartment which is separate from Household A’s residence. All utilities for both residences are on the same meter. Household B rents the apartment and pays rent and a portion of the electricity for cooling. Household A would be eligible for the SUA, but Household B would be eligible for the BUA or actual expenses.
(x) Eligibility for the Standard Utility Allowance for Households Receiving Energy Assistance or Other Vendor Payments for Utilities
An “energy assistance” payment is any payment made to a household or utility company, which is earmarked specifically to pay a household’s utility costs. These may be paid from federal, state, or local programs, private agencies, etc.
(I) Low Income Home Energy Assistance Act (LIHEAA)
LIHEAA payments made directly to the household or provider do not affect the household’s eligibility for the SUA. Households are entitled to the SUA even if the expense is totally covered by a LIHEAA payment.
(II) HUD and FmHA Utility Reimbursements
Households receiving HUD and FmHA reimbursements are entitled to the SUA if they incur heating or cooling costs that exceed the amount of the excluded payment.
(III) State and Local Energy Assistance and Other Vendor Payments
Energy assistance payments made directly to the household do not affect the household’s eligibility for the SUA if the household is otherwise entitled to it.
Consider energy assistance payments (other than LIHEAA payments) as vendor payments when they are made directly to the utility company (including checks made jointly to the household and the utility company).
To determine a household’s eligibility for the SUA when vendor payments are made to the utility company, follow the procedures outlined below.
- Determine the period the vendor payment is intended to cover (i.e., a month, a year, the heating or cooling season) and prorate the payment over that period.
- When the vendor does not specify the months the payment is to cover, consider the heating season as October through March, and the cooling season as April through September.
- Based on the prorated vendor payment, anticipate whether the household will have out-of-pocket heating or cooling expenses during the certification period over and above the costs covered by the vendor payment.
- If you anticipate that the household will have out-of-pocket heating or cooling expenses for any month of the certification period, allow the SUA (as shown in the example below).
- If you do not anticipate the household will have out-of-pocket heating or cooling expenses during any month of the certification period, do not allow the SUA.
- When the SUA is not allowed, but the household reports and verifies out-of-pocket expenses later in the certification period, allow the SUA at that point.
Example: Mr. Newman’s family applied for food stamps in August and will be certified for six months, ending January 31. They own their home and are responsible for the heating expenses. Mr. Newman reports that HUD (Section 8) pays $50 each month directly t o the utility company for his household’s expenses. The family’s utility bills are $40 to $50 monthly in the summer and early fall. However, they are as high as $100 per month during the late fall and winter.
Because we can anticipate that the household will have out-of-pocket heating expenses during at least one month during the certification period, we can allow the household the SUA for the entire certification period.
Example: Mrs. Woodard lives in an apartment and is responsible for heating and cooling expenses. She is elderly and was certified for a year as a one-person household beginning March, at which time she chose to use the SUA. The following November 5, she reported that a church deposited $600 with the utility company for her fall and winter heating costs.
The church did not specify the exact period the vendor payment was intended to cover. Therefore, it will be prorated over the entire heating season.
$600 divided by 6 (Oct. - March) = $100 month
Mrs. Woodard states that her heating costs never exceed $100 a month. Therefore, we cannot anticipate that she will have heating or cooling costs during any month remaining in the certification period (the certification ends 2/28). However, because she was responsible for paying her heating and cooling costs during at least one month of her certification period, Mrs. Woodard continues to be eligible for the SUA during the entire certification period.
Example: Mr. Redford’s family is certified for November through April. They are billed directly for heating and air conditioning. At certification, Mr. Redford provided verification that a county-funded energy assistance program paid $500 directly to the utility company for his winter heating costs. The program specified that the payment was to cover the family’s utility expenses for November through February.
$500 divided by 4 (Nov. - Feb.) = $125 per month
Mr. Redford states that his heating costs never exceed $125 per month. Although the vendor payment will pay the household’s entire heating costs in the months for which it is intended, the family again will have to pay its own heating and/or cooling expenses in March and April. (Consider the vendor payment as covering expenses only during the months for which it is intended, even when the payment exceeds the total expenses for this period.)
Because the household will have out-of-pocket heating or cooling costs during at least one month of the certification period, the SUA may be allowed for the entire certification period.
(xi) Basic Utility Allowance
The basic utility allowance (BUA) is an option for a food stamp household that incurs a utility expense but is ineligible for the SUA. The BUA may be used in lieu of actual costs. The BUA is not used when the household’s only utility expense is for a telephone.