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4.6.7 Shelter and Utility Deduction

4.6.7.1 Shelter and Utility Deduction Introduction

4.6.7.2 Allowable Shelter Expenses

4.6.7.3 Standard Utility Allowances

4.6.7.4 Shelter Deduction During a Temporary Absence

4.6.7.5 Shelter Deductions for Group Living Arrangement Residents

4.6.7.6 Shelter Deduction for Homeless Food Units

4.6.7.1 Shelter and Utility Deduction Introduction

The shelter deduction is determined by the food unit’s reported and verified monthly expense obligation for the current residence for shelter .

Deduct shelter and utility obligation amounts (not actual amount paid) which exceed 50% of the food unit's net income after all other deductions are made. If shelter and utility obligation amounts (not actual amount paid) are less than 50% of the food unit's income, do not allow a deduction.

The shelter and utility deduction cannot exceed the shelter maximum unless the food unit includes an elderly, blind, or disabled individual. Food units that include elderly, blind, or disabled individuals have no shelter cap.

Private payments and loans

Sometimes a relative or friend who is not a food unit member will pay the food unit's shelter directly to the provider or landlord on behalf of the food unit. In such cases, the eligibility worker should determine if the payment is a loan.

If the payment is a loan, it is excluded from income, and the expense is allowed in the shelter computation. If the payment is not a loan and a relative or friend makes the vendor payment, it must be excluded from income and the shelter expense is not allowed as a deduction.

4.6.7.2 Allowable Shelter Expenses

Shelter expenses that are deductible include:

1. Rent

2. Home mortgage and property taxes (if not in the mortgage)

3. Countable utility expenses

4. Mobile home lot rent and loan payments

5. Insurance on the structure (if not included in the mortgage). If a household has a homeowner's insurance policy that includes insurance on the structure and household contents, but the costs cannot be separately identified, the total cost is allowable. Note: renter’s insurance is not an allowable shelter deduction.

6. Second mortgages (regardless of what the mortgage is used for)

7. Special assessments.

8. Condominium fees or condo association fees.

Do not count as shelter or utility expenses such surcharges as pet expenses, extra garage rentals, or air conditioning surcharges. The monthly amount of rent should be taken into consideration each month when the shelter deduction is determined without regard to when the rent is actually paid.  Only allow current monthly expenses.  DO NOT include arrearages, late charges or discounts for early payment.

Disregard HUD US Department of Housing & Urban Development US Department of Housing & Urban Development and FMHA Farmer's Home Administration Farmer's Home Administration payments paid directly to the landlord or mortgage holder as an expense. Only include the amount the household owes after the HUD or FMHA payments as a rent expense.

Do not allow in-kind payments as a shelter deduction. This includes arrangements such as receiving free rent for providing child a person's biological, step, or adopted son or daughter, regardless of age, care, or other services.  In these situations, no rent deduction is allowed, no income is counted and no child care deduction is allowed.

Include costs for the repair of damages to the FS FoodShare FoodShare group's home due to a natural disaster as a shelter expense. Examples of natural disasters are fires, floods, hurricanes, and tornadoes.

Do not count expenses for repairs that have been or will be reimbursed to the food unit by any private or public relief agency, insurance company, or any other source.

If anyone in the household shares the shelter cost with the FS FoodShare group, create a separate shelter screen for each contributor, using the correct obligation amount for which each contributor is responsible.

When a self employed person claims the total shelter costs as a business expense, do not allow any shelter deduction.  If a they claim a percentage of it's shelter costs as a business expense, the remaining percentage is a shelter deduction.

4.6.7.3 Standard Utility Allowances

Effective April 1, 2009, all FS Assistance Groups will receive the full heating standard utility allowance (HSUA) in the FoodShare budget.  Wisconsin FoodShare has received approval from the Food and Nutrition Service (FNS Food and Nutrition Service) to expand eligibility for the HSUA to all FS households that anticipate receiving an energy assistance payment..

All FS households can reasonably anticipate that they will receive an annual energy assistance payment of at least $1. At the end of each state fiscal year (most likely in June) DHS Wisconsin's Department of Health Services. Until July 1, 2008 it was known as the Department of Health and Family Services. will implement a reconciliation tape match with the Department of Administration to determine which FS households did not already receive a WHEAP payment. Once this match is completed DHS will add a $1 benefit (in lieu of a WHEAP payment) to the FS household’s EBT card.

The actual date of the energy assistance payment is not important; anticipation of the payment is.  Households receiving FS do not need to wait until they receive an energy assistance payment to be eligible for the HSUA, because they can anticipate receipt of either $1 of energy assistance or a WHEAP payment.

Verification of receipt of WHEAP or obligation of a heating expense is no longer required to receive the HSUA.  Verification of other utilities is also no longer required since the HSUA is the highest utility standard.

See 8.1.3 Deductions for the current amount.

4.6.7.4 Shelter Deduction During a Temporary Absence

Allow shelter and utility expenses for a dwelling the food unit is temporarily absent from when the absence is caused by:

1. Employment or training away from home,

2. Illness, or

3. Abandonment due to a natural disaster or casualty loss.

Do not deduct shelter or utility expenses if:

1. The food unit does not intend to return to the home, or

2. Any current occupants of the home receive FS and are being allowed the shelter and/or utility expense deductions, or

3. The food unit rents or leases the home to others during their absence.

4.6.7.5 Shelter Deductions for Group Living Arrangement Residents

Allow the appropriate utility allowance for a resident of a qualified group home if the utilities are identified separately. Residents of group living arrangements have no limit on the amount used as a shelter deduction because they are disabled.  Allow shelter and medical deductions for room and medical costs that can be separately identified.

Sometimes room, meals, and medical costs cannot be identified separately. If the cost of room and meals are combined into one amount, the amount of the payment that exceeds the maximum allotment for a one-person food group can be used as the shelter deduction.

If the amount paid for medical and shelter cost cannot be separately identified by the group home, no deduction is allowed for the cost.

4.6.7.6 Shelter Deduction for Homeless Food Units

Homeless food units may be eligible for a shelter deduction using shelter expenses if they incur monthly expenses for shelter and a standard utility allowance (4.6.7.3) if they reasonably anticipate receiving an energy assistance payment.

Determine eligibility for shelter residents using only their income and assets. Include only expenses they are responsible for. Count room payments to the shelter in the food unit's shelter expenses.

Do not include back payments on previously owed shelter expenses since the expenses were incurred before the budgeting period. The exception to this is vendor payments that must be repaid. Food units who have shelter expenses paid with a vendor payment can count the actual shelter costs if they repay the vendor payment.

This page last updated in Release Number: 09-02

Release Date: 06/26/09

Effective Date: 06/26/09