Congress Updates List of Federally Mandated Income Exclusions

On May 20, the Federal Register published an updated list of income exclusions specifically mandated by federal laws. There are three new exclusions and changes to two of the existing exclusions, and due to the addition of Exclusion (16), the exclusions following it have been renumbered.

The changes to two of the existing exclusions involve payments to or income by individual Indians. Exclusion (7) still excludes the first $2,000 of per-capita shares and income received by individual Indians in trust or restricted lands, as it did before. But now the exclusion does not include proceeds of gaming operations regulated by the Commission. And Exclusion (23) still excludes payments to individual Indians per the agreement in the Elouise Cobell case. The change is that these payments are excluded for a period of only one year from receipt.

It’s important to note there are several other income exclusions in Handbook 4350.3 that are mandated by HUD, rather than by Congress. The following are the new added exclusions:

• (16) excludes allowances paid to children of Vietnam veterans and of certain Korean veterans born with spina bifida as well as children of female Vietnam veterans born with certain birth defects.
• (24) excludes amounts in an “individual development account,” per the Assets for Independence Act.
• (25) excludes per-capita payments from the proceeds of Indian Tribal Trust cases described in PIH Notice 2013-30.

Here’s the complete list of current federally mandated excluded incomes for HUD:

Current Federally Mandated Excluded Incomes for HUD

(1)     The value of the allotment provided to an eligible household under the Food Stamp Act of 1977;

(2)    Payments to Volunteers under the Domestic Volunteer Service Act of 1973;

(3)    Certain payments received under the Alaska Native Claims Settlement Act;

(4)    Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes;

(5)    Payments or allowances made under the Department of Health & Human Services’ Low-Income Home Energy Assistance Program;

(6)    Income derived from the disposition of funds to the Grand River Band of Ottawa Indians;

(7)    The first $2,000 of per capita shares received from judgment funds awarded by the National Indian Gaming Commission or the U.S. Claims Court, the interests of individual Indians in trust or restricted lands, and the first $2,000 per year in income received by individual Indians from funds derived from interests held in such trust or restricted lands. This exclusion does not include proceeds of gaming operations regulated by the Commission;

(8)    Amounts of scholarships funded under Title IV of the Higher Education Act of 1965, including awards under Federal Work-Study programs or under the Bureau of Indian Affairs student assistance programs. For Section 8 programs only, any financial assistance in excess of amounts received by an individual for tuition and any other required fees and charges under the Higher Education Act of 1965, from private sources, or an institution of higher education, shall not be considered income to that individual if the individual is over the age of 23 with dependent children;

(9)    Payments received from programs funded under Title V of the Older Americans Act of 1965;

(10)    Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund (101) or any other fund established pursuant to the settlement in In Re Agent Orange Liability Litigation, M.D.L. No. 381 (E.D.N.Y.);

(11)    Payments received under the Maine Indian Claims Settlement Act of 1980;

(12)    The value of any child care provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 1990;

(13)    Earned income tax credit (EITC) refund payments received on or after January 1, 1991, for programs administered under the United States Housing Act of 1937, title V of the Housing Act of 1949, Section 101 of the Housing & Urban Development Act of 1965, and sections 221(d)(3), 235, and 236 of the National Housing Act;

(14)    Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation (95);

(15)    Allowances, earnings and payments to AmeriCorps participants under the National and Community Service Act of 1990;

(16)    Any allowance paid under the provisions of 38 U.S.C. 1833(c) to children of Vietnam veterans born with spina bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean service veterans born with spina bifida;

(17)    Any amount of crime victim compensation (under the Victims of Crimes Act) received through crime victim assistance (or payment or reimbursement of the cost of such assistance) as determined under the Victims of Crimes Act because of the commission of a crime against the applicant under the Victims of Crimes Act;

(18)    Allowances, earnings and payments to individuals participating in programs under the Workforce Investment Act of 1998;

(19)    Any amount received under the Richard B. Russell School Lunch Act and the Child Nutrition Act of 1966, including reduced-price lunches and food under the Special Supplemental Food Program for Women, Infants, and Children (WIC);

(20)    Payments funds or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990;

(21)    Payments from any deferred U.S. Department of Veterans Affairs disability benefits that are received in a lump sum or in prospective monthly amounts;

(22)    Compensation received by or on behalf of a veteran for service connected disability, death, dependency, or indemnity compensation as provided by an amendment by the Indian Veterans Housing Opportunity Act of 2010 to the definition of income applicable to programs authorized under the Native American Housing Assistance and Self-Determination Act (NAHASDA) and administered by the Office of Native American Housing Programs;

(23)    A lump sum or a periodic payment received by an individual Indian pursuant to the Class Action Settlement Agreement in the case entitled Elouise Cobell et al. v. Ken Salazar et al., 816 F. Supp.2nd 10 (October 5, 2011 D.D.C.), for a period of one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010;

(24)    Any amounts in an “individual development account” as provided by the Assets for Independence Act, as amended in 2002;

(25)    Per capita payments made from the proceeds of Indian Tribal Trust Cases as described in PIH Notice 2013-30 “Exclusion from Income of Payments under Recent Tribal Trust Settlements;” and

(26)    Major disaster and emergency assistance received by individuals and families under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (93, as amended) and comparable disaster assistance provided by States, local governments, and disaster assistance organizations.