How to Certify Households that Share Custody of Children

A household may report to you that its members include children who are part of a joint custody arrangement. That is, the children live part of the time with the household and part of the time with their other parent, who doesn’t live in the unit. 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.

HUD Handbook 4350.3 spells out the rules on handling children who are part of joint custody agreements. Here’s a rundown on how to do it right.

Counting Child as Household Member

Whether you count a child who’s part of a joint custody arrangement depends on how much time the child spends living in the 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 [HUD Handbook 4350.3, par. 3-6(E)(4)(b)]. This means you should also count any unearned income of the child, such as SSI, child support payments, or welfare payments, and give the household a $480 deduction for the child. And if the child is under 13, give the household a deduction for child care expenses [HUD Handbook 4350.3, par. 5-10(B)].

Example: Jane shares custody of her two sons with her ex-husband. The sons live in the unit every other week, and each gets $400 a month in SSI. Count the sons as household members because they live in the unit at least 50 percent of the time. This means you should count the household as having three members for purposes of determining eligibility and unit size. Also count $800 per month in unearned income based on each of the sons’ SSI payments and give the household a $960 dependent deduction (2 x $480) for both sons.

If child lives in unit less than 50 percent of time. If the child lives in the unit less than 50 percent of the time (for example, the child lives in the unit only on weekends), don’t count the child as a household member. And don’t count the child’s unearned income or give the household any dependent or child care deductions for that child.

Example: Jack shares custody of his daughter Zoe with his ex-wife. Zoe lives in Jack’s unit on Friday evenings, Saturdays, and Sundays and lives with her mother across town the rest of the week. Zoe gets $300 a month in SSI, and Jack pays a babysitter $50 on Saturdays so he can go to work. Don’t count Zoe as a household member for eligibility or unit size purposes. And don’t count Zoe’s SSI income or deduct any allowances, including the $50 a week Jack pays in child care expenses.

Applying Special Rules When Both Parents Live in Assisted Housing

Special rules apply if a child is part of a joint custody arrangement between two households that both live in assisted housing.

Count unearned income and apply dependent deduction for household with primary custody. HUD makes clear that only one household can claim the child as a dependent (to get the $480 dependent deduction) and count any unearned income of that child. This is the household with “primary” custody [Handbook 4350.3, par. 5-10(A)(4)]. The other household neither gets the deduction nor counts the unearned income.

How do you determine whether the household you’re certifying has primary custody? Unfortunately, the answer isn’t always clear, especially if there’s a dispute between the households about who gets to claim the dependent deduction. HUD suggests you try asking for a copy of a court order saying which parent has primary custody or asking for IRS tax returns showing which parent claimed the child for income tax purposes [Handbook 4350.3, par. 5-10(A)(4)].

Example: John shares custody of his son, Moe, with his ex-wife Jane, who lives in another building at your site. John has primary custody, according to a court-ordered custody arrangement. Moe gets $400 a month in SSI. When certifying John’s household, give him the $480 dependent allowance for Moe, and count Moe’s $400 per month in SSI. But when certifying Jane’s household, don’t give Jane the dependent deduction or count Moe’s SSI income.

Split expenses for child care deduction. If a household shares custody of a child and the other parent also lives in assisted housing, the two assisted households with joint custody may split the child care expenses for that child [HUD Handbook 4350.3, par. 5-10(B)(4)]. This means that each household can deduct its child care expenses.

Example #1: In the example above, John pays a babysitter $175 a week so he can go to work, and Jane pays a babysitter $75 a week so she can attend classes. Because each household lives in assisted housing, each household can claim their child care expenses for Moe.

But before allowing the deduction, you must be sure to ask the household to document the custody arrangement (for example, by showing you the court order or custody agreement). You must also ask the household to document the total expenses that both households claim so you can be sure that the total expenses claimed by both households don’t exceed the cost of the actual time the child spends in care. This means you must get the child care provider to verify the amount that the other assisted household pays for child care, just as you must for the household that lives at your site.

Example #2: Assuming the same facts as in the above example, ask John to document the custody arrangement he shares with Jane. Also ask John to give you proof of both his and Jane’s child care expenses, including the name and address of each child care provider, so you can verify the expenses and make sure that the total that both households claim doesn’t exceed $250 a week.