The Trainer — March 2014
Ensuring Prompt Payment of Vacancy Claims; Calculating Medical Expense Deductions
In this month’s feature, we discussed how to file vacancy loss claims with HUD. Once a household has moved out of an assisted site and the unit is ready for reoccupancy, you can ask HUD to pay part of the contract rent for the vacant unit until a new eligible household moves in. You must follow HUD's detailed requirements for submitting these claims—if you leave out required documents, your local HUD office or contract administrator will most likely deny your claim or send it back and ask you to resubmit it with the required documents.
In this issue’s Income Calculations article, we discussed the new mileage rates set by the Internal Revenue Service. These are important to know when calculating the adjusted annual income of households that qualify for a medical expense deduction. If some of your elderly or disabled households have unreimbursed medical expenses that include travel expenses to and from treatment, you can include mileage to and from medical appointments and to and from regular medical treatments as part of the medical expense deduction. Beginning Jan. 1, 2014, the standard mileage rates for the use of a car is 23.5 cents per mile driven for medical purposes.
QUIZ
QUESTION #1
For all sites, HUD will pay 80 percent of a vacant unit's daily contract rent from the date the unit was available for occupancy until the date a new household moves in—for a period of up to 60 days. True or false?
a. True.
b. False.
QUESTION #2
Vacancy loss claims may not be paid for the days the unit was being prepared for occupancy. True or false?
a. True.
b. False.
QUESTION #3
When filing a vacancy loss claim, you must submit evidence, such as copies of ads, showing your attempts to fill the vacancy, unless you filled it from your waiting list. True or false?
a. True.
b. False.
QUESTION #4
After you’ve submitted your vacancy loss claim, how long must you keep a copy of the submission package in your files?
a. Three years.
b. Five years.
c. Seven years.
d. 10 years.
QUESTION #5
The medical expense deduction is permitted only for households in which the head, spouse, or co-head is at least 62 years old or is a person with disabilities. If this classification applies to a household, you must include out-of-pocket medical expenses for only the household members who are elderly or disabled. True or false?
- True.
- False.
QUESTION #6
The annual income of a household that qualifies for a medical expense deduction is $15,000, and their total medical expenses, which include travel to and from treatment, is $2,500. How much is their medical expense deduction?
a. $2,500.
b. $2,050.
c. $450.
d. $250.
ANSWERS & EXPLANATIONS
QUESTION #1
Correct answer: b
False. You can submit a vacancy claim for this amount at Section 8, Section 202/8, Section 202 PAC, Section 202 PRAC, and Section 811 PRAC sites. But a claim for a unit under a Section 202 PRAC or Section 811 PRAC may not exceed 50 percent of the operating rent for up to 60 calendar days for each unit vacancy. And for a claim for a unit under Section 8 Property Disposition Set Aside, the claim may not exceed the housing assistance payment for the number of days between the date the resident vacated and the last day of the month, plus 80 percent of contract cost for any days the unit remains vacant in the following month.
QUESTION #2
Correct answer: a
True. The claim period begins the day the unit is available for occupancy. For example, if a unit was vacated on Feb. 5, cleaned Feb. 5 through Feb. 8, and available for occupancy on Feb. 9, the claim period would begin on Feb. 9.
QUESTION #3
Correct answer: b
False. If you filled the unit from a waiting list, HUD says it wants evidence of the status of your waiting list for the unit's size and type. If the unit wasn’t filled from the waiting list(s), documentation of marketing efforts must be included, such as copies of advertising or invoices for advertising expenses that substantiate the date marketing occurred, in accordance with the Affirmative Fair Housing Marketing Plan.
QUESTION #4
Correct answer: a
HUD requires you to keep a copy of the submission package in your files for three years after the date the claim was paid.
QUESTION #5
Correct answer: b
False. You must include out-of-pocket medical expenses for all household members except live-in aides, even if the other household members are not elderly or disabled [HUD Handbook 4350.3, par. 5-10(D)(2)].
QUESTION #6
Correct answer: b
To obtain the medical expense deduction, you would subtract 3 percent of annual income from the total medical expense. So first, you would calculate 3 percent of $15,000, which is $450. Then you’d subtract $450 from the total medical expense of $2,500, to get the allowable medical expense of $2,050 ($2,500 - $450).