The Trainer — March 2017
Calculating Income from Irregular Employment
In this month’s feature, we discussed HUD’s rules for calculating household income from irregular employment or “gig economy” jobs. Applicants or residents who earn money through these gig companies can make varying amounts of money from week to week and month to month. The rules for calculating income from irregular employment are different than those for calculating income from regular employment because these applicants or residents don’t have traditional jobs that pay them an annual salary that you can verify easily.
QUIZ
QUESTION #1
When calculating household income, you shouldn’t automatically exclude “temporary, nonrecurring, or sporadic” income. True or false?
a. True.
b. False.
QUESTION #2
When calculating the income of a self-employed or freelancing household member, you can allow for the accelerated depreciation of assets. True or false?
a. True.
b. False.
QUESTION #3
According the HUD model lease, a household must inform you if its income increases by $100 or more per month between recertification periods. True or false?
a. True.
b. False.
ANSWERS & EXPLANATIONS
QUESTION #1
Correct answer: a
True. Although HUD Handbook 4350.3 says that you must not count a household member’s income if it is “temporary, nonrecurring, or sporadic,” you should investigate before you exclude income for this reason. For example, when a household member tells you about income from ridesharing or other freelance jobs that appears to be temporary, nonrecurring, or sporadic, ask her questions to learn how much of this work she has done in the past few years and how much of it she expects to do this year. If you see a pattern and the household member says she expects to continue the work, it’s probably not temporary, nonrecurring, or sporadic—which means you must count it.
QUESTION #2
Correct answer: b
False. If an applicant or resident used an alternative method of depreciation rather than the straight-line method, HUD says you also must get from the household an accountant’s calculation of depreciation expense computed using straight-line depreciation rules.
QUESTION #3
Correct answer: b
False. All HUD model leases require households to tell you if the household’s income increases by $200 or more per month between recertification periods [Handbook 4350.3, App. 4]. If a household reports this type of increase, you must perform an interim recertification.