Does HUD Count Disability as Income?

For individuals and families looking for housing assistance, programs offered by the Department of Housing and Urban Development (HUD) can be a lifeline. These programs help different groups, from low-income families to seniors and people with disabilities, and they each have their own income rules. But does HUD count disability as income? The short answer is yes, but the way these benefits are treated varies depending on the program.

With approximately 12.6% of the U.S. population living with a disability, understanding how HUD considers disability income is important for many households. Disability benefits, like Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), can significantly affect your eligibility for affordable housing programs.

HUD Programs Impact Whether HUD Counts Disability as Income

HUD administers and oversees a variety of programs, each designed to address specific housing challenges people face. The main programs provided by the department fall into three main categories.

Public Housing

Public housing provides affordable rental options for low-income families, elderly individuals, and people with disabilities. Managed by local housing authorities in partnership with HUD, this program provides essential housing opportunities for families with limited income. According to HUD, 15% of public housing households include at least one disabled adult, highlighting the importance of this program for individuals living with disabilities.

Housing Choice Vouchers (Section 8)

The Housing Choice Voucher Program, commonly known as Section 8, helps eligible families rent private-market housing by subsidizing a portion of their rent. These Section 8 vouchers are important in areas where housing costs far exceed income levels. For instance, the National Low Income Housing Coalition reports that fair market rents in many regions surpass 100% of monthly SSI payments, leaving low-income individuals with disabilities heavily reliant on assistance.

Multifamily Housing Programs

Through privately owned rental properties, HUD offers options like project-based rental assistance and supportive housing for individuals with special needs. These programs factor in disability benefits as part of income but often allow for deductions, such as medical or childcare expenses, to ensure fair eligibility.

To access HUD programs, those who want to know if HUD counts disability as income must apply through their local public housing agency (PHA). The application process involves providing detailed information about income, family composition and housing preferences. PHAs use this information to determine eligibility and, if approved, allocate resources based on individual needs.

Income Requirements for HUD Eligibility

HUD determines income eligibility based on the area median income (AMI) for a particular region. The AMI is the midpoint of a region's income distribution, meaning half of the households earn more, and half earn less. The department categorizes households into different income levels, which include:

• Extremely Low-Income: Earning 30% or less of the AMI.

• Very Low-Income: Earning 31%–50% of the AMI.

• Low-Income: Earning 51%–80% of the AMI.

In high-cost regions like San Francisco or New York City, these limits are significantly higher than in rural areas. For example, a family earning $25,000 annually might qualify as low-income in one area but fall under very low-income in another. This variability makes HUD’s nuanced approach to income calculations essential for tailoring support to local needs.

To calculate eligibility more accurately, HUD considers the Adjusted Gross Income (AGI). AGI includes all taxable income, referred to as inclusions, minus specific deductions, known as exclusions. This approach ensures a more precise representation of a household's financial situation and directly impacts how HUD counts disability benefits like SSDI and SSI.

For example, medical or childcare expenses may be deducted from AGI, reducing the overall countable income for families with disabilities. This nuanced process helps ensure that assistance is allocated fairly to those who need it most.

Inclusions in HUD Income Calculations

In HUD programs, "inclusions" refer to income sources that are counted when determining a household’s annual income. Here are some of the most common types of income HUD considers:

• Wages and Salaries: HUD counts any income you earn from work, whether it’s a full-time job, part-time side gig, or temporary work. It’s their way of factoring in the financial resources you bring in through employment.

• Social Security Disability Insurance: If you’re receiving SSDI benefits, these are included in HUD’s calculations. These payments are based on your work history and provide important financial support.

• Pensions and Retirement Income: Payments from pensions or retirement accounts also count. These are steady sources of income that HUD takes into account when determining your eligibility.

• Rental Income: HUD will factor in any income you receive from renting a property.

• Alimony and Child Support: Payments from alimony or child support are included in your income total since they help support your household’s financial needs.

Exclusions in HUD Income Calculations

"Exclusions" are specific types of income or expenses that HUD does not count when calculating a household's annual income. Here are the most common exclusions: 

• Medical Expenses: If you’re dealing with high medical costs, HUD gives you a break by excluding some of those expenses from your income. 

• Childcare Expenses: Paying for childcare can be a big expense, especially for working parents or students. HUD recognizes this and doesn’t count those costs in your total income.

• Educational Expenses: If you’re investing in education to improve your skills or career opportunities, certain education-related costs won’t count as income. 

• Income from Minors: Any money earned by children under 18 isn’t included in your household income. 

• Social Security Income (SSI): SSI benefits are usually excluded since they’re designed to support people with serious, long-term medical conditions. 

How HUD Considers Disability Benefits vs. Earned Income

When calculating eligibility for HUD programs, disability benefits like SSDI and SSI are treated differently from earned income, such as wages or salaries. Understanding these differences helps applicants navigate the eligibility process and determine how their income impacts access to housing assistance.

• Disability Benefits: Considered unearned income, SSDI and SSI are not tied to active work. These benefits often receive more flexibility in HUD’s calculations. For example, HUD may allow deductions like high medical costs, reducing the total countable income and making it easier for households with disabilities to qualify for assistance.

• Earned Income: Wages or salaries are treated as active income and typically reflect a household’s ability to work. Unlike disability benefits, earned income does not qualify for as many deductions, which can result in higher countable income and potentially less assistance.

For households with a mix of disability and earned income, these distinctions can influence placement within HUD’s income categories (extremely low-income, very low-income, or low-income) and the type of assistance they qualify for. Recognizing how these income sources interact is crucial for maximizing eligibility.

Use Disability Income To Secure HUD Housing

Understanding how HUD counts disability as income is the first step toward finding affordable housing. Programs like public housing and Section 8 help individuals and families with disabilities access safe and stable homes, and knowing how your income is calculated can make the process less overwhelming. 

Don’t let the process overwhelm you—there are resources available to help. Visit our Open Waiting Lists to discover affordable housing opportunities in your area and take the first step toward a better living situation.