Reminder to Exclude Deferred VA Disability Benefits from Annual Income

July 14, 2009
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On June 18, HUD updated Housing Notice 09-03, Exclusion of Deferred Department of Veterans Affairs Disability Benefits from Annual Income. The updated notice amends Section III so that it is consistent with the Housing and Economic Recovery Act of 2008 (HERA).

As a result of HERA, any deferred Department of Veterans Affairs disability benefits that are received in a lump sum or in prospective monthly amounts by a tenant who resides in a project-based Section 8 unit, shall be excluded as annual income as of July 30, 2008.

This income exclusion is similar to the existing exclusion for deferred periodic amounts from supplemental social security income and Social Security benefits (24 CFR 5.609(c)(14). Although the full amount of periodic Social Security payments is included in annual income according to 24 CFR 5.609(b)(4), the deferred amount resulting from the delayed start of the periodic payment is not included in the annual income. In the same way, the full amount of periodic VA disability benefit payments will continue to be included in annual income, but the deferred amount resulting from the delayed start of the disability payments will not be included.

A payment qualifies as a VA disability benefit if it is identified as a disability benefit in the VA benefit award letter, regardless of whether or not the family member who is the beneficiary of the award would qualify as a person with disabilities under HUD’s regulations. For existing tenants, the new exclusion for deferred payments is applicable at the time of the annual or interim recertification of income.

The notice can be found at http://www.hud.gov/offices/adm/hudclips/notices/hsg/.