Moving to Work (MTW) - Optional Deductions and Rent Structures

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MTW sites have employed various rent stuctures and optional deductions to serve as incentives for families to work, lessen the administrative burden on the staff and decrease the intrusion into families lives. While some of the MTW initiatives can only be implemented by MTW sites (since they can have provisions of the Housing Act of 1937 waived), other initiatives can be implemented by any housing authority.

The Quality Housing and Work Responsibility Act (QHWRA) made significant changes to the income and rent policies in the public housing program. Flexibility was given to housing authorities to establish optional deductions and change the percentage of rent that can be charged. An HA may create a "reasonable system" for public housing rents, so long as the resulting rent is not higher than the income-based rent using the Federal deductions and formula. For the Housing Choice Voucher program, HAs are only permitted to use the Federal deductions and formula.

Optional deductions may be implemented by HAs, however, the deductions will be at the HA's expense, since rent lost from the deductions will not be compensated by increases in operating subsidy.

Some of the optional deductions implemented by MTW sites include:

• Provide an annual $1,200 annual transportation deduction for each family with one member employed at least 32 hours per week at minimum wage
  

• Deduct the out-of-pocket medical and dental insurance payments made by working families

• Deduct the interest income earned from bank assets from the annual income

• Deduct overtime and bonuses earned from the annual income

• Exclude 25 percent in the increase of employment income for individuals not qualifying for Earned Income Disallowance

• Provide an additional $480 deduction for child support paid outside the home
  

• Deduct FICA, workers compensation and Medicare from the gross earnings of an employed person
  

To reduce the administrative burden on PHA staff, some PHAs have adopted a Fixed Rent Interim Reexamination system. Under the Fixed Rent system, the PHA will decrease the rent if the family's income decreases. Increases, however, will only be processed if the family has already received an interim decrease.