Introduction to Lump Sum Payments and Investments
The Department of Housing and Urban Development (HUD) has specific guidelines for determining annual income when it comes to lump sum payments and income from investments. These guidelines help establish eligibility for housing assistance and are essential for both residents and property owners to understand.
Lump Sum Payments: When to Count as Income
In most cases, lump-sum amounts received by a family, such as inheritances, insurance settlements, or proceeds from the sale of property, are considered assets and not income. However, there are certain situations where lump sum payments are counted as income:
- Social Security or SSI benefit income paid in a lump sum as a result of deferred periodic payments is excluded from annual income.
- For Section 8 tenants only, deferred Department of Veterans Affairs (VA) disability benefits received in a lump sum or prospective monthly amounts are excluded from annual income.
- Settlement payments from claim disputes over welfare, unemployment, or similar benefits may be counted as assets. Lump sum payments caused by delays in processing periodic payments for unemployment or welfare assistance are included as income.
How To Treat Lottery Winnings
Lottery winnings are treated differently depending on the payment structure. If the winnings are paid in one lump sum, they are considered assets. However, if the winnings are paid in periodic payments, they must be counted as income.
Income from Investment Withdrawals
The withdrawal of cash or assets from an investment received as periodic payments should be counted as income. Lump sum receipts from pension and retirement funds are counted as assets. If benefits are received through periodic payments, any remaining amounts in the account should not be counted as an asset.
Conclusion
Understanding HUD Occupancy guidelines for lump sum payments and income from investments is essential for both residents and property owners when determining annual income and eligibility for housing assistance. It’s crucial to familiarize yourself with these guidelines to ensure compliance and maximize the benefits available under the housing assistance programs.