NORTH DAKOTA DEPARTMENT OF HUMAN SERVICES
BISMARCK, NORTH DAKOTA
April 19, 2011

IM 5120

TO:		County Social Service Directors
Economic Assistance Policy Regional Representatives
Economic Assistance Policy Quality Control Reviewers

FROM:	Tove Mandigo, Director, Economic Assistance Policy

SUBJECT:	HUD and FSA Utility Subsidies

PROGRAMS:	SNAP 

EFFECTIVE:	May 1, 2011

RETENTION: 	Until Manualized

SECTIONS 
AFFECTED:	430-05-55-40 – Shelter Costs

This section is being changed to clarify the policy and ensure uniform application of it statewide.
HUD and FSA utility subsidies are excluded from income for SNAP.  Additionally, when a household receives a utility subsidy, the household is not entitled to the appropriate mandatory utility standard unless their actual utility costs exceed the utility subsidy.  
Utility subsidies are defined as a deduction for the estimated value of utilities and charges for other housing services payable directly by the family.  In most cases, the utility allowance involves no direct payment to the household.  The payment is issued to the landlord and is used to reduce the household’s shelter costs.  
•	If the utility allowance exceeds the rent, the excess is paid in the form of a utility reimbursement or rebate to the household.  The household’s actual utility costs must exceed the utility reimbursement or rebate in order to receive the appropriate mandatory utility standard.  
•	If the utility allowance does not exceed the rent, no money is returned to the household.  The household is entitled to a rental expense for their out-of-pocket costs and the appropriate mandatory utility standard based on the utility expenses incurred.
Following are some examples:  (Household’s are not in receipt of LIHEAP):
1.	Monthly rent is $50.  The household is responsible for heating costs and the HUD utility allowance is $60.  Because the utility allowance exceeds the rent, the excess of $10 is paid in the form of a utility subsidy to the household.  Allow no rent in this case.  The household’s actual utility bill must exceed the utility subsidy of $10 before the household is entitled to the HL SU.  
2.	Monthly rent is $65.  The household is responsible for electricity and telephone costs (not incurring heating or cooling costs) and the HUD utility allowance is $75.  The excess utility allowance is paid to the household in the form of a utility subsidy.  Allow no rent and the household’s actual utility bill must exceed the utility subsidy of ($10) before the household is entitled to the LU SA.  
The household’s actual electricity bill is $26 and actual telephone bill is $42.50.  The maximum allowed for telephone is the $38 telephone standard.  Since the actual utility bills exceed the utility subsidy, the household is entitled to the LU SA.
3.	Monthly rent is $123.  The household is responsible for heating costs and the HUD utility allowance is $160.  The utility allowance exceeds the rent and the excess of $37 is paid to the household in the form of a utility subsidy.  The household is in receipt of LIHEAP.  Allow no rent.  The household is entitled to the HL SU based on receipt of LIHEAP.
4.	Monthly rent is $437.  The household is responsible for heating costs and the HUD utility allowance is $42.  Since the utility allowance does not exceed the rent, the allowance is used to offset the household’s rent expense resulting in an out-of-pocket rent expense of $395.00.  The $395 is allowed as rent expense.  If the household incurs an out-of-pocket cost for heating/cooling, the household is entitled to the HL SU.    
The policy above will replace what is currently in the manual:
If a household receives a HUD or FSA utility subsidy, the actual current utility bills must exceed the utility subsidy before the household is entitled to the appropriate standard.

Examples:
1.	A household is responsible for heating costs and the monthly HUD utility payment is $150.  The household’s actual utility bills are:
Heat	$100	
Electricity	$ 75	
Water/Sewer/Garbage	$ 35	
Telephone Standard	$ 38	
	$248	

As the actual utility bills exceed the HUD utility payment the household is entitled to the standard utility allowance (HL SU).

Actual Utility Bills	$248	
HUD Utility Payment	$150	
Allowable Expense	$  98	

If the utility expenses do not exceed the HUD utility payment the household is entitled to no mandatory utility standard.
2.	A household that is not incurring heating/cooling costs and is not eligible for LIHEAP receives a HUD utility payment of $15.  The household’s actual bills are:
Electricity	$ 40	
Telephone Standard	$ 38	
	$ 78	

Actual Utility Bills	$ 78	
HUD Utility Payment	$ 15	
Allowable Expense	$ 63	

As the actual utility bills exceed the HUD utility payment, the household is entitled to the limited utility allowance (LU SA)
If the HUD payment exceeds the actual utility bills, the household is entitled to no utility standard.
Exception:
If a household is planning to apply, has applied for, or is in receipt of LIHEAP, the actual bills do not need to be verified or exceed the payment.