FY 2008 Income Limits Documentation System

FY 2008 Extremely Low-Income (30%) Income Limits Calculation

The Quality Housing and Work Responsibility Act of 1998 established a new income limit standard based on 30 percent of median family income, which was to be adjusted for family size and for areas of unusually high or low family income. A statutory change was made in 1999 to clarify that these income limits should be tied to the Section 8 very low-income limits. The 30 percent income limits, therefore, are calculated as 30/50ths (60 percent) of the Section 8 very low-income limits. They are then compared to Supplemental Security Income (SSI) benefits. Since SSI benefits provide the minimum entitlement income for elderly and disabled households, the one-person 30 percent income limits are increased if they would otherwise be less than the minimum SSI level.

In accord with the Very Low-Income Limits (based on 50% of MFI), the Extremely Low-Income limits are subject to a Hold Harmless policy.

  1. The first step in establishing the Extremely Low Income Limit is establishing the preliminary 4-person income limit. This is accomplished by multiplying the 4-Person Very Low-Income limit by 0.6 (30%/50%). The calculations are as follows:

    Area 4-Person
    Very Low-Income Limit
    Preliminary 4-Person
    Extremely Low-Income Limit
    Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area $34,950 $20,950

  2. The 1-Person Income Limit is compared to the Annual Maximum Potential SSI Benefits.

    Area Preliminary 1-Person
    Extremely Low-Income Limit
    70% of 4-Person Limit
    SSI Benefit1 Adjustment
    Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area $20,950 * .7
    $7,644 Is $7,644 > $14,650?

    1The 2008 SSI Data is taken from www.socialsecurity.gov. The exact page can be accessed through this link.

  3. Next, a preliminary Extremely Low-Income limit is calculated for each person-size level from the preliminary 4 person limit. Typically, if an area is subject to the Hold Harmless provisions at the Very Low-Income (50%) level, this will carry over to the Extremely Low-Income (30%) level. However, to ensure that there are no discrepencies due to rounding, following the calculation of each person sized income limit, a comparison is made to the FY 2007 value to determine if a "hold harmless" policy is to be invoked for these Extremely Low-Income Limits.

    Income Limit 1-person 2-person 3-person 4-person 5-person 6-person 7-person 8-person
    Preliminary FY 2008 $14,650 $16,750 $18,850 $20,950 $22,650 $24,300 $26,000 $27,650
    Final FY2007 for Hold Harmless $14,700 $16,800 $18,850 $20,950 $22,650 $24,350 $26,000 $27,700
    Hold Harmless Invoked Yes Yes For VLIL For VLIL For VLIL Yes For VLIL Yes
    FINAL FY2008 Extremely Low-Income Limits $14,700 $16,800 $18,850 $20,950 $22,650 $24,350 $26,000 $27,700

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