What the Section 8 program counts as income

Section 8 counts most money you receive as income, but not all of it. The program uses your annual gross income — before taxes — to calculate how much rent you pay. That includes wages, self-employment earnings, Social Security, unemployment benefits, child support, and regular gifts of money. However, certain types of income are legally excluded from this calculation, which means they do not raise the rent you owe.

The exclusions matter because they can lower your rent significantly. If you receive income that qualifies for an exclusion, your Section 8 payment (the amount the program pays your landlord) stays higher, and your share stays lower. Understanding which income counts and which does not can change what you actually pay each month.

Key Takeaways

  • The most common exclusions are child support received, foster care payments, and adoption assistance — these do not count toward your income at all.
  • Earned income of minors and full-time students is excluded up to a set amount, which changes yearly and varies by household size.
  • Lump-sum payments like tax refunds, insurance settlements, and retroactive benefits are usually excluded, though the rules depend on what the money is for.
  • You must report all income to your housing authority, including income you think might be excluded — the authority decides what counts.
  • Exclusions are federal rules, so they apply the same way in every state, but your local housing authority interprets and documents them.

Income that is always excluded

Certain income types are excluded under federal Section 8 rules no matter where you live. Child support received is excluded entirely — if you receive child support payments, they do not count toward your income. Foster care payments for a child living in your household are also excluded. Adoption assistance payments made by a state or local agency are excluded as well.

Income from certain educational programs is excluded: grants, scholarships, and educational assistance used for tuition, books, or fees do not count. However, if you use that money for living expenses instead, it may count. Earnings of a live-in aide — someone who lives with you and provides care — are excluded. Meals and lodging provided in kind (not cash) are also excluded, as are certain tribal income and income from certain Native American trust lands.

Earned income exclusions for students and minors

If a household member is a full-time student or a minor, part of their earned income is excluded. The amount excluded changes each year and depends on household size. For the 2024 program year, the exclusion is typically around $480 per month for each full-time student or minor, though this figure varies by housing authority and updates annually. You should ask your housing authority for the current year's exclusion amount rather than relying on a previous year's number.

To use this exclusion, the person must be genuinely employed and earning wages. The exclusion applies only to earned income (wages, salary, self-employment), not to benefits or gifts. If a household has multiple students or minors with jobs, each person's earnings can have the exclusion applied separately, up to the annual limit set by the program.

Lump-sum payments and one-time income

Lump-sum payments — money received all at once rather than regularly — are treated differently depending on what they are. Tax refunds are excluded. Insurance settlements for property damage or loss are excluded. Retroactive Social Security, SSI, or veterans benefits (back pay owed to you) are excluded. Inheritances are excluded. These do not count as income in the month you receive them.

However, if you keep a lump sum and it becomes savings or assets, it may affect your may be able to access under the program's asset limits, which are separate from income limits. Some housing authorities have asset limits (often $5,000 to $10,000 per household, though this varies), and money sitting in your account counts toward that limit. The exclusion from income does not mean the money disappears from the program's view — it just means it does not raise your monthly rent calculation.

Medical and disability-related exclusions

Medical expense reimbursements are excluded — if someone reimburses you for medical costs you paid, that reimbursement does not count as income. Disability assistance payments made by a nonprofit or government agency specifically to help with disability-related costs are excluded. Impairment-related work expenses for a person with a disability are deducted from earned income before the income is counted.

These exclusions recognize that people with disabilities or serious medical needs may receive money specifically to cover those costs, and the program does not count that money as income available for rent. If you receive payments labeled as disability assistance or medical reimbursement, report them to your housing authority and ask them to apply the exclusion.

How to report excluded income to your housing authority

You must report all income to your housing authority, including income you believe is excluded. Do not simply leave it off your paperwork — instead, list it and note that you believe it qualifies for an exclusion. Provide documentation: a letter from the child support enforcement office, foster care payment statements, scholarship award letters, or insurance settlement paperwork. The housing authority will review your claim and decide whether the exclusion applies.

When you report income during your annual recertification or when your circumstances change, bring the documents that prove the income and explain why you think it is excluded. If the housing authority disagrees, you have the right to request a hearing to challenge the decision. Keeping clear records of all income sources and the dates you received them makes this process simpler.

What happens if income is miscounted

If your housing authority counts income that should be excluded, your rent will be higher than it should be. You pay the difference out of pocket. If you discover the error, contact your housing authority in writing and provide documentation of the excluded income. Ask them to recalculate your rent going forward and, if possible, to refund the overpayment you made in previous months.

Some housing authorities will issue a refund; others will credit the overpayment toward future rent. The process and timeline vary by authority. If the authority refuses to correct the error, you can request a hearing before an impartial examiner. Bring your documentation and a clear explanation of why the income should have been excluded. The hearing officer will review the federal rules and make a binding decision.

Frequently Asked Questions

Does my child's part-time job income count toward my Section 8 rent?

If your child is a minor or a full-time student, part of their earnings are excluded — typically around $480 per month for 2024, though your housing authority will confirm the current amount. Any earnings above that exclusion do count toward household income. Ask your authority for the exact exclusion amount that applies to your household.

If I get a tax refund, does it count as income?

No. Tax refunds are excluded from Section 8 income calculations. However, if you keep the refund in a savings account, it may count toward your household's total assets, which some housing authorities limit. The refund itself does not raise your rent, but holding it could affect your overall may be able to access if your assets exceed the limit.

What if I receive money from a family member as a gift?

Regular gifts of money are counted as income. However, a one-time lump-sum gift may be treated differently depending on your housing authority's interpretation. Report the gift and ask whether it counts as income or as a one-time transfer. Bring documentation showing it was a gift, not a loan or payment for work.

Do I have to report income I think is excluded, or can I just leave it off the form?

You must report all income. List it on your recertification form and note that you believe it qualifies for an exclusion. Provide supporting documents. If you omit income from your report, the housing authority may find out later and recalculate your rent retroactively, which could result in a large bill or loss of your subsidy.

Can my housing authority change what counts as excluded income?

No. Exclusions are set by federal Section 8 rules and apply the same way everywhere. Your housing authority must follow these rules. However, the authority interprets how the rules apply to your specific situation, and you can challenge their interpretation through a hearing if you disagree.