Office of the Assistant Secretary for Public and Indian Housing; New Procedures for Verifying the Social Security and Supplemental Security Income of Applicants and Participants: HUD's Rental Assistance Programs Administered by Public Housing Agencies and Indian Housing Authorities

SUMMARY: This notice informs public housing agencies and Indian housing

authorities, collectively referenced as housing agencies (HAs), of: (1)

new procedures to verify social security (SS) and supplemental security

income (SSI) information for rental assistance applicants and

participants, (2) HUD policy changes concerning SS and SSI

verification, (3) implementation plans, and (4) actions that HAs may

take now to help promote effective implementation of the new

procedures. HUD published a related notice of matching program at 60 FR

21548; May 2, 1995.

EFFECTIVE DATES: HUD plans to implement the SS and SSI computer

matching gradually over a period of about 1 year on a State-by-State

basis. Implementation started in June 1996 in the States of Alaska,

Idaho, Oregon and Washington. HUD also plans to provide HAs with about

1 month's notice of plans to implement the SS and SSI computer matching

in the selected State(s)/HAs. Current income verification policies and

procedures remain in effect until each HA implements the new

procedures.

ADDRESSES: Interested persons are invited to submit comments regarding

this notice to the Rules Docket Clerk, Office of General Counsel, Room

10276, Department of Housing and Urban Development, 451 Seventh Street,

SW., Washington, DC 20410-0500. Communications should refer to the

above docket number and title. Facsimile (FAX) comments are not

acceptable. A copy of each communication submitted will be available

for public inspection and copying between 7:30 a.m. and 5:30 p.m.

weekdays at the above address.

FOR FURTHER INFORMATION CONTACT: David L. Decker, Director, Computer

Matching, Office of the Public and Indian Housing Comptroller, Room

5156, Department of Housing and Urban Development, 451 Seventh Street,

SW, Washington, DC 20410, telephone number (202) 708-0099, extension

4273. (These telephone numbers are not toll-free.) A telecommunications

device for hearing- and speech-impaired persons (TTY) is available at

1-800-877-8339 (Federal Information Relay Services). (This is a toll-

free number.)

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The information collection requirements contained in this notice

have been reviewed by the Office of Management and Budget under the

Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned

approval number 2577-0083, which expires on August 31, 1997.

Background

HAs administer the Public Housing Program and the Section 8

Programs that provide rental assistance to low income families under

regulations issued by HUD's Office of the Assistant Secretary for

Public and Indian Housing. Generally, tenants pay 30 percent of their

income for rent. Under Section 8, the difference between the market

rent and the tenant's payment constitutes a rental subsidy. Because

household income is the major factor in determining eligibility for,

and the amount of, rental subsidy, HUD has required HAs to verify

applicants' incomes at the time of initial application for assistance

(certification) and annually thereafter (recertification). All types of

income must be verified including, e.g., wages, SS and SSI.

Present Procedures to Verify SS and SSI

The Social Security Administration (SSA) currently provides HAs

with information needed to verify SS and SSI when HAs request the

information. This is done using a mark-sense card system developed by

the SSA. Under this system, HAs request SS and SSI information from the

SSA by manually marking personal identifiers of tenants, i.e., the

social security number (SSN), on a card and mailing the mark-sense card

to a local SSA office for processing.

The SSA then processes the mark-sense card and sends a computer-

produced report (called a Third Party Query Report) to the HA showing

the SS and SSI benefits of the applicant or tenant. SSA has about 100

card readers nationwide that it considers obsolete and plans to phase

out. HAs presently are one of the primary users of SSA's mark-sense

card operations.

HAs generally send mark-sense cards to the SSA only for applicants

or tenants who report SS or SSI to the HA. Instead of submitting mark-

sense cards, some HAs obtain SS and SSI information from local SSA

offices where SSA staff use an automated system to query information by

SSN. HAs compare the SS and SSI information obtained from the SSA to

the tenant-reported income. HA staff include SSA documents received

from the tenant and SSA's Third Party Query report in the tenants' case

files.

HUD's development in recent years of an automated database, known

as the Multifamily Tenant Characteristics System (MTCS), facilitates

new procedures to verify tenant-reported income data. HAs provide HUD

with the tenant data, i.e., personal identifiers and income data, that

is included in the MTCS. HUD issued a final rule (60 FR 11626; March 2,

1995) requiring HAs to transfer tenant data to MTCS electronically.

HUD also issued Notice 96-20 (HA) on April 18, 1996, informing HAs

of a reduction in Section 8 administrative fees for failure to

electronically submit data for Form HUD-50058, Family Report, and Form

HUD-50058-FSS, Family Self-Sufficiency Addendum, for Section 8

participants monthly or quarterly as required.

New Procedures to Verify SS and SSI

Monthly HUD will transmit to SSA, via a secure high-speed data

line, personal identifiers for tenants scheduled to recertify 3 months

before the tenants' scheduled annual recertification date. SSA does the

computer matching of personal identifiers and provides HUD with SS and

SSI information which HUD compares to the tenant-reported SS and SSI

information shown in the MTCS. At least 2 months before the tenants'

recertification, HUD will provide HAs with SS and SSI information

needed to do annual recertifications of tenants, i.e., to determine

eligibility and the rental assistance amounts.

HUD is adopting these procedures based on comments received from

HAs that participated in a pilot project. This is a revision of what

HUD initially planned--doing the computer matching for

(re)certifications completed in the prior month, and reporting to HAs

only SS and SSI information for tenants with income disparities.

The processing and reporting timeframes cited in the prior

paragraph approximate those currently used by many HAs for annual

recertifications.

[[Page 37805]]

However, HAs will receive the information directly from HUD--not from

SSA. Initially, HUD will send computer-produced reports showing SS and

SSI amounts to HAs that are similar to the reports HAs currently

receive from SSA. HUD plans to provide for electronic transmission,

instead of paper reports, later in calendar year 1996.

The planned computer matching procedures as currently designed

provide SS and SSI information on a pre-recertification basis. The

procedures do not provide HAs with SS and SSI information on a pre-

certification basis for initial applicants for rental assistance.

Besides providing a report similar to the SSA's Third Party Query

Report, HUD will also provide a report that shows SS and SSI income

disparities, and request that the HAs resolve the disparities. This

will involve confirming data validity, evaluating the potential for

unreported or underreported income, providing the tenant due process,

and taking appropriate administrative or legal actions.

HUD will provide HAs with a ``Guide for Verifying Computer Matching

Results and Taking Enforcement Actions.'' This Guide describes the

computer matching program, includes sample computer-produced outputs,

and describes procedures for verifying computer matching results and

taking enforcement actions. The Guide also provides HAs substantial

discretion in taking enforcement actions on abuses identified. HUD will

distribute the Guide to HAs about one month before implementation. See

the ``Plans for Large-Scale Implementation of SS and SSI Computer

Matching and Income Verification'' section below.

Improved Efficiency and Effectiveness of New Procedures to Verify

SS and SSI

A pilot demonstration has shown that the new procedures for

verifying SS and SSI benefit HAs, HUD and SSA by improving the

efficiency and effectiveness of income verification. Efficiency will be

improved by using electronic data transfer and computer matching,

instead of preparing mark-sense cards manually and sending them by mail

to the SSA. Further, use of the new SS and SSI verification techniques

will aid the SSA in planning for the elimination of mark-sense card

operations and in reducing workload demands on local SSA Offices.

The effectiveness of the income verification process will be

improved by detecting unreported or underreported SS and SSI.

This will be done by comparing personal identifiers of all

household members to SSA's data. In contrast, under present procedures

HAs verify only the SS and SSI that individuals report. HA actions on

unreported or underreported income will help deter abuses in HUD

programs.

Policy Change

In implementing the new SS and SSI verification procedures, HAs

will use HUD-provided SS and SSI computer matching results, instead of

the SSA's mark-sense card and automated inquiry processing. The

completeness and accuracy of the computer matching results will depend

significantly on the quality of MTCS data that HAs provide to HUD.

Therefore, the completeness and accuracy of the MTCS data will be of

utmost importance.

HUD will discontinue its requirement for pre-verification of SS and

SSI information for new applicants. HAs will be required to request and

use tenant-provided information on SS and SSI, that the tenants certify

as correct. Because the new procedures will not provide for verifying

the SS and SSI before a new applicant's certification for rental

assistance, HAs must request that new applicants provide documents that

tenants have in their possession showing the monthly amount of SS and

SSI they receive. The documents may include recent benefit letters [the

preferred document], SSA Form 1099's, award letters, other letters from

SSA that show benefit amounts, and bank statements showing net

payments. HAs must not request that tenants obtain documents from SSA.

HUD expects that tenant-provided documents generally will provide

sufficient information to determine initial eligibility and benefit

amounts. The information will be confirmed on a post-certification

basis with computer matching.

HUD recognizes that pre-verification of SS and SSI information is

beneficial in providing correct information for use in rental

assistance determinations. However, HUD's MTCS collects data on new

applicants after a certification or recertification occurs. Therefore,

MTCS does not contain information needed for matching to SSA data on a

pre-certification basis for new applicants. MTCS retains information on

prior certifications or recertifications.

Regarding annual recertifications, HAs may rely on the HUD-provided

information as sufficient documentation to verify tenant-reported SS

and SSI income. HAs should not request other documents from tenants

concerning SS and SSI if the HA has the HUD-provided SS and SSI

information for the applicable (re)certification period.

Plans for Large-Scale Implementation of SS and SSI Computer Matching

and Income Verification

HUD plans to implement the SS and SSI computer matching gradually

over a period of about 1 year on a State-by-State basis. HUD also plans

to provide HAs with about 1-month's notice of plans to implement the SS

and SSI computer matching in the selected State(s)/HAs. In addition,

HUD will provide each HA with copies of the ``Guide for Verifying

Computer Matching Results and Taking Enforcement Actions'' at training

sessions in selected States.

Recognizing that some HAs have not always reported data to MTCS,

HUD anticipates that some HAs during the next year will need to use

present procedures to verify SS and SSI. However, HAs must only use

those procedures when absolutely necessary, i.e., when HUD-provided

information is not available because of incomplete MTCS reporting.

HUD's goal is to eliminate completely HAs' use of mark-sense cards by

September 30, 1997. Further, except for very low volume of processing

to resolve tenant disputed SS and SSI amounts, HA requests for

automated SS and SSI inquiries should also be eliminated by that date.

After HAs start receiving HUD-produced computer matching results,

HAs must discontinue the practices of submitting to the SSA mark-sense

cards or requesting SSA automated queries of SS and SSI data. HAs

should only be contacting SSA staff to request assistance in resolving

SS and SSI information that the tenant disputes.

SSA Services During the Transition to Computer Matching

When HUD, due to incomplete MTCS data, cannot provide computer-

produced SS and SSI information to HAs for recertifications, the SSA

will provide HAs with SS and SSI verification services using past

practices (i.e., mark sense cards or local SSA Office queries). SSA

also will help HAs in resolving issues where the tenant disputes the

amount of SS or SSI.

HUD Hotline

HUD will operate a telephone Hotline during the period of the

transition to answer HA questions concerning the implementation. The

Hotline number is (202) 708-0099.

Actions HAs Should Take to Help Promote Effective Implementation of

SS and SSI Computer Matching and Income Verification

HUD encourages all HAs to take the following actions to promote

effective

[[Page 37806]]

implementation of SS and SSI computer matching and income verification:

(1) submit data electronically timely as required by the final rule

published at 60 FR 11626; March 2, 1995, (2) ensure that the correct

last name, SSN, and birth date are submitted electronically to HUD for

all tenants required to provide SSNs, and (3) ensure that tenant-

reported SS and SSI information are entered in the appropriate data

fields.

Dated: July 5, 1996.

Michael B. Janis,

General Deputy Assistant Secretary for Public and Indian Housing.

[FR Doc. 96-18355 Filed 7-18-96; 8:45 am]

BILLING CODE 4210-33-P