Section 8 counts most regular income including wages, Social Security, SSI, SSDI, pensions, child support received, and regular cash contributions. It excludes one-time payments like tax refunds, insurance settlements, and lump-sum inheritances. Allowable deductions for dependents, elderly/disabled status, medical expenses, and childcare can significantly reduce your counted income and lower your rent.
Why Income Matters for Section 8
Your income determines two things on Section 8: whether you qualify for the program, and how much rent you pay. PHAs calculate your Total Tenant Payment (TTP) — usually 30% of your adjusted monthly income — which becomes your share of the rent. Everything above that, up to the payment standard, is covered by the voucher.
Getting your income calculation right matters. Overreported income means you pay more rent than you should. Underreported income can get your voucher terminated.
Income That Counts (Included Income)
Employment income. Wages, salaries, overtime, tips, bonuses, and commissions. If you're self-employed, it's your net income after business expenses.
Social Security benefits. Retirement benefits (SSA), Supplemental Security Income (SSI), and Social Security Disability Insurance (SSDI) all count.
Pensions and annuities. Any regular payments from retirement accounts, VA pensions, or annuities.
Unemployment and workers' comp. Unemployment insurance payments and workers' compensation benefits.
Child support and alimony received. Regular payments you receive (not what you pay out).
Regular cash contributions. If someone regularly gives you money — a parent sending $200/month, for example — that counts as income.
Welfare/TANF cash assistance. Cash payments from public assistance programs.
Military pay. Base pay, BAH, and other regular military compensation.
Asset income. Interest, dividends, and other income from assets. If your assets exceed $5,000, the PHA uses the higher of actual income or imputed income (asset value × passbook savings rate).
Income That Doesn't Count (Excluded Income)
SNAP benefits (food stamps). Never counted as income.
Tax refunds and EITC. One-time tax credits and refunds are excluded.
Insurance settlements. Lump-sum payments from insurance claims.
One-time gifts or inheritances. A one-time gift from family or an inheritance isn't counted, though any ongoing income from invested inheritance would be.
Student financial aid. Scholarships, grants, and student loans used for tuition and school expenses.
Foster care payments. Payments received for foster children living in your home.
Adoption assistance. Recurring adoption assistance payments.
Amounts paid by a state agency to a third party on your behalf. If TANF pays your electric bill directly, that's not counted as your income.
Income of live-in aides. If you have a live-in aide approved by your PHA, their income doesn't count.
Earned income of full-time students. For household members who are full-time students (not head of household or spouse), only $480/year of earned income is counted.
Deductions That Lower Your Rent
After calculating your gross income, your PHA subtracts allowable deductions to get your adjusted income. These deductions directly reduce your rent portion.
$480 dependent deduction. For each household member who is a dependent (under 18, full-time student, or disabled).
$400 elderly/disabled deduction. If the head of household or spouse is 62+ or disabled.
Medical expense deduction. For elderly/disabled families only: unreimbursed medical expenses exceeding 3% of gross income.
Childcare deduction. Reasonable childcare costs for children under 13, to the extent they enable a household member to work, look for work, or go to school.
Disability assistance expense deduction. Costs for attendant care or auxiliary equipment that enable a disabled family member to work.
What About Income Changes?
You're required to report income changes to your PHA. Most PHAs require you to report increases within 30 days. Decreases can usually be reported anytime (and you'd want to, since your rent goes down).
At your annual recertification, the PHA recalculates everything from scratch. But interim changes can trigger a rent adjustment sooner.
If you start a new job while on Section 8, some PHAs offer an earned income disregard (EID) that excludes some or all of the new income for up to two years. Ask your PHA about this — it's a significant benefit many people don't know about.
How Section 8 Rent Is Calculated — the full formula from income to your monthly payment.
How Recertification Works — what documents you need and how to prepare.