Name of Housing Cooperative

Policy ManualHOUSING CHARGE ASSISTANCE – 1

Housing charge assistance

For coops funded under the CMHC Section 95 (56.1) program.

Purpose of the policy

To set out members’ rights and responsibilities for receiving housing charge assistance, and

To establish a framework for:

managing and allocating the subsidy pool and subsidy surplus fund in a fair and consistent way in compliance with the CMHC operating agreement

monitoring and assessing the impact of any policy application on all member households and on the economic viability of the coop, and

planning for changes in subsidy and housing charges in response to household changes.

Policy

The process for members and the coop

  1. The coop will verify household income and assess housing charges (income testing) [once per year][and when needed as households report mid-year changes in income][or make new applications for assistance].
  1. Households applying for assistance must complete the coop’s [housing charge assistance] application form and provide the required proof of household income.
  1. Households that do not submit an application form will be assessed the maximum housing charge for the unit.
  1. The coop may ask for further proof of income as required.
  1. [Management staff] will:

■verify that applicants qualify for assistance

■calculate the amount required for each applicant

■notify the applicant of the assessed housing charge, and

■administer the subsidy waiting list.

  1. After the annual income testing, the coop will give [60] days’ notice of the assessed housing charge.
  1. The coop may stop providing housing charge assistance to a household for any or all of the following reasons:

■an increase in income disqualifies the household

■failure to report increases in household income at the annual income testing [and mid-year according to Point #15]

■wilful falsification of the housing charge assistance application form or proof of income, and

■failure to abide by the housing charge assistance policy.

  1. Any member denied assistance or disputing the amount of assistance granted may appeal the decision to the [board]. The decision of the board is final.

Planning and managing housing charge assistance

  1. The coop will use the annual income testing and an estimate of members’ changing needs and demographics to develop annual and longer-term plans for:

■use of housing charge assistance

■ability to fill vacant units with members requiring assistance, and

■possible ways to create more funds for the subsidy pool.

  1. The coop will monitor the subsidy status reports monthly. The [finance committee] will make recommendations to the board about the amount of funds available in the subsidy pool and subsidy surplus fund to be considered sufficient.
  1. If there is not sufficient subsidy available, the coop will consider changes to the housing charge assistance policy to limit use of the subsidy and/or to create more funds for the subsidy pool. Any changes to assessed housing charges will take effect at the regular annual time.

Assessing housing charges

  1. The coop will use [25%] of gross annual household income to calculate assessed housing charges. If there is not sufficient subsidy, this percentage may be changed with the approval of the [general meeting].
  1. The assessed housing charges [will be] adjusted for utilities (refer to Schedule B of the CMHC operating agreement).
  1. Member households receiving social assistance or family benefits shall pay the shelter component of the assistance or family benefit with adjustments for utilities (refer to Schedule B of the CMHC operating agreement).

[Mid-year applications and changes in income]

  1. Members must advise the coop of any change in source of income or any increase in gross household income of more than [an amount specified by the coop] within [30] days of the increase.
  1. Members have the choice of advising the coop of any decrease in gross household income of more than [an amount specified by the coop] so that their housing charge may be decreased, provided that there are sufficient funds in the subsidy pool.
  1. The coop will review the amount of change in income referred to in [Point #15 and Point #16] every [two] years.
  1. The coop will provide notice of any change in housing charge resulting from a mid-year change in income.

For an increase in housing charge: [60] days’ notice, the time being calculated from the last day of the month in which the income increase occurred. For example, if a household’s increase in income was in mid-September, the housing charge increase would take effect on December 1.

For a decrease in housing charge: the decrease will take place on the [first day of the month after the change is reported].

  1. When households apply for assistance mid-year, the coop will allocate assistance:

■[only if sufficient funds are available in the subsidy pool or subsidy surplus fund], and

■[on a first-come, first-served basis].

Subsidy waiting list

  1. When there are not sufficient funds in the subsidy pool and households paying full housing charge apply for assistance, the coop will establish a subsidy waiting list of members who are eligible for assistance.
  1. [Households on the subsidy waiting list will receive assistance when it comes available. Assistance will be given in the following order of priority:

■[households that comply with the over- and under-housing policy], and

■[on a first-come, first-served basis]].

Note: This policy has to comply with the coop’s operating agreement with CMHC, including Schedule B.

Policy approved by general meeting:

Replaces policy dated:

Procedures needed to carry out this policy

  1. System for collecting, using, filing, sharing and protecting personal information in compliance with PIPA and PIP policies.
  1. Forms and documentation required to comply with PIPA.
  1. Required proof of income (see CMHC Income Definition Handbook).
  1. Co-op’s income eligibility guidelines (see CMHC operating agreement, including Schedule B).
  1. Schedule for annual income testing and housing charge assessment notices.
  1. Grievance process for members to follow when they think their assessed housing charge has been miscalculated.
  1. The amounts of mid-year increase and decrease in income specified by the board (Points #15 and 16).
  1. Information sheet on eligibility requirements for housing charge assistance.
  1. Utility allowances supplied annually by CMHC.
  1. Method to annualize income before decreasing or increasing housing charges.
  1. Other relevant policies such as the over- and under-housing policy.
  1. Method of communication with membership committee, board and [management staff].
  1. Subsidy status reporting format, including overall monthly and cumulative use of the subsidy pool and status of the subsidy surplus fund.
  1. Review any policy changes with [management staff] [housing charge officer] prior to approval.

Options

Options: Point #1

The sample policy provides for annual income testing, and when needed, as households report mid-year changes in income or make new applications for assistance.

If there are not sufficient funds in the subsidy pool, you may choose to:

not make any adjustments or process new applications mid-year. Change Point #1 to “The coop will verify household income and assess housing charges (income testing) once per year”

only allow mid-year new applications. Change Point #1 to “The coop will verify household income and assess housing charges (income testing) once per year, and when needed, as households make new applications for assistance”

only allow mid-year adjustments. Change Point #1 to “The coop will verify household income and assess housing charges (income testing) once per year, and when needed, as households report mid-year changes in income”, and

only allow mid-year adjustments when households report increases in income. Change Point #1 to “The coop will verify household income and assess housing charges (income testing) once per year, and when needed, as households report mid-year increases in income”.

Note: Your coop must income test and assess housing charges once per year. The CMHC operating agreement does not require you to do this more frequently.

CMHC does not permit “backwards averaging” and requires annualizing income properly before calculating gross monthly income. Doing monthly housing charge assessments is not recommended. It is a lot of work for the coop, and in most cases there can be a simpler way of doing it.

Option: Point #2

Change “housing charge assistance” application form to the name of your coop’s application form.

Option: Point #5

Change “Management staff” to “Assessment committee”, “Housing charge officer” or other designated position.

Option: Point #6

Change “60” to another number of days. This is a standard notice period but may be subject to change at mortgage rollover if there is a delay in receiving subsidy confirmation from CMHC.

Option: Point #7

If your coop:

limits the income testing to once per year in Point #1, and/or

does not require members to report any mid-year increases in income in Point #15,

delete “and mid-year according to Point #15” from the second bullet.

Option: Point #8

Change appeal to the “board” to appeal to the “finance committee and then to the board”. Do not delete the last sentence.

Options: Point #11

There are a number of strategies for limiting the use of subsidy if your coop does not have enough.

They are found in:

Point # 1 – limit income testing to once a year, except for mid-year increases in income

Point # 5 – make sure that income verification and housing charge assessment is conducted properly

Point #12 – increase percentage of income

Point #13 – remove adjustment for utilities

keep Point # 15

delete Point #16 (and adjust Point #17)

Point #19 – only process new applications for assistance at the annual income testing

Point #21 – maintain it as is so that households on the waiting list wait until assistance comes available.

other policy changes or strategies listed under “Other options” on page 11.

Note: Before deciding on a policy change or option, it is vital that your coop assess the impact on the households receiving assistance in terms of both the dollar and percentage increase in assessed housing charges (without identifying households), and subsidy pool and subsidy surplus fund.

Options: Point #12

Change “25%” to a higher percentage of income for the purpose of calculating the assessed housing charges if there is not sufficient subsidy. The percentage must not be lower than the graduated occupancy charge table in Schedule B of the CMHC operating agreement.

Change approval of the “general meeting” to approval of the “board”.

Note: Even if your Rules give the authority to the board to approve and change policies, your coop may still want to keep general meeting approval for a change in the percentage. This has such a big impact on members that it may not be a decision to leave to the board (refer to Rules 17.2 and 17.3).

Option: Point #13

If your coop does not have sufficient subsidy in the subsidy pool, consider changing “will be” to “will not be” so this point reads: “The assessed housing charges will not be adjusted for utilities”.

Option: Points #15-19

Mid-year applications and changes in income

Delete entire section (Points #15 to #19) if you decided in Point #1 to only income test and assess housing charges once per year. Only do this if you don’t have sufficient subsidy.

Options: Point #15

Change “an amount specified by the coop” to “$ #” or “# % of income”.

Change “30” to another number of days.

Option: Point #16

Change “an amount specified by the coop” to “$ #” or “# % of income”.

Options: Point #17

Change “Point #15 and Point #16” to the appropriate numbers if needed.

Change “two” to any number of years.

Options: Point #18

In the second paragraph, change “60” to any number of days.

In the third paragraph, change “first day of the month after the change is reported” to another time.

Option: Point #19

Delete or add any bullet. It is recommended to use criteria that are not subjective judgements.

Options: Point #21

Priority on the wait list – add other points but it is recommended to use criteria that are not subjective judgements.

If your coop wants to provide housing charge assistance to all households at the annual income testing, delete Point #21 and replace with:

“Households on the waiting list will receive assistance at the annual income testing. The coop will re-open the subsidy pool annually at the next income testing. [Management staff] will calculate the amount of assistance required for all eligible households. If there are not sufficient funds in the subsidy pool, the coop will consider revising this policy as set out in Point #11.”

Other options

If there is not sufficient subsidy available, your co-op may consider ways to limit the use of the subsidy and/or to create more funds for the subsidy pool. Before deciding on a policy change or strategy, it is vital that your coop assess the impact on the:

households receiving assistance in terms of both the dollar and percentage increase in assessed housing charges (without identifying households), and

subsidy pool and surplus subsidy fund.

Additions to the “Assessing housing charges” section of this policy

Option: Minimum housing charge

#.The coop will set a minimum housing charge of [#]. If the application of a minimum housing charge presents a hardship for any household, the board may, at its discretion, make adjustments. Any exemption approved by the board must be reported to the members.

Options:

[# %] of regular housing charge for that unit or

[$ #] for a one-bedroom unit

[$ #] for a two-bedroom unit

and so on.

Note: It is recommended that coops do not set their minimum housing charge equal to the shelter component for social assistance. This creates an inequity for some households, depending on size of unit and utility adjustments.

Option: Head of household

#.For income testing purposes only, the household head will be defined as the household member with the highest income.

Option: Over-housed households

#.Over-housed households eligible for subsidy will only receive the subsidy to which they would be entitled if they were not over-housed. This will only apply if the over-housed household has not complied with the over- and under-housing policy.

Additional strategies for dealing with subsidy shortage

Before deciding on any strategy, your coop will want to balance the financial viability of the coop with the impact of new strategies on all members, especially lower income households.

Your board, [management staff], and the finance and membership committees should work closely together to develop the best strategies for dealing with subsidy shortage in your coop.

Targeting market households

The co-op will target market households when filling vacancies.

Internal subsidy

The coop will investigate creating an internal subsidy and submit a proposal for approval to the general meeting.

Note: You can find a guide by CHF Canada, Members helping members – how internal subsidy works, at