Effective Dates: 10/31/2023 - Present Previous | Next

TN 113 (10-23)

SI 00835.370 Rent-Free Shelter

A. When to use rent-free shelter instructions

Use this section to develop the issue of rent-free shelter in both initial claims and post-eligibility situations if:

  • •

    sequential development of living arrangements (LA) shows that the value of one-third reduction (VTR) does not apply; and

  • •

    there is an allegation that no one in the household has any ownership interest in, or rental liability for, the place of residence.

B. Definitions of rent-free shelter and rent-like payments

1. Rent-free shelter

Shelter is rent- free when no household member has any ownership interest in, or rental liability for, the residence.

2. Rent-like payments

Payments are rent-like if made to, or on behalf of, a shelter provider when there is no rental liability. Rent-like payments may reduce the amount of in-kind support maintenance (ISM) in the form of rent-free shelter. Rent-like payments consist only of the following:

  • •

    cash to the shelter provider; or

  • •

    vendor payments for the owner's mortgage, real estate property taxes, or rent (in sublease situations) on the residence where the claimant lives.

C. Policy for rent-free shelter

Rent-free shelter is a form of ISM.

D. Process for how rent-like payments offset the current market rental value (CMRV)

The following chart explains the month(s) in which a rent-like payment offsets the CMRV and thus reduces the actual value (AV) of ISM.

When a household's rent-like payment is...

And, the CMRV is...

Then the payment offsets the CMRV...

less than or equal to the monthly CMRV

not already being offset

in the month of payment.

more than the monthly CMRV

not already being offset
  • •

    beginning with the month of payment; and

  • •

    extending over the number of months arrived at by dividing the payment by the CMRV.

any amount

already being offset
  • •

    beginning with the first month there is not total offset of the CMRV from a prior payment; and

  • •

    extending over the number of months arrived at by dividing the payment by the CMRV.

E. Procedure for developing rent-free shelter

This procedure applies in both initial claim and post-eligibility situations.

1. How to explain rent-free shelter to the claimant

Explain that

  • •

    the value of rent-free shelter is income;

  • •

    we will charge the presumed maximum value (PMV) unless they rebut our decision; and

  • •

    if they wish to rebut, they must produce evidence of a value lower than the PMV.

    For information on the rebuttal procedure, see SI 00835.320.

2. Claimant’s rebuttal decision

If the claimant does not rebut, document that fact, and

  • •

    if the claimant lives alone and alleges that they make no rent-like payments, charge the presumed maximum value (PMV) without any further development; or  

  • •

    if the claimant does not live alone or if the claimant says that they, or another household member, makes rent-like payments, consider the need for further development of the AV of the shelter before charging the PMV.

For further development, see rent-like payments below.

3. Rent-like payments

  1. 1. 

    Record on a Report of Contact page the claimant’s response concerning whether anyone in the household makes a rent-like payment and the payment date(s)

  2. 2. 

    If the claimant alleges no rent-like payment, close this issue and see CMRV development, SI 00835.370E.4. in this section.

  3. 3. 

    If the claimant alleges rent-like payments, obtain a signed statement from the payer and from the shelter provider to document:

    • •

      the amount and payment dates; and

    • •

      what the payments are for.

NOTE: In lieu of signed statements, the claims specialist (CS) can use a Report of Contact page to document the responses of the payer and the shelter provider.

4. CMRV development

  1. a. 

    Obtain an estimate of the CMRV from the shelter provider (signed statement or a Report of Contact page). Accept the estimate the shelter provider gives you, including an estimate of $0.00. Document the file and see the procedure for determining AV of rent-free shelter in SI 00835.370F in this section.

  2. b. 

    Contact another knowledgeable source (e.g., real estate firm, rental management agency, etc.) dealing with similar neighborhoods to obtain a CMRV for similar shelter only if the provider is unable or unwilling to provide an estimate. An estimate of $0.00 does not require contact with a knowledgeable source.

F. Procedure for determining actual value (AV) of rent-free shelter

Select the applicable method provided in this section to determine the AV of a claimant's or eligible couple's portion of rent-free shelter. Document the record to reflect your computations.

1. No rent-like payment or payment less than CMRV

When no household member makes a rent-like payment or a household member makes a payment, which is less than the CMRV, use the following method (not necessarily as a worksheet).

Step

Action

Entry

Comment

1

Enter monthly CMRV of rent-free shelter

$        

Convert to a monthly amount if necessary.

2

Subtract rent-like payment

       

 

3

Enter remainder

$        

AV of rent-free shelter to the household.

4

Divide by number of household members

÷        

 

5

Enter result

$        

AV to each household member. For a claimant, go to step 8. For an eligible couple, go to step 6.

6

Multiply by 2

×         2

 

7

Enter result

$        

AV of rent-free shelter to couple.

8

Enter lesser of AV or applicable PMV (individual PMV or couple PMV)

$        

Amount to charge for ISM in the form of rent-free shelter.

2. Rent-like payment exceeds CMRV

When any household member makes a rent-like payment, which exceeds the CMRV, use the following method.

Step

Action

Entry

Comment

1

Enter rent-like payment amount

$        

 

2

Enter monthly CMRV of rent-free shelter

$        

Convert to a monthly amount if necessary.

3

Divide amount in step 1 by amount in step 2 and enter result

÷        

Number of months in which no one in household receives ISM in the form of rent-free shelter. If there is a decimal remainder, go to steps 4 through 9.

4

Multiply any step 3 decimal remainder by CMRV and enter

$        

For example, if the decimal is .5 (1/2 mo.) and the CMRV is $200, the dollar amount is $100.

5

Subtract amount in step 4 from CMRV (step 2) and enter remainder

$        

AV of rent-free shelter to the household.

6

Divide by number of household members

÷        

 

7

Enter result

$        

AV of rent-free shelter to each household member. For a claimant, go to step 10. For an eligible couple, go to step 8.

8

Multiply by 2

×         2

 

9

Enter result

$        

AV of rent-free shelter to couple.

10

Enter lesser of AV or applicable PMV (individual PMV or couple PMV)

$        

Amount to charge for ISM in the form of rent-free shelter.

G. Related references

  • •

    SI 00835.470 ISM and Household Conversions

  • •

    SI 00835.005 Sequential Development of Living Arrangement and In-Kind Support and Maintenance - Flowchart

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0500835370
SI 00835.370 - Rent-Free Shelter - 10/31/2023
Batch run: 10/31/2023
Rev:10/31/2023