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Financial incentives to make work pay

To encourage residents to take jobs and remain employed, Jobs-Plus includes new rent policies that limit how much residents’ rent will increase when their incomes rise due to earnings. Under traditional rent policies, residents must pay 30 percent of their household’s countable income in rent, up to a maximum amount tied to the cost of operating public housing. Under Jobs-Plus, working residents pay less of their overall income in rent. Depending on how many people are induced by Jobs-Plus to work, it is possible for the housing authority to lose revenues as a result of the program. Recognizing that few housing authorities would be willing to take this risk, HUD agreed to hold them harmless for any extra costs that resulted from approved new Jobs-Plus rent policies.12 Current Jobs-Plus incentive packages center primarily on two main strategies, with different sites taking different approaches: (1) flat rents, which specify a fixed rental payment regardless of earnings; and (2) reductions in the percentage of income to be paid in rent.13 Residents must participate in other Jobs-Plus activities to qualify for these rent benefits.14 Another important feature of the Jobs-Plus work incentives approach is a concerted effort by sites to educate their residents about the other financial programs for low-income working families and individuals that exist under current law (such as earnings disregards available under TANF, assistance with the cost of child care and Medicaid that welfare recipients can continue to receive after leaving welfare, child care disregards under public housing rent rules, and the Earned Income Tax Credit or EITC). Each site has developed a strategy to help residents take advantage of these incentives in addition to those available through Jobs-Plus.