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2023 COLA is 8.7% – Largest increase in 40 years
Cost of Living Adjustment for 2023 – 8.7%
Thursday, October 13, 2022 – Today the Social Security Administration announced that the Cost of Living Adjustment (COLA) for 2023, which apply to Social Security (SS), Supplemental Security Income (SSI) and Dual Entitlement (DE) benefits, are going to increase by 8.7%. All recipients will see the increase impact their benefits deposits beginning January 2023.
As this is the largest increase in almost 40 years, a new situation will present itself. In households where two (2) or more of the adults are receiving SS, SSI, or DE benefits, their income could increase by $200 or more a month. Due to the size of the increase in monthly income, the HUD Handbook 4350.3 requires an Interim Recertification (IR) to be completed. This applies to households that do not have an Annual Recertification (AR) in January or February 2023.
Properties will have two choices on how to handle IRs for households who have a $200 a month or more increase.
- Option 1: Proactively run the calculations and contact tenants who will have an increase of $200 or more a month and complete an IR effective 2/1/2023.
- Option 2: Allow tenants to self-report the increase of $200 a month or more. If you chose option 2, please keep in mind that if the tenant(s) fails to report the increase, there is a high likelihood that a repayment agreement will be required.
For households who have an AR due in January or February 2023, the property will have to act to account for the COLA increase. Note that the Enterprise Income Verification (EIV) system’s Income Reports for January and February 2023 will most likely not be updated in time to include the COLA increase. According to the HUD Handbook 4350.3, properties have two options when it comes to adding the increase.
- Option 1: Calculate the COLA and manually add the amounts shown in EIV. Do not round to the nearest dollar, include the full amount of the increase. Contract Administrators (CAs) require the full amount including the cents.
- Option 2: Use the amounts shown in EIV, without adding the COLA. These income calculations will be used to determine household’s subsidy for all of 2023. It is important to remember for option 2, that rents in 2024 will increase by at least 8.7%, regardless of the 2024 COLA.
Please remember that you cannot accept the notice that the Social Security Administration releases about the COLA as documentation of income.
HUD Issues Notice 5 – Year Section 202 PRAC Renewals
PRAC Contracts Extending from 1 to 5 – Year Terms
HUD’s Office of Multifamily Housing Programs published a Notice that they will be increasing the standard Section 202 Project Rental Assistance Contracts (PRAC) renewal term to five-years from the one-year terms authorized in the past. This change will enable a more efficient annual funding process and reduce paperwork burdens for both owners and HUD.
All owners and management agents with a PRAC contract – both Section 202 and Section 811 — should review the Notice for new information on processing of mid-year rent adjustments, shifting future expiration dates to the end of the month, and limited waivers for annual budget submission requirements. The Notice also includes an updated version of the PRAC renewal amendment, which will be used for renewal of all PRACs expiring January 1, 2023 or later.
Execution of five-year Section 202 contracts will be phased in over a three-year period, with a portion of the 202 PRAC portfolio switching to a five-year contract in 2023, 2024, and 2025. Section 811 PRACs will remain on annual contracts. The year in which a five-year contract will first be issued to a property is determined by the last digit of the Capital Advance Project Number. (Please see the notice for further details.) Conversion of Section 202 PRACs to five-year renewal terms is the first step in a broader plan for streamlining PRAC renewal and rent adjustment processes.
The notice clarifies HUD’s expectations on the annual timing for owners seeking adjustments to PRAC contract rents and when exceptions may be made. It also explains allowable changes to contract effective dates, which are limited to minor adjustments in duration that align expiration date with the end of the month, and discusses limited waivers for annual budget submission requirements.
About Paulhus & Associates:
Paulhus & Associates is a national leader in Housing and Urban Development (HUD) services. We provide consulting, compliance, and training services to over 300 properties nationwide, including project-based multifamily properties, namely Section 8 properties, 202/8 properties, 202 PACs, PRAC 811, and PRAC 202s. Through our work, we ensure our clients’ success in complying with HUD requirements and guidelines.
Anthony Howells Named to NSBA Leadership Council
Annville, PA 17003 – Anthony Howells, CEO of Paulhus & Associates, was recently named to the National Small Business Association (NSBA) Leadership Council. NSBA is the nation’s oldest small-business advocacy organization, and operates on a staunchly nonpartisan basis. Howells, a recognized leader in the small-business community, joins the NSBA Leadership Council alongside other small-business advocates from across the country as they work to promote the interests of small business to policymakers in Washington, D.C.
“As a small-business owner, I see daily the importance of being involved and active when it comes to laws and regulation,” stated Mr. Howells. “Joining NSBA’s Leadership Council will enable me to take our collective small-business message to the people that need to hear it most: Congress.”
Mr. Howells has been working in the startup and small business space for over 15 years. Previously focused on the green tech field, Mr. Howells has moved into the Affordable Housing space. Acquiring Paulhus & Associates, a nationally recognized leader in subsidized public housing, he found taking a more proactive approach to advocating for small business needs is paramount to his role.
Mr. Howells joined the NSBA Leadership Council as part of his efforts to tackle the many critical issues facing small business, including tax reform, regulatory restraint, health care costs and how access to capital will impact small business. The NSBA Leadership Council is focused on providing valuable networking between small-business advocates from across the country while ensuring small business a seat at the table as Congress and regulators take up key small-business proposals.
“I am proud to have Anthony Howells as part of our Leadership Council,” stated NSBA President and CEO Todd McCracken. “He came to us highly recommended and I look forward our coordinated efforts for years to come.”
For more on the NSBA Leadership Council, please visit www.nsba.biz
About Paulhus & Associates:
Paulhus & Associates is a national leader in Housing and Urban Development (HUD) services. We provide consulting, compliance, and training services to over 300 properties nationwide, including project-based multifamily properties, namely Section 8 properties, 202/8 properties, 202 PACs, PRAC 811, and PRAC 202s. Through our work, we ensure our clients’ success in complying with HUD requirements and guidelines.