HUD Handbook 4350.3 § 5-9

A.      There are five possible deductions that may be subtracted from annual income
                based on allowable family expenses and family characteristics. The remainder,
                after these deductions are subtracted, is called adjusted income. Adjusted
                income is generally the amount upon which rent is based. See Section 4 of this
                chapter for information about specific rent calculation methods. This section
                focuses on the calculation of annual adjusted income. Before rent is calculated,
                annual adjusted income is converted to monthly adjusted income.

        B.      Of the five possible deductions, three are available to any assisted family, and
                two are permitted only for elderly or disabled families.

                1.       The three types of deductions available to any assisted family are:

                         a.      A deduction for dependents;

                         b.      A child care deduction; and

                         c.      A disability assistance deduction.

                2.       The two types of deductions permitted only for families in which the head,
                         spouse, or co-head is elderly or disabled are:

                         a.      An elderly/disabled family deduction; and

                         b.      A deduction for unreimbursed medical expenses.

                         NOTE: A family may not designate a family member as head or co-head
                         solely to become eligible for these additional benefits. The remaining
                         member of a family listed in paragraph 5-9 B.2 who is not 62 or older or a
                         person with disabilities is not eligible for these allowances.