**U.S. Department of Housing and Urban
Development**![](media/image1.wmf){width="0.5659722222222222in"
height="0.5493055555555556in"}

Public and Indian Housing

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**Special Attention of:** Notice PIH 2007-20 (HA)

Regional and Field Office Directors

Of Public Housing; Public Housing Agencies Issued: June 6, 2007

Expires: June 30, 2008

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**Subject**: **Impact of Non-Parental Child-Only Welfare Grants on
Families Participating in the Family Self-Sufficiency (FSS) Program**

**[Purpose.]{.underline}**

This Notice provides guidance pertaining to FSS families that receive
Temporary Assistance for Needy Families (TANF) grants that are made to a
dependent child or to a caretaker on the child's behalf solely on the
basis of the child's need and not on the need of the child's current
non-parental caretaker. These grants are commonly referred to as "TANF
child-only grants" or "TANF non-needy grants."

**[Background.]{.underline}**

Section 554 of the National Affordable Housing Act of 1990 added a new
Section 23 to the United States Housing Act of 1937 that created the FSS
program to promote the development of local strategies that coordinate
the use of public housing development assistance and housing assistance
under the Section 8 rental certificate and voucher programs with public
and private resources, to enable families to achieve economic
independence and self-sufficiency. The public housing agency (PHA) and
the head of each participating family execute an FSS Contract of
Participation (FSS contract) that specifies the rights and
responsibilities of both parties.

To successfully complete its FSS contract the head of the FSS family
must seek and maintain suitable employment and all family members must
be independent of welfare assistance. An FSS escrow account is
established for each FSS family. Credits to the escrow account are
calculated based on increases in the earned income of the family during
the term of the family's FSS contract. If the family completes its FSS
contract, the family receives the funds in the escrow account.

The FSS regulations at 24 CFR Part 984.103 define welfare assistance for
the FSS program as "income assistance from Federal or State welfare
programs," that "includes

only cash maintenance payments designed to meet a family's ongoing basic
needs."

Certain types of assistance are explicitly excluded from the definition
of welfare assistance for the FSS program, such as non-recurrent
short-term benefits, child-care services provided to working families
and food stamps.

The Department has received many inquiries from PHAs asking whether TANF
non-needy and child-only grants on behalf of a dependent child are
considered welfare assistance under the regulatory definition for the
FSS program. Typically, the inquiries involve TANF grants that have been
provided when a grandparent takes a grandchild into the household for an
indeterminate period of time near the end of the grandparent's FSS
contract term. Grandparents or other relatives take the children into
their homes when the parents are unable to care for the children. Such
arrangements provide stability and continuity for the children and make
it unnecessary for the children to enter the foster care system. The
concern for FSS program participants has been whether receipt of the
non-parental TANF child-only grant would prevent the FSS family from
qualifying to receive the FSS escrow account.

**[Applicability.]{.underline}**

The guidance in this Notice applies to families enrolled in the Public
Housing and Housing Choice Voucher FSS programs administered by PHAs.

**[Impact of Non-Parental Child-Only Grants on FSS
Households.]{.underline}**

The Department has determined that child-only or non-needy TANF grants
made to or on behalf of a dependent child solely on the basis of the
child's need and not on the need of the child's current non-parental
caretaker do not qualify as welfare assistance under the FSS regulations
because such grants are not designed to meet the "family's ongoing basic
needs."

**[Additional Information.]{.underline}**

Any questions about this Notice related to the HCV/FSS program should be
directed to the Housing Voucher Management and Operations Division on
(202) 402-4055. Questions related to the Public Housing FSS program
should be directed to the Office of Public Housing Investments on (202)
402-2341. (These are not toll-free numbers.)

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Orlando J. Cabrera, Assistant Secretary for

Public and Indian Housing