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How can municipalities determine income eligibility in order to best leverage federal funding for vulnerable populations?

The American Rescue Plan Act of 2021’s (“ARP”) Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) prioritize programs, services, or assistance for communities disproportionately affected by COVID-19.[1] In the CSLFRF Final Rule, the U.S. Department of the Treasury (“Treasury”) maintains the presumption that “a household or population that experienced unemployment, experienced increased food or housing insecurity, or is low- or moderate-income”[2] was negatively affected by the pandemic and may be provided appropriate services by the recipient. In addition, families living in Qualified Census Tracts (“QCT”) or receiving services from Tribal governments are presumed to be disproportionately impacted by the pandemic.[3] The Final Rule further assists in determining what populations have been presumably impacted by defining low- and moderate-income.

The final rule defines a household as low income if it has (i) income at or below 185 percent of the Federal Poverty Guidelines (FPG) for the size of its household based on the most recently published poverty guidelines by the Department of Health and Human Services (HHS) or (ii) income at or below 40 percent of the Area Median Income (AMI) for its county and size of household based on the most recently published data by the Department of Housing and Urban Development (HUD).

The final rule defines a household as moderate income if it has (i) income at or below 300 percent of the FPG for the size of its household based on the most recently published poverty guidelines by HHS or (ii) income at or below 65 percent of the AMI for its county and size of household based on the most recently published data by HUD.[4]

When determining whether to measure income levels by specific households or geographic areas, and between actual household size and default household size, recipients should consider the type of service being provided.[5] The Final Rule also provides guidance on identifying other eligible populations.[6]

The U.S. Department of Housing and Urban Development (“HUD”) defines a QCT as an area in which 50 percent or more of the households are income-eligible, with the population of all census tracts satisfying this criterion not to exceed 20 percent of the total population of the respective area.[7] A low-income QCT must have 50 percent of households with incomes below 60 percent of the Area Median Gross Income (“AMGI”).[8] For a complete list of metropolitan and nonmetropolitan QCTs, municipalities may consult the referenced HUD website on QCTs.[9]

Moreover, according to the Final Rule:

In identifying other disproportionately impacted classes, recipients should be able to support their determination that the pandemic resulted in disproportionate public health or economic outcomes to the specific populations, households, or geographic areas to be served.[10]

In addition, the Social Vulnerability Index (“SVI”) provides municipalities with a means of identifying vulnerable populations. It uses U.S. Census data to determine the relative social vulnerability of every census tract. The SVI ranks each tract on 14 social factors and groups them into four categories:

  • Socioeconomic Status
  • Household Composition and Disability
  • Minority Status and Language
  • Housing and Transportation[11]

The SVI is used by emergency response planners, public health officials, and municipalities to identify and map communities that will most likely need support before, during, and after a natural disaster or public health emergency.[12]

It should be noted that additional information may be provided when Treasury issues new Frequently Asked Questions ("FAQ") specific to the Final Rule, as indicated in the Interim Final Rule FAQ, updated simultaneously with the issuance of the Final Rule.[13] In addition, Treasury encourages municipalities to consider the guidance issued in the Statement Regarding Compliance with the Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule and Final Rule.[14]

Last Updated: March 11, 2022

[1] American Rescue Plan Act of 2021 § 9901, Pub. L. No. 117-2, amending 42 U.S.C. § 801 et seq., at § 603, available at: https://www.congress.gov/bill/117th-congress/house-bill/1319/text#HAECAA3A95C4E4FFAB6AA46CE5F9CB2B5.

[3] Id., at 30.

[4] Id., at 30-31.

[5] Id., at 31.

[6] Id., at 42-46.

[7] U.S. Department of Housing and Urban Development: Qualified Census Tracts and Difficult Development Areas, available at: https://www.huduser.gov/portal/datasets/qct/qct99home.html.

[8] U.S. Department of Housing and Urban Development: Qualified Census Tracts and Difficult Development Areas and Construction Delays Due to COVID-19, available at: https://www.huduser.gov/portal/datasets/qct.html.

[9] U.S. Department of Housing and Urban Development: Qualified Census Tracts and Difficult Development Areas and Construction Delays Due to COVID-19, available at: https://www.huduser.gov/portal/datasets/qct.html#2021or https://www.huduser.gov/portal/Datasets/qct/DDA2021M.PDF.

[10] Treas. Reg. 31 CFR 35 at 44, available at: https://home.treasury.gov/system/files/136/SLFRF-Final-Rule.pdf

[11] Centers for Disease Control and Prevention: A Social Vulnerability Index from the CDC as of June 8, 2021, available at: https://svi.cdc.gov/Documents/Publications/CDC_ATSDR_SVI_Materials/SVI_Poster_07032014_FINAL.pdf.

[12] Centers for Disease Control and Prevention: A Social Vulnerability Index (SVI) from the CDC, available at: https://svi.cdc.gov/prepared-county-maps.html.

[13] Coronavirus State and Local Fiscal Recovery Funds, Frequently Asked Questions (as of January 2022), at 1, available at: https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf.

[14] U.S. Department of the Treasury, Statement Regarding Compliance with the Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule and Final Rule, available at: https://home.treasury.gov/system/files/136/SLFRF-Compliance-Statement.pdf.