Does using a Medicare Advantage flex card for rent count as income in HUD-assisted housing?

Meta description: Does a Medicare Advantage flex card for rent count as income in HUD housing? Learn HUD’s 2025 rule.

If you receive help paying for rent through a Medicare Advantage plan, it is smart to ask one key question before you use it: will it change the income used to calculate your HUD rent and subsidy?

People often call this benefit a “flex card,” a preloaded debit card that can be used only for certain plan approved expenses. In some plans, the card can be used for housing costs such as rent or utilities. In many HUD programs, “income” has a specific meaning that is not the same as taxable income.

This guide explains:

• What HUD means by income in assisted housing
• When flex card spending is counted and when it is not
• Practical steps to report and document rent payments so you avoid surprises at recertification

For related Understood Care guides, see:
https://understoodcare.com/uc-articles/flex-cards-and-grocery-benefits-that-can-also-pay-rent-or-utilities
https://understoodcare.com/uc-articles/eviction-prevention-and-emergency-rent-help-for-older-adults-on-medicare
https://understoodcare.com/uc-articles/checklist-documents-to-gather-before-applying-for-food-or-housing-help
https://understoodcare.com/care-types/application-help

Key takeaway

Yes, it can count as income for HUD rent calculations, but only in a specific situation.

HUD explains that when you receive Medicare Advantage supplemental benefits and you actually use them to pay for rent or utilities, the dollar amount used for rent or utilities must be included in the income calculation used for HUD assisted housing. If you use the card for other plan approved supplemental benefits, or if some of the balance expires unused, those amounts should not be counted as income.

This article is informational and is not legal advice. Your local housing provider can tell you how they apply HUD’s rules in your specific program.

Why this question matters in Section 8, public housing, and other HUD programs

Many HUD programs set your share of rent based on a household income calculation that is updated at least once each year. Depending on the program, this may happen during an annual reexamination or when you report a change in income.

Even a small change in counted income can affect:

• Your monthly rent contribution
• The subsidy amount paid on your behalf
• Whether you remain eligible for some programs

That is why it helps to understand what HUD counts and what it excludes before you use any benefit for rent.

How HUD defines “income” for rent and subsidy calculations

HUD uses a definition called annual income. In plain language, it includes money or support you receive, or that is paid on your behalf, unless there is a specific HUD exclusion.

This is why something can be non taxable and still matter for HUD. The question is not “Is this taxable?” The question is “Is this included or excluded under HUD’s annual income rules?”

What a Medicare Advantage flex card is, and why some can pay rent

Medicare Advantage, also called Medicare Part C, is a way to receive Medicare Part A and Part B coverage through a private plan that follows Medicare rules. Many plans also offer supplemental benefits. Some supplemental benefits are delivered through a prepaid card, often called a flex card.

Not every flex card can be used for rent. Whether rent is allowed depends entirely on your plan design and your eligibility for that benefit. Some rent or utility supports may be offered as special supplemental benefits for the chronically ill, sometimes shortened to SSBCI.

If you are not sure what your card can be used for, look for these terms in plan materials:

• Flex card
• Preloaded debit card
• Utilities benefit
• Rent support
• Supplemental benefits
• SSBCI

When flex card rent help counts as income in HUD-assisted housing

If you use the flex card to pay rent

If the benefit is used to pay rent, HUD says that support cannot be excluded from the income determination. In practice, this means the amount you actually use for rent may increase the income used to calculate your rent share.

What to remember:

• It is the amount spent on rent that matters, not the card’s maximum balance.
• If your plan loads $100 a month and you spend $30 toward rent, the $30 is the part that must be included.
• If you never use the card for rent, your housing provider generally should not treat the card as income just because you have it.

If you use the flex card to pay utilities

HUD applies the same concept to utility support. If the card is used to pay for utilities that your housing provider treats as tenant paid utilities, the amount used for that purpose must be included as income.

If you use the card for other plan approved expenses

HUD clarifies that other Medicare Advantage supplemental benefit spending is excludable from annual income. This includes typical flex card uses such as:

• Over the counter health items
• Groceries or special dietary items when they are part of the plan benefit
• Transportation tied to the plan benefit
• Other approved supports provided through the plan

If the card is “use it or lose it”

Many flex cards work on a use it or lose it schedule, meaning unused dollars expire at the end of the month, quarter, or plan year.

HUD states that unused benefits that expire should not be counted in your income calculation. Only the portion used for rent or utilities is counted.

How housing providers are expected to handle verification

HUD emphasizes that most Medicare Advantage supplemental benefits will be excluded from income determinations and do not need to be verified. For flex cards, the housing provider should generally assume the card is not being used for rent or utilities unless there is information suggesting otherwise, or you report that you have used or will use the benefit for rent or utilities.

If you do use the benefit for rent or utilities, HUD says housing providers should attempt to collect third party documentation of the expenses. If third party documentation is not available, HUD allows the provider to accept your self certification.

Examples of documentation that may help include:

• A plan notice or benefit summary showing that rent support is part of your benefits
• A transaction history from the card administrator that shows payments applied to rent
• A landlord receipt or ledger showing the amount paid with the card

Practical steps if you are considering using a flex card for rent

1. Confirm whether rent is actually allowed under your plan
   Ask for the plan’s written description of the rent benefit and any limits.
2. Ask your housing provider how they want rent support reported
   Tell them you may receive Medicare Advantage rent support and want to report it correctly.
3. Keep a simple record each month you use it for rent
   Save a receipt, a transaction confirmation, or a landlord statement.
4. Report changes promptly if required by your program
   Some programs require interim reporting when income changes. If you start using rent support, ask whether you need to report it before your next annual review.

What to do if your rent went up just because you received a flex card

If your housing provider increased your rent because you received a flex card, but you did not use it for rent or utilities, ask for a review.

You can explain:

• The card is a Medicare Advantage supplemental benefit.
• You have not used it for rent or utilities.
• HUD guidance says other flex card spending and unused balances should be excluded, and providers should generally assume the card is not used for rent or utilities unless there is information showing that it is.

If you can, provide a short written statement confirming you have not used the benefit for rent or utilities.

If you need help gathering documents, reporting changes, or organizing an application or appeal, Understood Care’s application support may be helpful:
https://understoodcare.com/care-types/application-help‍

FAQ

• Does a Medicare Advantage flex card count as income for Section 8?
  It can, but only if you use the benefit to pay rent or utilities. Other plan approved flex card spending is generally excluded under HUD’s guidance.
• Does a flex card used for rent count as income in public housing?
  HUD’s guidance says the amount used for rent or utilities must be included in the income calculation used for HUD assisted housing programs, including public housing.
• If I receive a flex card but never use it for rent, should it be counted as income?
  HUD indicates housing providers should generally assume flex card benefits are not used for rent or utilities unless there is information suggesting otherwise.
• Does the unused flex card balance count as income for HUD housing?
  HUD explains that unused benefits that expire, such as use it or lose it amounts, should not be counted as income.
• Do I have to report Medicare Advantage rent support from a flex card right away?
  Many programs require you to report income changes, but timelines vary. If you start using the benefit for rent or utilities, ask your housing provider whether an interim report is required.
• What proof can I use to show how my flex card was used for rent?
  Helpful documentation can include plan benefit materials, card transaction records, and landlord receipts or ledgers. If third party documentation is not available, HUD allows self certification in this situation.
• Is HUD “income” the same as taxable income for the IRS?
  No. HUD uses its own annual income rules for rent and subsidy calculations, and some non taxable support can still affect the HUD income calculation.

References

• U.S. Department of Housing and Urban Development. Medicare Advantage Supplemental Benefits FAQ (January 2025). https://www.huduser.gov/portal/portal/sites/default/files/pdf/FAQ-Medicare-Advantage-Supplemental-Benefits.pdf
• U.S. Department of Housing and Urban Development. Attachment A: Section 8 Definition of Annual Income (24 CFR Part 5, Subpart F, 5.609). https://www.hud.gov/sites/documents/calculatingattachment.pdf
• U.S. Government Publishing Office. 24 CFR § 5.609 Annual income (PDF, 2024). https://www.govinfo.gov/content/pkg/CFR-2024-title24-vol1/pdf/CFR-2024-title24-vol1-sec5-609.pdf
• U.S. Department of Housing and Urban Development. Exhibit 5-1: Annual Income Inclusions and Exclusions (HUD Handbook 4350.3). https://www.hud.gov/sites/documents/doc_35699.pdf
• U.S. Government Publishing Office. 24 CFR § 5.603 Definitions (PDF, 2024). https://www.govinfo.gov/content/pkg/CFR-2024-title24-vol1/pdf/CFR-2024-title24-vol1-sec5-603.pdf
• Medicare. Health plans and Medicare Advantage plans. https://www.medicare.gov/health-drug-plans/health-plans
• Medicare. Understanding Medicare Advantage Plans (booklet PDF). https://www.medicare.gov/publications/12026-understanding-medicare-advantage-plans.pdf
• U.S. Department of Health and Human Services. What is Medicare Part C? https://www.hhs.gov/answers/medicare-and-medicaid/what-is-medicare-part-c/index.html
• Centers for Medicare & Medicaid Services. SSBCI HPMS Memorandum (April 24, 2019) (PDF). https://www.cms.gov/medicare/health-plans/healthplansgeninfo/downloads/supplemental_benefits_chronically_ill_hpms_042419.pdf
• U.S. Government Publishing Office. 42 CFR § 422.102 Supplemental benefits (most recent PDF). https://www.govinfo.gov/link/cfr/42/422?link-type=pdf&sectionnum=102&year=mostrecent

This information is for general education and does not replace medical advice from your own clinicians or care team. If you are considering PACE or have questions about PACE program food benefits, talk directly with your local PACE organization or a trusted advocate.