Rent reimbursement cut for hundreds of low-income Iowans

Hundreds of low-income Iowans will get an unpleasant surprise when they apply for rent reimbursement from the state this year.

The Iowa Department of Revenue is reducing 2014 reimbursements to 429 low-income seniors and disabled residents by an average $89 after discovering the agency accidentally overpaid them last year.

'Rather than try to recoup that, we decided to offset that with the next year's payment,” said Victoria Daniels, department spokeswoman. 'I don't think it was huge. Of course, it's very important to this segment of the population.”

The state reimburses up to $1,000 in rent for Iowans over 64 or disabled and who have a household income of less than $22,011. About 36,000 people applied for the payments last year, Daniels said.

Many Iowans use the payments to cover unexpected bills or higher-than-usual heating costs, said Fred Nelson, an attorney with Iowa Legal Aid who works with the Hotline for Older Iowans.

'It's of huge importance, particularly this time of year,” Nelson said.

An unexpected loss in rent reimbursement could mean a family has to cut back other expenses, such as food or car insurance, attorneys said.

The error happened when the DOR transposed numbers on the 2013 reimbursement form, Daniels said. Despite overpaying about $38,000, the revenue department didn't discover the error until employees prepared the 2014 form, which must be filed by June 1. Recipients did not report being overpaid, she said.

As affected Iowans apply for their 2014 rent reimbursement, the state is sending letters describing the error and the reduction in payment. Nearly 160 letters have gone out so far.

The gaffe comes one month after the Revenue Department reported a computer programming error caused the agency to misallocate more than $9 million in sales taxes to be used for school infrastructure projects.

School districts in high-retail, metro areas - including Iowa City, Cedar Rapids and Des Moines - were shorted dollars, while districts in rural areas received more money than they should have for the year that ended June 30.

The Revenue Department worked with the Iowa Association of School Boards to rectify those payments in January.

BY THE NUMBERS

$1,000:

Maximum annual rent reimbursement for low-income 65-plus or disabled Iowans

36,000:

Iowans applied last year

429:

Iowans overpaid in 2014, scheduled for reductions this year

$88.89:

Average reduction