Social Security comes directly from the US Government and is based on one's work history; we pay into Social Security, we don't pay into supplemental housing allowances :-) With Section 8, HUD gives the State money and the state divides it up; they have some overall rules and get X amount because the Feds knows/has decided the State's share of all the Fed money for housing is X but then things get interesting because there's the "poor" but not disabled and the disabled but who aren't on Social Security (or get VA or Military benefits), etc. and they all may need housing assistance.

States may want money from anyone who they are giving it to, any "income" at all, so I can see that some states might consider "their" HUD-based allowance income but not be able to touch someone else's (VA's) similar program; it's not under their control. I think it is kind of like how most states subtract out of your total income a matching amount when you get food stamps under SSI? They control SSI monies the same way they control HUD monies (and hence, since SSI has the same disability tests as for SSDI and they are in charge of the tests, some states are "harder" to pass).

It's all a very complicated racket run by Government employees so very red tape and confusion bound but getting States to agree with "each other" (to do things the same) is next to impossible :-)