44-270.F. Income Eligibility and Budgeting

 

Table of Contents

Section

Topic

44-270.F.1

Prospective Budgeting and Reasonably Anticipated Income

44-270.F.2

Income Eligibility at Initial Application

44-270.F.3

Income Changes Prior to the Approval of Aid

44-270.F.4

Continuing Income Eligibility

44-270.F.5

Rules for Anticipating Income

44-270.F.6

Examples of Reasonably Anticipated Income

44-270.F.7

Using of Conversion Factors

44-270.F.8

Examples of Using Conversion Factors

44-270.F.9

Budgeting Stable Income

44-270.F.10

Budgeting Fluctuating Income

44-270.F.11

Budgeting Contract Income

44-270.F.12

Budgeting Income that Stops or Starts Mid-Period

CPG Letter 308 (1/14)

 

44-270.F.1
Prospective Budgeting and Reasonably Anticipated Income
Top

PROSPECTIVE BUDGETING

The use of income that the applicant or recipient anticipates with reasonable certainty will be received in the upcoming Semi-Annual Reporting (SAR) Payment Period.

REASONABLY ANTICIPATED INCOME

The specific amount of income that is reasonably certain to be received in the SAR Payment Period as determined by the applicant/ recipient and the Human Services Specialist (HSS).  This applies to both earned and unearned income.

If the amount of income that will be received or when it will be received is not known, then the income cannot be reasonably anticipated.  Income that is uncertain will not be used in the eligibility determination.

Since the budget is never reconciled with actual income, it is critical for the HSS to obtain the necessary income verifications and enter detailed case comments to document the determination of reasonably anticipated income.

ACL 12-25

 

44-270.F.2
Income Eligibility at Initial Application
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The Assistance Unit (AU) must first establish initial income eligibility to CalWORKs by passing the Applicant Test using the application month’s actual income, per CPG 44-100.K.

·         If the AU passes the Applicant Test, the HSS will determine the benefit amount for each month of the semi-annual period using reasonably anticipated income.

·         If the AU does not pass the Applicant Test but the HSS determines there may be eligibility within 60 days of the application date, another Applicant Test will be completed using the second month’s reasonably anticipated income.

If the AU is eligible, CalWORKs will be approved effective the first of the month following the application month.  See CPG 44-270.B.3 regarding the beginning date of aid (BDA).

Example:

Scenario

An AU of 3, Mom and her two children, applies for CalWORKs on July 25th.

Mom was recently laid off and received her last paycheck on July 20th.  She received $2,000 in July.

Each child also receives $200/month from their absent father’s disability.

The AU fails the Applicant Test for July based on their current July income:  $2,000 + ($200 x 2) = $2,400. 

Mom reasonably anticipates receiving only the children’s income effective August.

Outcome

The HSS determines that the AU is financially eligible to CalWORKs beginning August 1st.  The AU is denied CalWORKs for the application month of July and is approved effective the second month going forward using the same application.

The AU will be assigned to SAR Cycle 2 based on their BDA.  August - January will be their first SAR Payment Period.

REMINDER:  Cash aid received from another state is considered unearned income and will be used along with other actual and anticipated income to determine if the applicant passes the Applicant Test.  The HSS will only budget cash aid from another state in the month(s) it is received and/or anticipated to be received.

ACLs 12-25; 12-25 Errata

 

44-270.F.3
Income Changes Prior to the Approval of Aid
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CalWORKs applicants are required to report changes that affect their eligibility within 5 calendar days, per CPG 40-100.B.2. 

When there is a change in income that occurs during the initial application process prior to the approval of benefits, the HSS must consider the new information when determining eligibility to aid.

If CalWORKs has not yet been approved, the new information must be considered regardless of whether the change occurred after the date of the initial interview.

If a change in income occurs after CalWORKs has been approved, the AU will not be required to report the new information mid-period unless the total household income exceeds the Income Reporting Threshold (IRT).  See CPG 44-270.G and 44-270.H for mandatory and voluntary mid-period reports.

ACL 12-25

 

44-270.F.4
Continuing Income Eligibility
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Following the initial CalWORKs approval, continuing income eligibility will be determined using prospective budgeting and reasonably anticipated income based on information reported by the AU.

It is critical for the HSS to enter detailed case comments regarding how income was evaluated and used (or not used) in the benefit determination.  Case comments must document any anticipated changes in income, including unstable income that the recipient cannot reasonably anticipate will be received in the upcoming SAR Payment Period.

MID-PERIOD REPORTS

For income changes reported mid-period, the HSS will use the current month’s income (i.e., the month in which the change was reported) and any anticipated changes to determine if any mid-period action is required.

See CPG 44-270.G for mandatory reports of income exceeding the IRT and CPG 44-270.H for voluntarily reported income changes that result in an increase in benefits.

SAR 7 AND ANNUAL REDETERMINATION REPORTS

AUs are required to provide information for the Data Month and to report any anticipated changes for the upcoming six months.  Information for the Data Month is considered reasonably anticipated and will be used in the budget calculation, unless a change for the upcoming SAR Payment Period is anticipated.

If there is no conflicting information, the HSS will accept the income and anticipated changes reported on the SAR 7 and at annual redetermination and use the information to determine benefits for the next SAR Payment Period. 

ACL 12-25

 

44-270.F.5
Rules for Anticipating Income
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NEW INCOME

New income from a new source will only be considered reasonably anticipated if:

1.    The AU verifies that the income has been or will be approved or authorized within the upcoming SAR period, or the AU is otherwise reasonably certain that the income will be received within the SAR period;

2.    The anticipated amount of the income is known and verified, or the AU is otherwise reasonably certain of the amount of the income; and

3.    The start date of the income is known and verified, or the AU is otherwise reasonably certain of the start date of the income.

If the AU anticipates receiving income in the upcoming SAR Payment Period but does not have reasonable certainty of the dates and/or amounts expected to be received, the income cannot be considered reasonably anticipated and will not be used in the benefit determination for the upcoming SAR Payment Period.

Rules for anticipating Unemployment Insurance Benefits (UIB) may differ by program.  For CalWORKs, UIB may not be reasonably anticipated based only on current claim information from the EDD Real-Time Match, regardless if there are no issues to be resolved.

Additional information, such as an IEVS report, is needed to determine whether any UIB income has actually been issued.  The start date must be known and verified in order for the UIB income to be reasonably anticipated for the SAR Payment Period. 

For CalFresh and Medi-Cal, rules for anticipating UIB may be found in CFPG 63-281.4 and MPG 4.12.03.

FLUCTUATING INCOME

When the AU’s monthly income fluctuates or the AU expects that the income received in the Data Month will change during the upcoming SAR Payment Period, the HSS must attempt to determine what amount of income is reasonably expected to be received.

Only the income that the AU reasonably anticipates will be received during the upcoming SAR Payment Period may be used in the benefit determination.  If the recipient states that the Data Month income is not typical, explains why, and provides a reasonable estimate of future income, the HSS may budget the estimated income unless there is conflicting information.

If the recipient cannot anticipate an amount or if it is uncertain whether the income will be received in the upcoming SAR Payment Period, then no income can be reasonably anticipated or used in the benefit determination.  The determination that income is too uncertain to anticipate must be done on a case-by-case basis.

The HSS must follow-up with the recipient to determine what amount, if any, can be reasonably anticipated and document in case comments the basis for the amount agreed upon by the recipient and the HSS.

See CPG 44-270.F.10 for budgeting fluctuating income.

Example:

Scenario

A recipient has fluctuating income but agrees that she usually makes at least $200/month. 

Outcome

Since $200/month is the minimum income amount that the recipient can reasonably anticipate, the HSS will use $200/month in the benefit determination unless there is conflicting information.

CHANGING INCOME

If the AU reports an upcoming change or discontinuance in income, but is uncertain when the change will take place or by how much the income will change, the HSS cannot reasonably anticipate this change and will continue to use the current income information in the benefit determination.  The HSS will advise the recipient to report when the income actually changes or discontinues.

See CPG 44-270.F.12 for budgeting income that stops or starts mid-period.

ACL 12-25

 

44-270.F.6
Examples of Reasonably Anticipated Income
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Example 1:  Unemployment Insurance Benefits (UIB)

Scenario

A recipient reports that he recently applied for UIB and believes that he qualifies for $400 in UIB.

He does not provide verification and there is no available EDD information that indicates when benefits will start.

Outcome

The UIB income cannot be reasonably anticipated because the amount and expected date of receipt are not known.

 

Example 2:  New Job Offer

Scenario

A recipient reports that she was offered a job after a recent job interview.  She was informed of the salary range but has no other information.

Outcome

Income from the new job cannot be reasonably anticipated for the next SAR Payment Period.

All known information must be documented in case comments.

 

Example 3:  Income Varies (Reasonably Anticipated)

Scenario

A recipient is a waitress and does not earn the same amount each month due to extra shifts or cut-backs.  She reports that the income she received in the Data Month is “typical.”

Outcome

Since the income amount reported on the SAR 7 can be reasonably anticipated by the recipient, the HSS will use the Data Month income to determine benefits for the next SAR Payment Period.

 

Example 4:  Income Varies (Minimum Amount Known)

Scenario

A recipient’s income varies from $200 - $400/month.

The employer cannot confirm the earnings or work schedule, but the recipient states his earnings are usually at least $200/month.

Outcome

Since $200/month can be reasonably anticipated by the recipient, the HSS will use this amount to determine benefits for the next SAR Payment Period.

 

Example 5:  Recently Laid Off

Scenario

A recipient was recently laid off and her biweekly earnings have terminated.  She recently applied for UIB but has not heard back from EDD.

Outcome

No income can be reasonably anticipated for the next SAR Payment Period.

The recipient does not know the status of her UIB claim and cannot use her prior employment history to reasonably anticipate income.

ACL 12-25

 

44-270.F.7
Using Conversion Factors
Top

Income that is received on a weekly or biweekly basis must be converted to a monthly amount if it is anticipated to be received in the upcoming SAR Payment Period.  The income will be converted as follows:

·         Weekly Income:  Add the four (or five) weekly checks together and divide by four (or five) to get an average weekly amount.  Multiply this amount by 4.33.

·         Biweekly Income:  Add the two (or three) biweekly checks together and divide by two (or three) to get an average weekly amount.  Multiply this amount by 2.167.

Each paycheck does not need to be the same amount; however, the AU must anticipate that their monthly income will continue at that level in order to convert the income into a monthly average.

NOTE:  If the income fluctuates and the AU cannot reasonably anticipate that their Data Month income will continue at the same amount, the weekly and biweekly conversion factors may not be used.

ACL 12-25

 

44-270.F.8
Examples of Using Conversion Factors
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Example 1:  Weekly Income (Conversion Factor Used)

Scenario

A recipient reports receiving $200/week and is reasonably anticipated to continue at the same amount for the upcoming SAR Payment Period.

Outcome

The monthly average income amount will be calculated as follows:  $200 x 4.33 = $866.

 

Example 2:  Weekly Income (Conversion Factor Not Used)

Scenario

A recipient reports that she will work the first three weeks of each month and be paid $200/week for each week that she worked.

Outcome

Since the recipient does not expect to be paid every week, the weekly conversion factor cannot be used.

Instead, the monthly income amount of $600 will be used in the benefit calculation.

 

Example 3:  Weekly Income (One Paycheck Disregarded)

Scenario

A SAR 7 is provided with four weekly paychecks of varying amounts:  $200, $450, $190, and $225.

The recipient explains that extra hours were worked in the second week because a co-worker was out sick, but that the other three checks are typical and she expects this income will continue at this level.

Outcome

Unless there is conflicting information, the HSS will disregard the higher check ($450).

The monthly average income will be calculated as follows:

$200 + $190 + $225 = $615 / 3 = $205

$205 x 4.33 = $887.65

Case comments must be entered to clearly explain how the income determination was completed and the reason for disregarding the higher paycheck.

 

Example 4:  Weekly Income (Averaged)

Scenario

A recipient reports on her SAR 7 that four weekly paychecks were received in the Data Month:  $115, $100, $135, and $95.

The income is not expected to change during the next SAR Payment Period.

Outcome

The monthly average income will be calculated as follows:

$115 + $100 + $135 + $95 = $445 / 4 = $111.25

$111.25 x 4.33 = $481.71

 

Example 5:  Biweekly Income (Averaged)

Scenario

A recipient provides two biweekly paychecks:  $115 and $350.

He expects this income amount and frequency to continue.

Outcome

The monthly average income will be calculated as follows:

$115 + $350 = $465 / 2 = $232.50

$232.50 x 2.167 = $503.83

 

Example 6:  Biweekly Income (Two Paychecks Disregarded)

Scenario

A recipient regularly works 35 hours/week at $10/hour and is paid biweekly.  She received three paychecks in the Data Month:  $400, $500, and $700.

She reports that her normal paychecks are $700 every two weeks; but that she missed work earlier in the month due to a family emergency and does not expect to take any additional time off.

Outcome

Since the lower paychecks ($400 and $500) are not expected to continue, the HSS will disregard this income.

The monthly average income will be calculated as follows:  $700 x 2.167 = $1,516.90

The HSS will remind the recipient to report when her income is less than expected in order to be evaluated for a supplemental payment.

 

Example 7:  Biweekly Income (Varying Amounts)

Scenario

A recipient works varying hours depending on when his employer needs him.  He received three biweekly paychecks in the Data Month:  $600, $900, and $660.

He reports that the $900 check was unusually high because he was covering another shift but that the other checks are representative of his normal pay.

Outcome

The HSS verifies the information and determines this to be correct and disregards the $900 paycheck.

The monthly average income will be calculated as follows:

$600 + $660 = $1,260 / 2 = $630

$630 x 2.167 = $1,365.21

Case comments must be entered to document the reason the higher paycheck was not used in the benefit determination.

 

Example 8:  New Weekly Income (Reasonably Anticipated)

Scenario

A recipient reports on her SAR 7 that she started a job in the Data Month and earned $400.  She provides two weekly paychecks for $200/week and states that her income will continue at this amount.

Outcome

The HSS understands this to mean that the recipient will continue to receive $200/week every week.

The monthly average income will be calculated as follows:  $200 x 4.33 = $866

Case comments must be entered to explain how the income amount was determined.

ACL 12-25

 

44-270.F.9
Budgeting Stable Income
Top

When an AU has stable monthly income and does not expect any changes in the upcoming SAR Payment Period, the income reported at initial application, on the SAR 7, or at annual redetermination will be used in the benefit determination for the next SAR Payment Period.

The conversion factors described in CPG 44-270.F.6 will be used for income received on a weekly or biweekly basis.

ACL 12-25

 

44-270.F.10
Budgeting Fluctuating Income
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When the AU anticipates its income for the upcoming SAR Payment Period will fluctuate from what was received in the Data Month, the HSS may use the following guidelines to determine what income amount can be reasonably anticipated:

·         Take into account any changes in income from the Data Month that the AU reasonably anticipates for the upcoming SAR Payment Period.

·         Use the Data Month income until the recipient reports a reasonably anticipated change.

·         Assist the AU in determining the amount of income that can be reasonably anticipated, including contacting the employer or other third party when a signed authorization for release of information is provided by the recipient.

·         Take into account past income from the previous SAR Payment Period (or comparable season if income fluctuates seasonally) if no third party verification is available and no income changes have occurred or are anticipated.

If the AU reports their income fluctuates so much each month that no amount can be reasonably anticipated, and there are some months when no income is received, then the HSS may budget no income in the benefit determination unless there is conflicting information.

If information on the SAR 7 is unclear or questionable and the recipient refuses to assist in providing required information or fails to provide information necessary to determine continuing eligibility, CalWORKs may be discontinued with timely and adequate notice.

NOTE:  If the recipient is attempting to cooperate to the best of his/her ability but is unable to provide necessary information, the recipient will not be considered “failing to cooperate” and CalWORKs cannot be discontinued for that reason.

Example 1:  Weekly Income (Not Reasonably Anticipated)

Scenario

A SAR 7 is provided with weekly paychecks of varying amounts:  $50, $150, $75, and $500.

Five pay dates were expected in the Data Month, but the recipient reported no earnings for one week.

Outcome

The HSS contacts the recipient to clarify the discrepancy.  The recipient works on an on-call basis and has no idea when he will be called in.

A review of the recipient’s employment history shows that there have been previous periods when no income from this employer was received at all.  The employer confirms that the opportunity for the recipient to work any minimum amount of hours is not guaranteed.

Unless there is conflicting information, the HSS may budget zero income for the next SAR Payment Period.

Case comments must clearly explain how the income determination was completed and the reason that no income was used in the benefit determination.

 

Example 2:  Weekly Income (Amount Anticipated)

Scenario

Same scenario as Example 1 above; however, the recipient anticipates that he will receive at least $150/month.

Outcome

Unless there is conflicting information, the HSS will budget $150/month for the upcoming SAR Payment Period.

Case comments will be entered to explain how the income was reasonably anticipated.

 

Example 3:  Fluctuating Income

Scenario

A recipient works part-time and her work hours vary each month.

She reports on her May SAR 7 that she worked 70 hours in May but states that she is unable to project with reasonable certainty how many hours she will be working during the next SAR Payment Period.

Outcome

The HSS reviews the recipient’s employment history and previous income reports, which indicate that she worked 70 – 80 hours per month during each month of the previous SAR Payment Period.

The recipient confirms that she is scheduled to work 70 hours/month but sometimes picks up extra shifts; however, those extra shifts are unpredictable.

Since the income from the recipient’s scheduled 70 hours per month can be reasonably anticipated, the HSS will use that income to determine benefits for the next SAR Payment Period.  The HSS will disregard the income from the extra shifts as that cannot be reasonably anticipated.

The HSS must review with the recipient how to complete the SAR 7 in order for her reasonably anticipated income to be correctly reported.

ACL 12-25

 

44-270.F.11
Budgeting Contract Income
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CalWORKs does not have special rules for budgeting annual contract/ self-employment income.

When an AU receives its annual income in a period of time shorter than one year, the HSS will budget the contract income as follows:

If the AU receives ...

Then the contract income will be ...

CalWORKs and CalFresh

Averaged over 12 months and budgeted in accordance with the CalFresh rules explained in CFPG 63-247.2 and 63-282.11.

CalWORKs only

Budgeted in accordance with the prospective budgeting and reasonably anticipated income rules explained in CPG 44-270.F.1.

NOTE:  Contract income that is not a household’s annual income and is not paid on an hourly or piecework basis will be prorated over the period that the income is intended to cover.

Example 1:  Contract Income (CalWORKs and CalFresh)

Scenario

A CalWORKs/CalFresh recipient works at a school from the middle of September to the middle of June.

She receives $400 in the first month of the school year (September) and in the last month (June).  She receives $800/month during the school year when she works the entire month (October – May).  Her total income for the school year is $7,200.

She submits a complete June SAR 7 timely, reporting that her job ended in the middle of June at the end of the school year.   She anticipates returning to work in September for the next school year.

Outcome

Following CalFresh rules, the average monthly income amount will be calculated as follows:

$400 + ($800 x 8) + $400 = $7,200

$7,200 / 12 = $600

The HSS will budget $600/month for the upcoming SAR Payment Period.

 

Example 2:  Contract Income (CalWORKs only)

Scenario

Same scenario as Example 1 above; however the AU only receives CalWORKs.

Outcome

Since the recipient reported on her SAR 7 that her income ended, the HSS will determine if the recipient is eligible to a supplemental payment for the Submit Month July (when the change was reported).

The HSS will follow prospective budgeting rules and budget the income that is reasonably anticipated to be received during the next SAR Payment Period.

ACL 12-25

 

44-270.F.12
Budgeting Income that Stops or Starts Mid-Period
Top

Income that the AU anticipates will begin or end in one of the months of the upcoming SAR Payment Period will only be counted in the month(s) that the income is reasonably anticipated to be received.

Income that is beginning or ending will be treated differently depending on how certain the AU is that the income will begin or end:

·         If a recipient currently has stable monthly income but has heard he/she may get laid off soon, the HSS will continue to budget the current income until additional information is known.

The HSS will instruct the recipient to report when a lay-off notification is received or report in the month their income will actually decrease.

·         If a recipient thinks he/she will be starting a new job in the next month or so but is not sure about the start date or hours, income from this new income cannot be reasonably anticipated and will not be used in the benefit determination.

The HSS will remind the recipient of his/her responsibility to report within 10 days if the total household income exceeds their IRT.  The recipient must report the income on the next SAR 7 or at annual redetermination if the income is over IRT.

·         If a recipient is certain that his/her income will be ending or that new income will be starting in a certain month of the SAR Payment Period, the HSS will only budget the income for the months in which it is reasonably anticipated to be received.

The HSS will calculate two different grant amounts for the SAR Payment Period:  One amount for the months in which the income will be received and one amount for the months in which the income will not be received.

Example 1:  New Temporary Job (Reasonably Anticipated)

Scenario

An AU of four is in the June - November Payment Period (SAR Cycle 6).

Mom submits the October SAR 7 timely on November 8th and reports that she will start a part-time job in December that will probably only last until the end of January, when the holiday shopping season has ended. She anticipates that she will get paid $800 in December and $800 in January.

Outcome

The HSS will budget $800 per month for the upcoming SAR Payment Period and remind the recipient to report when her job has ended so that the benefit amount may be recalculated.

However, if there is verification that the job will end in January, the HSS will use $800 income for December and $800 for January and then act to increase CalWORKs effective February based on no income.

 

Example 2:  Upcoming Job Lay Off (Not Anticipated)

Scenario

A recipient reports on his SAR 7 that he made $800 in the Data Month.  He is paid weekly and received four weekly paychecks of $200 each.

He anticipates that his Data Month income will not remain the same and explains that he believes he will be laid off in the next month or two.

Outcome

The HSS will continue to budget a monthly income amount as follows:  $200 x 4.33 = $866.

The HSS will remind the recipient to report when he gets laid off or if his income decreases in order for benefits to be recalculated.

If the date of the layoff is verified, the income will only be counted in the months it is expected to be received.

 

Example 3:  New Job (Questionable)

Scenario

A recipient reports on his SAR 7 that he will be employed in the next SAR Payment Period.

He was told that he will be paid biweekly at $8.50/hour and thinks it will be for 30 hours/week.  He is uncertain about the start date.

Outcome

If the HSS is unable to verify the start date for the new job, the income will not be included in the budget for the upcoming SAR Payment Period.

The recipient is required to report within 10 days if income exceeds the IRT but any other mid-period income report will be considered voluntary.

 

Example 4:  Job Change (Reasonably Anticipated)

Scenario

An AU of two, Mom and her child, is in the June - November Payment Period (SAR Cycle 6).

Mom submits an October SAR 7 timely on November 8th and reports that her current job will end December 15th.  She also reports that she will start a new job on January 2nd and anticipates that her monthly salary will increase from $500 to $800.

Based on verification provided, the HSS determines that both jobs are paid twice a month on the 15th and 30th.  The last paycheck ($250) from the current job is expected to be received on December 30th.  The first paycheck from the new job ($400) is expected to be received January 30th.

Outcome

The HSS will reasonably anticipate income for the upcoming SAR Payment Period as follows:

December:  $500 ($250 x 2, December 15th and 30th).

January:  $400 (First paycheck, January 30th)

February – May:  $800/month ($400 twice a month).

ACL 12-25