63-254     Calculating Net Income and Benefit Levels

 

Table of Content

 

Section

Net Monthly Income Calculation

254.1

Calculating Net Monthly Income for Quarterly Reporting (QR) Households

254.2

Calculating Net Monthly Income of Households that Include an Elderly or Disabled Member

254.3

Determining Eligibility and Benefits of Household that Include an Elderly or Disabled Member

254.4

Determining Eligibility and Benefits for QR Households with no Elderly or Disabled Members

254.5

CalFresh Allotment Computation

254.6

Minimum Monthly Allotment

254.7

Eligibility to Benefits during the Initial Application Months

254.8

Change in Household Circumstances and Income Eligibility Test

254.9

Net Income Test Exceeds Maximum Levels at Application

254.10

x

 

63-254.1
Net Monthly Income Calculation

In calculating net monthly income, the entire calculation process including individual shelter and medical costs will include exact dollars and cents.  The final figure will be rounded down to calculations that end in 1 through 49 cents and rounded up for calculations that end in 50 through 99 cents.

 

63-254.2
Calculating Net Monthly Income for Quarterly Reporting (QR) Households

CalWIN will determine net income when entering case information in data collection.  Follow the steps listed below to determine a QR household’s net monthly income manually:

Step

Action

GROSS INCOME

1

Determine the household’s total gross unearned income:

a.  Add the monthly amount that could be anticipated for each month of the quarter for all household members (See Section 63-281.9-11);

b.  Deduct the obligated child support paid (subtract any remaining amount from the gross earned income in Step 2).

2

Determine the household’s total gross earned income:

a.  Add the gross monthly earned income  anticipated for each month of the quarter of all household members (See Section 63-281.9-11);

b.  Deduct any remaining obligated child support paid;

· If there is no unearned income and the obligated child support has not been deducted from the unearned income deduct the total obligated child support.

· If part of the obligated child support was deducted from the unearned income in Step 1 deduct the reminder of the obligated child support.

3

To determine the gross income add the total unearned income and the total gross earned income (total of Step 1 + Step 2).

4

Apply the Gross Income Test (130% FPL):

Compare total income (from Step 3) to the maximum gross income allowable for the household size as shown in the Income Eligibility Standards Table in Section 63-1101.3.  If the household’s total income is below the maximum gross allowed the household passes the Gross Income Test.  Continue to determine Net Income.

NET INCOME

5

a.  Add the total averaged unearned income (from Step 1a).

b.  Deduct the obligated child support paid (any remainder will be subtracted at Step 6c below).

6

a.  Add the total averaged gross earned income (from Step 2a)

b.  Subtract the earned income deduction (20%).

c.  Deduct the reminder of the child support paid (from Step 5b).

7

Add the total unearned income (from Step 5b) and the total gross earned income (from Step 6c). This is the adjusted gross income.

8

DEDUCTIONS

From the total adjusted gross income (Step 7) subtract:

a.  The standard deduction;

b.  Monthly dependent care expenses;

c.  The homeless shelter deduction.  If the household is not homeless determine the excess shelter deduction; go to Step 9.

d.  The total is the Adjusted Net Income.

9

EXCESS SHELTER COST COMPUTATION

a.  Total the allowable shelter expenses (rent/mortgage and/or SUA, or LUA or TUA) to determine shelter costs (unless the homeless shelter deduction has already been allowed);

b.  Determine 50% of the Adjusted Net Income (from Step 8);

c.  Subtract from the total shelter costs 50% of the household’s Adjusted Net Income (Step 9a - Step 9b);

·      If there is no excess shelter cost -this is the Net Monthly Income.

·      If there is excess shelter cost, continue to Step 10.

10

Subtract the excess shelter cost, up to the current maximum (Section 63-1102), from the household’s Adjusted Net Income (Step 8d).

This is the household’s Net Monthly Income.

11

If the household’s Net Income is below the maximum net income allowable for the household size (refer to table in Section 63-1101.3), the household is eligible to CalFresh if otherwise eligible.

Use the CalFresh Budget Worksheet QR 285B or the Scratch Budget to compute a budget manually,.

NOTE:  Follow the steps listed in Section 63-254.3 to determine the net monthly income of households that include an elderly or disabled member.

 

63-254.3
Calculating Net Monthly Income of Households That Include an Elderly or Disabled Member

Follow the steps listed in the table below to manually determine the net monthly income of a household that includes a member who is elderly or disabled:

Step

Action

Do not complete the gross income test for households with elderly/disabled household members.

1

a.  Add the total monthly unearned income of all household members;

b.  Deduct the obligated child support paid (subtract any remaining amount from the gross earned income in Step 2).

Note: If the household is Quarterly Reporting, add the monthly amount that could be anticipated for each month of the quarter (See Section 63-281.9-11) for each household member and divide by three to determine the averaged monthly gross unearned income.

2

a.  Determine the household’s total gross monthly earned income;

b.  Subtract the earned income deduction (20%).

c.  Deduct any remaining obligated child support paid from 2b.  (This is the adjusted gross earned income).

If there is no unearned income, deduct the total obligated child support.

Note: If the household is Quarterly Reporting, add the anticipated gross monthly earned income for each month of the quarter for each household member quarter (See Section 63-281.9-11) and divide by three to determine the averaged monthly gross earned income.

3

Add the total unearned income from Step 1b to the total adjusted gross earned income from Step 2c (Step 1b + Step 2c).

4

DEDUCTIONS

a.  Subtract the standard deduction from the total adjusted income (Step 3).  Subtract:

b.  The excess (over $35) medical expense. (For Quarterly Reporting households, use the averaged medical expense for the each month of the quarter).

c.  The monthly dependent care. For Quarterly Reporting households, use the averaged dependent care expense for the quarter.

d.  The homeless shelter deduction.  If not homeless go to Step 5:

f. The total is the Adjusted Net Income.

5

Shelter Deduction Computation

a.  Total the allowable shelter expenses to determine the shelter costs (unless the homeless shelter deduction has already been allowed).

b.  Determine 50% of the Adjusted Net Income (from Step 4f)

c.  Subtract from the total shelter costs, 50% of the household’s Adjusted Net Income (Step 5a – Step 5b).

d.  The remaining amount, if any, is the excess shelter cost.

6

Subtract the excess shelter cost from the household’s Adjusted Net Income (Step 4f).

The remainder is the Net Monthly Income.

7

If the household’s Net Income is below the maximum net income allowable for the household size (refer to table in Section 63-1101.3), the household is eligible to CalFresh.

To compute a budget manually, use the CalFresh Budget Worksheets DFA 285B for Change Reporting households, or the QR 285B for Quarterly Reporting households or the Scratch Budget.

Example

The household consists of a mother, child and an elderly grandmother. The grandmother purchases and prepares meals with her daughter and grandchild.  The total combined monthly unearned income is $2,121. The household pays $1,200 for rent and is entitled to the Standard Utility Allowance (SUA = $331).  The medical expenses are $235 per month, of which $200 is the medical deduction (the amount in excess of $35). The computation to determine benefits for the household is as follows:

Step

Action

The household is exempt from the gross income test (130% of FPL) due to the elderly/disabled member.

1

a.  Add the total monthly unearned income of all household members and

b.  Deduct the legal obligated child support paid ($2,121-$0):

$2,121

2

a.  Add the total gross earned income of all household members:

b.  Subtract the earned income deduction (20%) and

c.  Deduct any remaining obligated child support paid from 2b.

        0

3

Add total unearned income plus the adjusted gross earned income (Step 1 + Step 2)

        $2,121

 

a. Subtract the standard deduction:

    -$149

b. Subtract the excess medical expense:

    -$200

c. Subtract the monthly dependent care:

         -0

d. The homeless shelter deduction.

 

f. Adjusted Net Income

$1,772

5

Shelter Deduction Computation

 

a.

Rent:

$1,200

SUA:

$331

Total Shelter:

$1,531

b.

50% of the Adjusted Net Income

($1,772/2) = $886

c.

Subtract from the total shelter cost (a) 50% of Adjusted Net Income (b):

  $1531 - $886  

Allowable Shelter Deduction:

   $645

Net Income Computation

6

Subtract the excess shelter cost from the  adjusted net income:

$1,772

Deduction is not limited to the Maximum Shelter Deduction of $458 for households with Elderly/Disabled

  -$645

$1,127

Net Income

$1,127

7

The Net Income is below the maximum net income allowable of $1,591 for a household of 3 (from table in Section 63-1101.3).

x

 

63-254.4
Determining Eligibility and Benefits of Households That Include an Elderly or Disabled Member

To determine the eligibility and benefits of a household that includes a member who is elderly or disabled, the worker will apply only the net monthly income standards (net income eligibility test):

The worker shall apply the net monthly income eligibility test whenever the household reports a change in either income or household size.  The household’s continued eligibility for benefits will be based on the household’s new size and income information, which the household and the worker anticipate for the next issuance month.

·      If the household’s net monthly income does not exceed the standard, the worker will issue benefits.

·      If the household’s net monthly income exceeds the standard, the worker will either deny the application or terminate the household’s benefits.

Refer to Section 63-1104 to determine if an elderly or disabled household member living with others can qualify as a separate household.

 

63-254.5
Determining Eligibility and Benefits for QR Households with No Elderly or Disabled Members

For ongoing households subject to QR, which do not include an elderly or disabled member, the household’s continued eligibility for benefits will be based on the household’s size and income information, which the worker and the household anticipate for the QR Payment Quarter.  The worker will apply the gross and net monthly income eligibility standards to the QR Payment Quarter’s averaged income.

This determination will be based on the information reported on and submitted with the household’s most recent QR 7.  The worker should also consider information, which the household reports outside of the normal QR cycle. 

·      If the household’s net quarterly averaged income does not exceed the standard, the worker will issue benefits.

·      If the household’s net quarterly averaged income exceeds the standard, the worker will deny the application or terminate benefits at the end of the quarter.

·      If CalWORKs benefits are terminated mid-quarter based on income in excess of the Income Reporting Threshold (IRT) and income exceeds the household’s standards, a mid-quarter action will be taken to discontinue benefits and Transitional CalFresh will be issued.

Refer to Section 63-221.2 for additional information.

 

63-254.6
CalFresh Allotment Computation

CALFRESH ALLOTMENT TABLE

Change Reporting and QR household’s monthly allotment will be determined from the CalFresh Allotment Tables on the basis of household size and net income, as issued and updated by the United States Department of Agriculture (USDA).

The CalFresh Allotment Table is located in Section 63-1101.5.

DETERMINING ALLOTMENT LEVEL MANUALLY (without using the Allotment Table)

Step

Action

1

Determine the household’s total net income as explained in Section 63-254.2 and 63-254.3 above.

If the household is not categorically eligible, the monthly gross and/or net income, as explained in Section 63-221.1, must be within the income and eligibility allowable standards (Section 63-1101.3).

2

Determine the maximum allotment for the household size according to the CalFresh Maximum Allotment Table (Section 63-1101.2).

3

Multiply the net monthly income as determined in Step 1 by thirty percent (30%).  Round the product up to the next whole dollar if ending in 1-99 cents.

4

To obtain the CalFresh allotment, subtract the amount determined in Step #3 above from the maximum allotment for the household size in Sep 2.

·      If the computation results in $1, $3 or $5; round up to $2, $4 or $6 respectively (Section 63-254.7).

·      One or two person households which are Categorical Eligible (CE) will receive the minimum allotment amount.

·      If the allotment for the month of application results in less than $10 (after proration), the applicant will not receive benefits as explained in Section 63-251.2.

 EXAMPLE

Step

Action

1

The total net income of a household of four ($) is $275.

2

The maximum allotment for a household size of 4 (as of November 1, 2010) is $668.

3

Multiplying the net monthly by 30%: $725x30%=$217.5 rounded up to $218.

4

Subtracting the amount in #3 above ($218) from the maximum allotment for a household size of 4 ($668): $668-$218=$450.

DETERMINING ALLOTMENT LEVEL (using the CalFresh Allotment Table)

The monthly allotment could be determined using the CalFresh Allotment Tables located in Section 63-1101.5.

EXAMPLE

A CalFresh household of four (4) has a net monthly income of $725.  Under the “Monthly Net Income” column in the CalFresh Allotment Table (Section 63-1101.5) in page 7, find row 724 - 726.  The CalFresh allotment for 4 persons is $450.

 

63-254.7
Minimum Monthly Allotment

CalFresh minimum allotment: $15 effective 11/2013.

·          One and two-member households that pass the Net Income Test will receive at least the minimum monthly allotment.  Household that don’t pass the Net Income Test are not eligible for CalFresh.

CE and MCE households with one and two members will receive at least the minimum allotment even if they don’t pass the Net Income Test.

  • Three or more member households that pass the Net Income Test will receive an allotment as determined by their household size and net income according to the CalFresh Allotment Table (63-1101.5).  Household that don’t pass the Net Income Test are not eligible for CalFresh.

CE and MCE households with three or more members will receive an allotment as determined by their household size and net income according to the CalFresh Allotment Table (63-1101.5) even if they don’t pass the Net Income Test.  Refer to 63-254.6. 

However, if a household is entitled to zero benefit according to the CalFresh Allotment Table, the household will be denied or discontinued for exceeding the net income limits.  Exception: The case will not be denied if the household is CE or the zero benefit level is due to initial month proration.

See the “How to use the CalFresh Allotment Table” desk aid.

NOTE:

Do not issue benefits for the initial month if the minimum allotment is less than $10 (63-251.2).  However, if the household is entitled to benefits in subsequent months, certify the household beginning with the month of application (63-254.8).

Households with three or more members that are entitled to benefits for the initial month but not the following month will be certified for the initial month and discontinued the following month if the household is prospectively ineligible (63-254.8).

Ongoing household entitled to $1, $3, and $5 allotments will receive allotments of $2, $4, and $6 respectively.

 Refer to:

·         63-120 for CE and MCE information.

·         63-254.6, CalFresh Allotment Computation

·         63-254.10, Net Income Test Exceeds the Maximum Level.

 

63-254.8
Eligibility to Benefits during the Initial Application Months

Households with three or more members entitled to benefits for the initial month only, but not eligible to benefits the following month will be granted for the initial month and then discontinued the following month if the household is prospectively ineligible.

Households which are not entitled to benefits in their initial month of application but are entitled to benefits in the next month will be certified beginning with the month of application.

 

63- 254.9
Change in Household Circumstances and Income Eligibility Test

When household’s circumstances change and it becomes entitled to a different income eligibility test, apply the different test at the next recertification or whenever the household’s benefit are re-determined, whichever occurs first.

 

63- 254.10
Net Income Test Exceeds Maximum Levels at Application

The worker will deny the application of an otherwise eligible CR or (SAR) household with three or more members with a net income that would set its benefit level at zero. The application will be denied on the grounds that the net income exceeds the level at which benefits are issued unless the benefit level of zero is due to initial month proration (63-251.2).

Ongoing CE or MCE households of one or two members are entitled to a minimum allotment (63-254.7) even if their net income exceeds the Maximum Net Income limit.

Ongoing CE or MCE households of three or more members with a net income that would set its benefit level at zero will be denied or discontinued on the grounds that the net income exceeds the level at which benefits are issued.

Refer to 63-120 for CE and MCE information.