63-604      Income (Q&A)

 

Table of Contents

 

Subject

Question/Answer

Casino Disbursements

·   Treatment of Casino Disbursements as Unearned Income to Tribal Members

·   Casino Disbursement/Food Allowance

Disaster Relief Income and/or Assistance

·   Disaster Relief Employment Income

·   Disaster Relief Unemployment Assistance

Paid Family Leave

Treatment of Paid Family Leave Income

Ross Grant Payments

Treatment of Ross Grant Payments

Self-Employment Income

·   Determination of Room Rental Actual Expenses

·   Claiming Shelter Expenses as Business Expenses and Shelter Deduction

Treatment of Transitional Youth Assistance Programs

Treatment of the Transitional Housing Program-Plus (THP-PLUS)

Transitional Age Youth (TAY) Program aka Transitional Program

Vendor Payments

·   Vendor Payment and/or Loan and Shelter Deduction

·   Vendor Payment or Income and Shelter Deduction

Work Study Grants

Treatment of Work Study Grants

 

 

Casino Disbursements

QUESTION 1

Should casino disbursement proceeds up to $2,000 a calendar year per individual be excluded as income under Section 63-226.9 (MPP 63-506(b)(8))?

ANSWER 1

Yes, if the worker determines that the casino’s income disbursements are from interest on legal shares to the individual client in trust or restricted land.  If so, the first $2,000 income per calendar year is excluded, and any funds which exceed the $2,000 in a calendar year are counted as unearned income in the month in which it is received according to Sections 63-229.6 and 63-223.8.

QUESTION 2

Should we be treating the total casino disbursements as unearned income?

ANSWER 2

If casino disbursements are a direct result of interest paid to the individual from a trust or interest in restricted land, pursuant to Section 63-226.9, the income is treated as unearned income after the first $2,000 is excluded per calendar year.  This exclusion applies to each individual household member who holds an interest or legal shares.

QUESTION 3

How can the worker determine how income should be treated under Public Law?

ANSWER 3

MPP 63-506(b)(8) is composed of three Public Laws (P.L.): P. L. 93-134, P. L. 97-458, and P. L.103-66, Section 13736, that provides certain types of payments made to tribal members are exempt from income and resources.

·         P. L. 93-134 authorized per capita distribution of payments to tribal members due judgment funds held by the Secretary of the Interior. 

·         P. L. 97-458 mandated distribution payments are exempted as income and resources and initial purchases exempted as resources.

·         Section 13736 of P. L. 103-66 excludes the first $2,000 distributed payment per calendar year.

Treatment of this income on a statewide basis is derived from MPP 63-506(b)(8), which includes the directives of these Public Laws.  The client should supply verification of the source of the income.  The worker will contact the client’s tribe to obtain information needed to verify the type of issued disbursement.

NOTE:  The $2,000 annual exemption applies to tribal members only.

ACIN I-34-05

 

Casino Disbursement/ Food Allowance

A Band of Native Americans received a $200 food allowance instead of a per capita payment from casino earnings.  The check stub for the food allowance has a statement: “non gaming revenue.”  The letter the household received states: “This letter shall serve as notification that Coyote Valley Band of Pomo Indians did not distribute per capita payments to its members for the month of August, and shall be advised there will be no per capita distributions for the next 2 months.

Members did receive a $200 food allowance for the month of August and will continue to receive the $200 food allowance for the next 2 months.”

Question:

How is this payment treated; excluded as a casino per capita payment or as income? Also, are households not eligible for CalFresh due to duplicate participation in food programs if they receive a food allowance?

Answer

The food allowance is not considered a per capita casino disbursement. It will be treated as unearned income in determining the CalFresh allotment if the food allowance is not considered duplicated participation as in this circumstance. Section 63-223.

ACIN I-84-09

 

Disaster Relief Employment Income

QUESTION

How is disaster relief employment income received during a nationally declared disaster treated in CalFresh?

ANSWER

The income earned from disaster relief employment is excluded from CalFresh eligibility and benefit level determination as provided in Section 63-225.5.  The worker can verify whether the source of the income is from a National Emergency Grant under the Workforce Investment Act by contacting their local Workforce Investment Area office.  The source of the income should be verified if the client suffered a job loss or was unemployed due to a recent disaster, if the employment is deemed temporary (less than six months), and if the type of work is disaster-related.

ACIN I-34-05

 

Disaster Relief Unemployment Assistance

QUESTION

How is disaster relief unemployment income received during a nationally declared disaster treated in CalFresh?

ANSWER

The unemployment assistance income earned from disaster employment is excluded from CalFresh eligibility and benefit level determination as provided in Section 63-225.11.  The worker needs only to verify the source of income if the client suffered job loss or endured unemployment due to a recent disaster.  Disaster unemployment payments are limited to 26 weeks.  This income can be verified through the MEDS on-line system that is used to determine existing or potential unemployment benefit payment and emergency need cases.

ACIN I-34-05

 

Treatment of Paid Family Leave Income

QUESTION

How is Paid Family Leave (PFL) income treated?

ANSWER

Based on PFL law, to qualify for PFL compensation, an individual must be covered by State Disability Insurance (SDI) or a voluntary plan in lieu of SDI, and have earned at least $300 from which deductions were withheld.  Prior to the individual receiving PFL, an employee has the option to take up to two weeks vacation or sick leave.  If this occurs, the vacation leave payments or sick leave would be considered earned income.  All PFL payments linked to SDI accounts are considered unearned income as provided in Section 63-223.3.

ACIN I-16-05

 

Treatment of Ross Grant Payments

A CalFresh participant receives income from the Resident Opportunity and Self Sufficiency (ROSS) grant program under the U.S. Department of Housing and Urban Development (HUD).  The ROSS program is designed to provide on-site case management services for individuals who are elderly or experience permanent disabilities.  The goal of this program is to enable elderly and/or disabled residents to remain independent in their homes as long as possible.

QUESTION

Do ROSS grant payments qualify as income exclusions?

ANSWER

No.  Per Section 63-224, grant payments do not qualify as income exclusions.

Section 223.2 states that assistance payments from programs which require, as a condition of eligibility, the actual performance of work without compensation other than the assistance payments themselves, will be considered unearned income.  If the CalFresh recipient is participating in a work-training program and is being paid a salary, the salary would be counted as earned income (Section 63-222.3).

ACIN I-91-06

 

Determination of Room Rental Actual Expenses

An applicant applies for CalFresh for herself as a one-person household.  She owns her own home and rents out three of the home’s four bedrooms.  One bedroom is occupied by a couple and the other two bedrooms by single roommates.  Everyone has equal access to the three common rooms. No meals are provided; each person purchases and prepares his or her own meals.  The applicant is not engaged 20 hours per week in managing the property.

·         She rents each room for $200 per month;

·         Shelter costs total $1000 per month ($800 interest, taxes, and insurance and $200 principal).

QUESTION

Would the income on the rentals be considered earned or unearned?

What percentage of the applicant’s mortgage, interest, taxes, and insurance should be allowed as the “cost of doing business?”

ANSWER

Because room rental is considered self-employment, income received from room rental would be treated as earned income in the CalFresh budget as specified in Section 63-222.2.   The “20 hours a week management” provision does not apply to a room rental situation; it applies only to management of rental property.

To determine the cost of doing business (if the household chooses actual expenses instead of the standard deduction of 40% of gross income), the worker has the option to calculate either by the square footage of the home or by the number of rooms.

BY SQUARE FOOTAGE

Let’s assume the square footage of the home is 1,000 square feet, of which 300 square feet is rented out, and that the applicant requests actual costs of doing business as self-employment expenses (instead of the 40%):

Step

Description

Computation

1

Determine total income from rental property

3X$200=$600

2

Determine the square footage of the home

1,000

3

Determine the square footage of the rooms rented out (not including common rooms (e.g., living room, etc)

300

4

Determine the percentage of the rented out rooms

300/1000=1/3=33%

5

Determine the percentage of the allowable expenses

33% of $1000=$333

6

Determine the net self-employment income

$600-$333=$267

Next, allow the 20% earned income deduction and other deductions as necessary.

BY NUMBER OF ROOMS

Let’s assume the applicant requests actual costs of doing business as self-employment expenses (instead of the 40%):

Step

Description

Computation

1

Determine total income from rental property

3X$200=$600

2

Determine the number of rooms

7

3

Determine the number of rooms rented out

3

4

Determine the percentage of the rented out rooms (not including common rooms (e.g., living room, family room, etc)

3/7=0.43=43%

5

Determine the percentage of the allowable housing costs (Refer to Section 63-235.2)

43% of $1,000=$430

6

Determine the net self-employment income

$600-$430=$170

 Next, allow the 20% earned income deduction and other deductions as necessary.

ACIN I-03-02

Claiming Shelter Expenses as Business Expenses and Shelter Deduction

The applicant is self-employed as an acupuncturist and works out of her residence.  She is renting a house and shares rent and utilities with a roommate.  She claims part of her share of the rent as business expenses.

QUESTION

Can these business expenses be allowed, as well as her full share of rent and utilities as a shelter deduction?

ANSWER

The applicant cannot claim a portion of her share of rent and utilities as business expenses, as well as claiming her full share of rent and utilities as a shelter deduction. 

However, she can claim part of her share of rent as business expenses, and the remainder would be allowed as a shelter deduction.  Refer to Q&A “Determination of Room Rental Actual Expenses” (above) to determine net self-employment income.

ACIN I-03-02

Treatment of the Transitional Housing Program-Plus (TCH-PLUS)

BACKGROUND

The THP-Plus is a transitional housing placement opportunity for emancipated foster youth, aged 18-24, who are emancipated from the child welfare system.  The goal of the program is to provide a safe living environment while helping youth achieve self-sufficiency so that they can learn life skills upon leaving the foster care support system.

QUESTION

How is CalFresh calculated, when considering the monies received from the THP-Plus program?

a)    The payment is a set amount for those who qualify regardless of any other income.  The funds are given to an outside agency that administers the program for the county and works with the youth.

b)    A set amount goes into an Emancipation Fund account which cannot be accessed until the youth is out of the program.  A budget is set up for the child’s living expenses and varies based on the child’s needs which also includes discretionary funds.  These funds will also pay the housing expenses for a child that is either living on their own or living in a group home environment.

ANSWER

The money put into the Emancipation Fund is excluded as a resource.  The money paid directly to a third party for housing will be considered income in-kind and therefore the child’s living expenses would not be allowed.  Money made available to the youth whether spent, held or put into personal savings would be considered unearned income in the month received for the CalFresh budget.  Section 63-223.11.

ACIN I-54-09 and Errata

 

Transitional Age Youth (TAY) Program aka RCS Transition Program

The Transitional Age Youth (TAY) Program aka “RCS Transition Program” provides financial, housing and life skills assistance.  The funding for the program is through the Mental Health Services Act and is under Proposition 63.

The monthly income for a single person is as follows:

$ 225 food and household

$ 30 transportation

$ 30 personal use

$ 15 entertainment

$ 125 utilities

$ 25 telephone

$ 25 clothing & laundry

$ 50 savings

Total $ 525 monthly income

Question

How do we treat the $225 that includes, in part, a food stipend?  Is the person not eligible for CalFresh due to receipt of the food allowance?

Answer

This payment is treated as unearned income.  TAY is paid as a benefit based on need and the individual is eligible for CalFresh benefits, if otherwise eligible.  Section 63-232.2.

ACIN I-84-09

 

Vendor Payment or Income and Shelter Deduction

QUESTION 1

As part of the divorce agreement, the judge has ordered that the absent parent pay the mortgage payment directly to the bank each month (the combined amount includes both taxes and insurance).  In addition, the absent parent has been ordered to give the client $200 per month in direct child support.  In this situation is the non-assistance CalFresh household allowed a shelter deduction?  Is the only income counted to the household the $200 per month direct child support?

ANSWER 1

The payment to the mortgage company would be considered a vendor payment because it is legally obligated to the mortgage company by the court order and is not otherwise payable to the household. Therefore, the household in the above example would not be entitled to a shelter deduction per Section 63-253.11.  The $200 a month in direct child support would be counted as unearned income to the household per Section 63-223.6.

QUESTION 2

An absent parent is ordered by the court to pay $1,000 monthly to his ex-spouse and two children.  The client and her spouse decided that it would be easier if he paid the $750 monthly rent and gave her the remaining $250 per month.  In this situation, since there is no court order for this arrangement is the full $1,000 counted as income to the CalFresh household and is the household allowed the shelter deduction of $750?

ANSWER 2

Because the payment is legally obligated and otherwise payable to the household, it must be counted as unearned income.  Because the spouse is legally obligated to pay the money to the household and is not required to pay the rent, the household would also be entitled to the shelter deduction.

ACIN I-34-04

 

Vendor Payment and/or Loan and Shelter Deduction

The household’s monthly rent is $700; however, the father (who resides elsewhere) pays half of the rent directly to the landlord.  The participant completed an affidavit stating that the father loans her the money and has no plan of repayment.

QUESTION

Should the money be treated as a loan or a vendor payment?

ANSWER

In this case, half of the rent is paid by a person outside of the household (the father), and it is an expense that he is not legally obligated to pay and therefore it is (vendor) excluded as income.

The client signed an affidavit stating that the income the landlord is receiving is from her father as a loan.  The affidavit was not signed by both parties and did not include a repayment agreement.  Because of this, in addition to the fact that Section 63-117.20 refers to these as “recurring payments,” the payments are not considered a loan.  Since the payments are being made straight to the landlord without the household ever receiving it, the payments will be considered excluded (non-obligated) vendor payments.  The household would only receive $350 shelter deduction, which is the portion of rent they are paying.

ACIN I-73-04

 

Treatment of Work Study Grants

A household member receives a Federal Work Study Grant. The grant award letter stated that the work study amount is $4000.  The household member has earned the $4000 and continues to work.  The grant disbursements are currently suspended because she has two incomplete classes; withheld until classes are completed.

QUESTION 1

Now that the work study allotted in the award letter has been earned (met), do we count the continued income in the CalFresh budget?

ANSWER 1

Yes. Additional hours are counted as income. The household member has earned the $4000 allotted in the grant, so all additional hours will count as income. Per Section 63-222.2, earned income will include but not be limited to work study income, which has not been excluded by federal statute, or through application of allowable exclusions.

QUESTION 2

Does the Federal Work Study continue to be exempt while the disbursements are suspended?

ANSWER 2

Yes.  Federal Work Study income continues to be exempt while disbursements are withheld because the household member needs to complete two classes.  She continues to be eligible to the grants that were awarded under Title IV.

ACIN I-52-06