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CalWORKs
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44-111.23 Earned Income Disregards
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Purpose
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( ) To release a new policy
( ) To release a new form
( ) To convert existing policy to new writing style only – No concept changes
(X) Revision of existing policy and/or form(s)
What changed?
1. Effective June 1, 2022, the $550 Recipient Earned Income Disregard (EID) for CalWORKs participants will increase to $600. Eligibility staff will see the changes in May 2022, when Eligibility Determination/Benefit Calculation (EDBC) is run for June 2022.
2. Effective July 1, 2022, the Applicant EID for CalWORKs applicants will increase from $90 per each employed person to $450 per each employed person. Eligibility staff will see the changes in June 2022, when EDBC is run for July 2022.
Note: Changes are shown highlighted in grey throughout the document.
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Policy
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Recipient EIDs (Recipient Financial Eligibility Test)
Senate Bill (SB) 80 implements the following increases to the EID for CalWORKs participants:
1. Effective June 1, 2020, the EID increased from $225 to $500;
2. Effective June 1, 2021, the EID increased from $500 to $550; and
3. Effective June 1, 2022, the EID increased from $550 to $600.
The $600 and 50 percent Recipient EIDs are used to determine the Net Non-Exempt Income (NNI) that is used to determine the Assistance Unit’s (AU’s) Maximum Aid Payment (MAP). The NNI is calculated by disregarding the first $600 of disability-based unearned income and/or any earned income and 50 percent of any remaining earned income. If the AU has earned income only, the first $600 and 50 percent of the remaining earned income is disregarded when calculating the MAP. When the NNI is less than the MAP, the family is considered to have passed the Recipient Test.
Applicant EID (Applicant Financial Eligibility Test)
Effective July 1, 2022, Assembly Bill (AB) 135 increases the Applicant EID for CalWORKs applicants from $90 per each employed person to $450 per each employed person.
The $450 Applicant EID is used as part of the initial Financial Eligibility Test for applicant families. For all applicant families, the $450 (per each employed person) Applicant EID is deducted from the family’s monthly gross earned income. The remaining earned income amount plus any unearned income is compared to the Minimum Basic Standard of Adequate Care (MBSAC) for the family. If the remaining income is less than the MBSAC, then the family moves onto the Recipient EID Test where the recipient disregards will be applied.
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Background
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In 1997 when the legislature enacted the California Work Opportunity and Responsibility to Kids (CalWORKs) bill, one of the tenets was that work should pay. If we expect people getting public assistance to work, there should be an incentive and there should be supports for that work. They should not lose their grant dollar for dollar for what they earn. The mechanism for operationalizing that tenet is EIDs. This allowed working families to keep $225 and 50 percent of everything else as opposed to a system where they would lose more of their CalWORKs grant.
As the earnings go up the grant gradually comes down. During this time, the family can combine their earnings, their CalWORKs grant, and their work supports like transportation or childcare or to stabilize their housing situation, so that they could gradually move from receipt of aid to self-sufficiency rather than abruptly discontinuing them from the program (bridge versus cliff).
As a result of SB 80 (Chapter 27, Statutes of 2019), effective June 1, 2020, the CalWORKs $225 recipient disregard was increased to $500 and $50 thereafter for two consecutive years up to $600. Effective June 1, 2021, the CalWORKs recipient disregard was increased from $500 to $550. Effective June 1, 2022, the CalWORKs recipient disregard was increased from $550 to $600.
As a result of AB 135 (Chapter 85, Statutes of 2021), effective July 1, 2022, the CalWORKs Applicant EID will increase from $90 per each employed person to $450 per each employed person.
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Definitions
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Applicant Financial Eligibility Test
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Applicant families must pass the Applicant Financial Eligibility Test to be financially eligible for CalWORKs. As part of this process, the $450 Applicant EID (per each employed person) is deducted from the family’s monthly gross earned income. The remaining earned income amount plus any unearned income is compared to the MBSAC for the family.
1. If the remaining income is more than the MBSAC, then the family does not pass the Applicant Financial Eligibility Test and the CalWORKs application is denied.
2. If the remaining income is less than the MBSAC, then the family moves onto the Recipient EID Test where the recipient disregards will be applied. If the NNI is less than the MAP, the family is financially eligible for CalWORKs.
Refer to 44-212 Minimum Basic Standard of Adequate Care, and 44-315 CalWORKs Maximum Aid Payment Levels policies for additional detailed information regarding the MBSAC and MAP.
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Recipient Financial Eligibility Test
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Recipient families must pass the Recipient Financial Eligibility Test to be financially eligible for CalWORKs. As part of this process, the first $600 of disability-based unearned income and/or any earned income and 50 percent of any remaining earned income Recipient EIDs are used to determine the NNI for the family. The NNI is compared to the MAP for the family. When the NNI is less than the MAP, the family is considered to have passed the Recipient Financial Eligibility Test.
Refer to 44-212 Minimum Basic Standard of Adequate Care, and 44-315 CalWORKs Maximum Aid Payment Levels policies for additional detailed information regarding the MBSAC and MAP.
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Zero Basic Grant Case
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A month in which a case is active, but the family does not receive a CalWORKs payment, is considered a “Zero Basic Grant” (ZBG) month. ZBG months include the following:
1. Months when the grant was less than ten dollars, and there is no grant issued;
2. Months when the entire grant amount was kept as an Overpayment (OP) adjustment;
3. The grant amount is reduced to zero due to a combination of the family’s net countable income and a penalty; or
4. Effective June 1, 2020, there is a new ZBG population of cases that will remain active/approved although the net countable income exceeds the MAP. The case will remain active/approved so long as the family’s total gross income does not exceed the new Tier 2 Income Reporting Threshold (IRT). The intent of this new rule is to maintain the case in an approved status with a ZBG, so the family remains eligible for supportive services through Welfare-to-Work and eligible to other benefits such as homeless and recurring and non-recurring special need payments.
Refer to 44-315.8 Zero Basic Grant policy for additional information.
Cases with a ZBG month may be entitled to special needs and services provided they meet the specific need/service criteria. The cases:
1. Are not discontinued; and
2. Remain active at the ZBG level.
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IRT
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Under the Semi-Annual Reporting (SAR) and Annual Reporting/Child-Only (AR/CO) reporting systems, CalWORKs participants are required to report certain changes in their income or family circumstances mid-period. One mandatory report is when the AU’s total income reaches or exceeds the IRT. There are two tiers of the IRT under SAR and AR/CO reporting, the lowest of which will be the AU’s current IRT amount:
1. Tier 1 is 55 percent of the Federal Poverty Level (FPL) for a family of three, plus the amount of income last used to calculate the AU’s monthly grant amount; and
2. Effective June 1, 2020, Tier 2 is 130 percent of the FPL. The new Tier 2 IRT replaced the previous Tier 2 IRT that rendered a family ineligible when the countable income exceeded the MAP for the AU size.
Effective June 1, 2020, cases that exceed the MAP will no longer be discontinued. Instead, the cases will remain active (approved) as a ZBG case until the family’s gross income exceeds the new Tier 2 IRT, or 130 percent of the FPL.
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MBSAC
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The MBSAC is the amount necessary to provide an AU with the following: housing; clothing; food; utilities; items for household operation, education, incidentals, recreation, personal needs, and insurance; and essential medical/dental or other remedial care not otherwise provided at public expense.
The MBSAC is used in the Applicant Financial Eligibility Test and is also applied to the period of ineligibility for non-qualifying withdrawals from CalWORKs restricted accounts.
The MBSAC is set by California State law and is based on the size of the applicant family. The amounts are used as a measure of neediness and not the amount of cash aid a family may receive. CalWORKs payments are based on MAP levels.
Refer to 44-212 Minimum Basic Standard of Adequate Care policy for additional information.
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AU MAP
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CalWORKs/Refugee Cash Assistance (RCA) participants receive their grants based on Exempt (higher) or Non-Exempt MAP. An AU receives the Exempt MAP when each parent, aided stepparent, caretaker relative, Pregnant Woman Only, or adult in an RCA case receives one of the following benefits:
1. Supplemental Security Income/State Supplementary Payments;
2. In-Home Supportive Services;
3. State Disability Insurance (SDI);
4. Temporary Workers’ Compensation; or
5. Temporary Disability Indemnity.
In addition, the AU receives the Exempt MAP when it includes an unaided (non-needy) non-parent caretaker. All other participants receive the Non-Exempt MAP. The MAP increase is considered a County-Initiated mid-period action.
When there is disability-based unearned income or earned income, the $600 (effective June 1, 2022) and 50 percent Recipient EIDs are used to determine the NNI that is used to determine the AU MAP. The NNI is calculated by disregarding the first $600 of disability-based unearned income and/or any earned income and 50 percent of any remaining earned income. If the AU has earned income only, the first $600 and 50 percent of the remaining earned income is disregarded when calculating the MAP. If the family has unearned income, it is counted dollar for dollar towards the MAP.
If the NNI is more than the MAP, the family is not eligible for a CalWORKs grant. The AU MAP includes those individuals who are aided.
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Family MAP
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The family MAP size includes:
1. AU members;
2. Non-AU members; and
3. Excluded family members.
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Requirements
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N/A
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Verification Documents
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N/A
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