Budgeting Concepts

Eligibility must be determined prospectively for all households in order to ensure the household is still within limits for ALL factors of eligibility.

• Semi-Annual Reporting
  • Refer to Semi-Annual Reporting Requirements for detailed information.

Prospective Budgeting for Semi-Annual Reporting Households

Eligibility

Prospective eligibility for a SAR household means:

• The determination of a household’s eligibility for the SAR Payment Period.
• Based on the resource and household composition as follows:
  • Applicants: By using information reported on the application form.
  • Recipients: By using information reported on the SAR 7 or RC forms.
• Based on an estimate of a household’s income and expenses which will exist in the SAR Payment Period.

Budgeting

Prospective budgeting for a Semi-Annual Reporting household means the computation of a household's CalFresh allotment for the SAR Payment Period based on an estimate of income and expenses which will exist in the certification period. Benefits for the SAR Payment Period are determined using prospective budgeting, reasonably anticipated income and income-averaging rules.

Income and household information from the SAR Data Month, as well as anticipated changes in income and expenses must be used when determining continuing eligibility and benefit levels.

Reasonably Anticipated Income

Income is “reasonably anticipated” when the worker determines it is reasonably certain that the recipient will receive a specified amount of income during any month of the certification period. This definition applies to all types of income, earned or unearned.

Under SAR, recipients are required to provide information for the Data Month and any anticipated changes in the six months following the Submit Month. The income received in the Data Month will be considered reasonably anticipated and will be used in the budget calculation unless the recipient reports that they anticipate a change in the upcoming SAR Period.

If a household anticipates receipt of new income from a new source in the upcoming SAR Payment Period, such as a new job or UI benefits, this income must only be considered reasonably anticipated if the worker determines that:

• The household verifies that the income has been or will be approved or authorized within the upcoming SAR period, or the household is otherwise reasonably certain that the income will be received within the SAR period; AND
• The anticipated amount of the income is known and verified, or the household is otherwise reasonably certain of the amount of the income; and
• The start date of the income is known and verified, or the household is otherwise reasonably certain of the start date of the income.

If the household’s monthly income fluctuates or they expect the income received in the Data Month to change in the upcoming SAR Payment Period, the worker must attempt to find out the amount of income the household reasonably expects to receive, in order to determine what income, if any, can be reasonably anticipated and used in the next SAR Payment Period’s benefit calculation. Only that portion of income that the AU/household reasonably anticipates it will receive can be used in the benefit calculation. If, for example, a recipient has fluctuating income, but agrees that she usually makes at least a minimum of $200 a month, the minimum anticipated income can be anticipated. If however, a recipient can’t anticipate an amount or if she will get paid in the upcoming semi-annual period, then no income can be reasonably anticipated.

ExampleExample

EWs will be required to make a determination of what income is reasonably anticipated when:

• A household first applies for benefits;
• A recipient household reports new income on the SAR 7 or RC forms;
• A recipient household reports on the SAR 7 that income is expected to change;
• A recipient household has income that fluctuates; and
• A recipient makes a mid-period report of an income change.

Guidelines

The following are guidelines to determine income that is reasonably anticipated by the household. They include but are not limited to the following actions:

• Take into account income that the household reports/estimates (mid-period or on the SAR 7) as being reasonably anticipated for the upcoming SAR Payment Period.
• If the household is unable to provide an estimate of anticipated income on the SAR 7, the recipient may be contacted for additional information.
• If the household is unable to estimate future income with the assistance of the worker, the employer or source of the income may be contacted with authorization from the recipient.
• If unable to obtain additional source information, take into account past income received by the household as an indicator of income to expect over the next semi-annual period.
• For seasonally fluctuating income, a review of the employment history over a longer period of time can be used if it will provide a more accurate indication of fluctuations in future income.
• If changes in income have occurred or can be anticipated, past income cannot be used as an indicator of anticipated income for the period.
• A new source of income, such as a new job, cannot be anticipated if it is uncertain when the job will start or what amount the recipient will be paid.

Note: Changes must be clearly documented on the Maintain Case Comments window.

PA Grant [63-509(h)(3)(B)]

For households that receive a CalWORKs grant, the actual CalWORKs grant amount for each month must be used when computing CalFresh benefits. The CalWORKs grant is NOT averaged. The following rules apply to PA grants:

• When a joint CalWORKs and CalFresh application is taken and Public Assistance eligibility is pending, if CalWORKs is granted after CalFresh has been paid, the new CalWORKs income must be used to recompute CalFresh benefits mid-period for the remainder of the period. This is considered a County-Initiated Action.
  • ExampleExample

    Household (HH) of three applies for CalWORKs and CalFresh on May 6th. Expedited CalFresh are issued on May 10th. CalWORKs application approval pending receipt of verification of motor vehicle encumbrance. On May 14th, the car loan balance statement is received and CalWORKs benefits approved. CalWORKs grant for June is $704.The CalFresh budget for June and continuing must be revised to include the $704 CalWORKs grant.

• When a currently certified CalFresh household applies for CalWORKs, CalFresh benefits MUST be decreased mid-period with the 10 day notice due to the approval of CalWORKs.
  • ExampleExample

    The CalFresh HH applies for CalWORKs on 5/29. The client is not seen for an intake CW appointment until 7/3. The CW grant will be used effective the first month of the current period, August.

• When processing a mid-period change on a joint CalWORKs/CalFresh case, use the total CalWORKs grant (i.e., the original grant plus the supplement) in determining CalFresh benefit entitlement (i.e., will CalFresh benefits increase or decrease due to the reported change).

ExampleExample

Cash Grant Reductions

Failure to Comply

When a federal, state or local public assistance/welfare program’s cash aid (i.e. CalWORKs, GA, RCA, Foster Care, etc.) is reduced due to a failure to comply with a program requirement which occurred on or after February 1, 1997, the CalFresh benefits must NOT be increased due to this cash aid reduction.

For detailed information on Failure to Comply, refer to Failure to Comply - Overview.

Fraud [63-503.5]

When a cash grant payment is reduced for a fraud recoupment due to intentional noncompliance, calculate CalFresh benefits using the cash grant amount that the household WOULD have been issued if the fraud overpayment recoupment had not occurred. Intentional noncompliance can only be found where there has been both prosecution for fraud AND a guilty verdict, whether by plea or findings of a trial. IEVS will notify the EW by memo when a guilty verdict is found on a case.

ExampleExample

Conversion Factors

Weekly or bi-weekly income received by a Semi-Annual Reporting household which meets specific criteria is converted to a monthly amount by using a conversion factor of:

• 4.33 for weekly payments, and
• 2.167 for bi-weekly payments.

Use of the Weekly or Bi-Weekly Conversion Factors

The conversion factors (4.33 and 2.167) can be used when:

• Income is received on a weekly or bi-weekly basis, AND
• Payments are expected to be received for each week or for every other week for the entire upcoming SAR Payment Period, AND
• The household indicates on the SAR 7 that no change in income is anticipated in the upcoming payment period compared to the Data Month income, AND
• There is no evidence to the contrary.

Note: Differences in the amount of the paychecks due to the normal variation in the individual’s work hours are not considered a change in income.

For income received on a weekly or bi-weekly basis and the amount of each payment is:

• The same, the weekly or bi-weekly amount must be multiplied by 4.33 or 2.167 respectively to determine a monthly figure.
  
  Note: The conversion process is only required for manual budget calculations.
  • ExampleExample

    A recipient reports receiving $200 every week and reasonably anticipates that this income will continue at the same amount for the upcoming semi-annual period. The $200 weekly income is multiplied by the weekly multiplier of 4.33 to determine the monthly average income amount of $866. (If the recipient reports receiving $400 every two weeks, the $400 bi-weekly income is multiplied by the bi-weekly multiplier of 2.167 to determine the monthly average income amount of $866.)

• Not the same, add together each weekly or bi-weekly payment reported on the SAR 7, divide that total by the number of payments received in the Data Month and then multiply that amount by 4.33 for weekly payments or 2.167 for bi-weekly payments to arrive at the monthly income amount for the next SAR Payment Period.
  • ExampleExample

    A recipient reports on her SAR 7 that four weekly paychecks were received in the following amounts: $115, $100, $135, and $95 and indicates on the SAR 7 that her income is not expected to change during the next SAR Payment Period. The worker will add the four weeks of income together, divide by four and then multiply the resulting amount by 4.33 to arrive at the averaged monthly income amount for the next SAR Payment Period (i.e.: $115 + $100 + $135 + $95 = $445 / 4 = $111.25 x 4.33 = $481.71). (If five pay checks were reported in the Data Month on the SAR 7, the worker will add each check together, divide by five, and then multiply the resulting amount by 4.33.)

  • ExampleExample

    A recipient provides two check stubs in the amount of $115 and $350 and states that he gets paid bi-weekly. He expects this income amount and frequency to continue. The worker will add the two checks together, divide by two and then multiply the resulting amount by 2.167 to arrive at the average monthly income amount for the next SAR Payment Period (i.e.: $115 + $350 = $465 / 2 =$232.5 x 2.167 = $503.81).

  • ExampleExample

    A recipient reports on her SAR 7 that she received four weekly paychecks in the following amounts: $200, $450, $190, and $225. She explains that she received extra hours in the second week of the month because a co-worker was sick, but the other three weekly paychecks are typical and she expects this income to continue. The worker should disregard the anomalous check of $450, and convert the remaining three weekly paychecks into a monthly amount by adding them together, dividing by three, and multiplying the weekly average by 4.33 (i.e.: $200 + $190 + $225 = $615 / 3 = $205. $205 x 4.33 = $887). The reason for disregarding the anomalous check must be documented in the case narrative.

 

When the Conversion Factor Can NOT be Used

If the household receives weekly or bi-weekly paychecks, but their income fluctuates month to month and they cannot reasonably anticipate that their Data Month income will continue at the same amount, the conversion multipliers will not be used to convert the Data Month income into a monthly average. In this case, the worker should accept the household’s estimate of reasonably anticipated income or when that estimate is questionable, contact the household to determine what monthly income (if any) can be reasonably anticipated.

ExampleExample

Benefit Determination Based on Stable Income

If a recipient or applicant household has stable monthly income and does not expect any changes in the upcoming SAR Payment Period, the income reported on the application, SAR 7 or RC forms shall be used to determine the benefit amount for the next SAR Payment Period. If the stable income is received weekly or bi-weekly the income shall be converted into a monthly average as described above.

Fluctuating Income

Income is considered to be fluctuating when the amount of income and its payment frequency is different for each month of the certification period. This includes when the household has income for one or more months of the certification period and zero income for the remaining months of the certification period due to income starting or stopping. It also includes continuing income that changes from month to month.

If the household receives weekly or bi-weekly paychecks, but their income fluctuates month to month and they cannot reasonably anticipate that their Data Month income will continue at the same amount, the conversion multipliers will not be used to convert the Data Month income into a monthly average. In this case, the county should accept the household’s estimate of reasonably anticipated income or when that estimate is questionable, contact the household to determine what monthly income (if any) can be reasonably anticipated.

When the household reports anticipating fluctuations from their Data Month income, the determination of whether income is reasonably anticipated will require additional steps and thorough case documentation. In situations where the recipient expects a change or has fluctuating income, and either cannot or does not provide an estimate of what is reasonably anticipated, the following guidelines can be helpful to the worker in working with the recipient to determine what income, if any, can be reasonably anticipated for the upcoming semi-annual period:

• Take into account any changes in income from the Data Month that the household reasonably anticipates for the upcoming SAR Payment Period.
• If the household reports that they expect changes from the income received in the Data Month, but do not know how much their income will change or when the changes will take place, Data Month income shall be used until the recipient reports a reasonably anticipated change.
• If the household reports that their income fluctuates significantly month to month that they cannot reasonably anticipate any income, and that in some months they don’t receive any income, barring any information to the contrary, the county should accept this statement and no income should be budgeted.
• If the household is unable to estimate future income with the worker’s assistance, the county, with written authorization from the recipient, may contact the employer or other source of income.
• If unable to obtain additional source information, the county may take into account past income received by the household to determine whether or not the Data Month income is representative of the household’s typical pay.
  • For CalWORKs and CalFresh, if income fluctuates to the extent that a 30-day period alone cannot provide an accurate projection of future income, the worker may look back to the prior semi-annual period for historical income information.
  • For CalFresh purposes, if the household’s income fluctuates seasonally, it may be appropriate to use the most recent season comparable to the certification period, rather than the last semi-annual period.

Note: Past income shall not be used as an indicator of anticipated income for the SAR Payment Period if changes in income have occurred or are anticipated.

Contract or Self-Employment Income

Households which, by contract or self-employment, derive their annual income in a period of time shorter than one year shall have that income averaged over the certification period, provided the income from the contract is not received on an hourly or piecework basis. These households may include school employees, sharecroppers, farmers, and other self-employed households. However, these provisions do not apply to migrant or seasonal farm workers. Contract income which is not a household’s annual income and is not paid on an hourly or piecework basis shall be prorated over the certification period.

Note: CalWORKs does not have special rules for the treatment of income for AU’s that derive their annual income in a period of time shorter than one year; however, in order to align with CalFresh, CalWORKs cases that are also receiving CalFresh will follow the budgeting rules explained above. Those recipients that are receiving CalWORKs only shall have their income calculated for the upcoming semi-annual period in accordance with prospective budgeting and reasonably anticipated income, as explained in this section.

ExampleExample

Starting or Ending Income Mid-Period

Income that is starting or ending mid-period will no longer be averaged over every month of the Payment Period. Income that the recipient anticipates will begin or end in one of the months of the upcoming SAR Payment Period will only be counted in the months that the income is reasonably anticipated to be received. This is a change from QR/PB and will allow a household to receive the maximum benefit amount in the months in which this income is not received. This rule also apply to intake cases; income from the month of application will only be used to determine eligibility and benefit amount in the month in which it was received.

Income that is beginning or ending will be treated differently depending on how certain the household is that the income will begin or end. If the household is certain that their income will be ending or new income will be starting in a certain month of the SAR Payment Period, this income will only be used to determine benefit amounts for the months in which it is reasonably anticipated to be received. In these situations, the county must calculate two different benefit levels for the semi-annual period: one benefit amount for the months in which the income will be received and one benefit amount for the months in which the income will not be received.

ExampleExample

ExampleExample

Basic Concepts to Apply Mid-Period Changes

• When the change results in increased benefits mid-period, benefits must be recalculated for the month of report or month of change, whichever is later, and the remaining months of the period using the new income that the household reasonably expects to receive.
  • ExampleExample

    Recipient received her last UIB on August 27. She reports this to her EW on September 3. September CalFresh budget is recalculated to determine whether the HH is entitled to a supplement.

  • ExampleExample

    Recipient calls EW on August 27 to report that she will receive her final UIB check on September 3. Since the change will not occur until September, only the September and ongoing CalFresh budgets can be recalculated to determine whether the HH is entitled to a supplement.

• A recomputation for the period CANNOT be done if the information has already been taken into consideration in setting up the SAR Payment Period.
  • ExampleExample

    A recipient works at a school cafeteria from the middle of September to the middle of June. Her annual income of $7,200 was converted into the monthly average of $600 at the last RC and used over the certification period, February through January. Client submits June SAR 7 in July and reports that her job ended in the middle of June. She also anticipates her job to resume in the middle of September.

    Since the reported change has already been taken into consideration when calculating the current allotment, worker must not act on the report of “decreased” income.

• When an HH consists of two or more members with income, and one of them experiences a decrease in income, that person’s income is recalculated. The income of a person(s) who did not experience a decrease in income is NOT recalculated. The new benefits are based on the new average income of the person who experienced the change and the existing average income of the person(s) who did not experience a change.
• When an HH member has income from two or more sources of income and voluntarily reports a decrease of income from one of the sources, only that income source that experienced the decrease will be recalculated. The new benefit is based on the existing averaged income from the source of income that did not change and the newly averaged income from the source of income that did change.
• When an HH reports a mid-period change and verification is required, the EW must request verification in writing. If the HH:
  • Provides verification timely (within 10 days of the request); even if the verification is provided in the following month, then the HH is entitled to have benefits recomputed for the month in which the change was reported to determine if a supplement will be issued.
    • ExampleExample

      HH reports on June 28 that the mother was laid off from her job on June 16. A statement from the employer is submitted on July 2. Since the verification was received timely, the June CalFresh budget must be recomputed to determine if the HH is entitled to a supplement for June.

• If the HH provides verification after the 10-day period, the date the verification is provided is considered the date of a new voluntary report. The month in which the verification was received and the remaining months of the period can be supplemented.
  • ExampleExample

    HH reports on June 28 that the mother was laid off from her job on June 16. On July 12 a “No Change” NOA is sent to the HH. The HH submits a statement from the employer on July 22. This is now considered a new mid-period report and the current month (July) can be supplemented.

EW Responsibility

The EW is responsible for computing the amount of benefits and recording accurate documentation in the Maintain Case Comments window when:

• Benefits are granted or restored.
• A recertification is completed.
• A Change Reporting household reports a change.
• A household makes a mandatory mid-period report.
• A household makes a voluntary mid-period report.
• A household submits a SAR 7.
• A county-initiated change is required.

The EW is also responsible for evaluating reported information to see if all the facts add up to a reasonable household situation.

Related Topics

Benefit Computation