Annual Reporting/Child Only (AR/CO) Cases

Senate Bill 1041 requires the implementation of Annual Reporting provisions for certain CalWORKs Child Only cases.The case is an AR/CO case when all adults in the CalWORKs AU are not eligible for or receiving CalWORKs for themselves due to any of the following reasons:

• Timed out (i.e. Safety Net cases)
• Excluded from the AU because of fleeing felon status or has been found by a court to be in violation of probation or parole
• Immigration status
• Receiving SSI
• Non-Needy Caretaker Relative
• Sanctioned due to refusal to assign child/spousal support rights
• Convicted of an IPV prior to July 1988
• Has not met the SSN requirements, or
• Is a striker and ineligible for CalWORKs for him/herself.

Exception: In general, when there is no aided adult in the AU, the case is an AR/CO case, with the exception of an adult who has been sanctioned due to non-compliance with WTW requirements. The WTW exception from AR/CO rules is meant to allow counties to continue helping clients achieve self-sufficiency by maintaining more frequent contact with the client, rather than reducing contact to once per year.

Prospective Budgeting

Under AR/CO, counties are required to use prospective budgeting rules for determining continuing benefits. These rules have been simplified from the SAR budgeting rules (that require averaging income to determine a monthly grant amount over a three month period). Prospective budgeting requires counties to use current income information obtained at application or redetermination as well as any changes in income that the applicant or recipient anticipates with reasonable certainty in the upcoming annual period. The income reported on the SAWS 2 Plus 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 AR/CO period.

Reminder: It is critical that staff thoroughly document in the Journal Detail page of CalSAWS, indicating how income was projected in determining benefit calculations.

The AR/CO Payment Period is the twelve month period for which cash aid is paid/issued. The AR/CO Submit Month is the month in which the recipient reports all information necessary to determine eligibility and is the twelfth month of the AR/CO Payment Period. The AR/CO Reporting Period is the AR/CO Submit Month and the eleven preceding months, it is generally the period of time since the last SAWS 2 Plus was completed and submitted.

The following table illustrates how months are arranged in an AR/CO Payment Period and is based on the Beginning Date of Aid. When a CalWORKs case begins in AR/CO, it is still necessary to assign the case a SAR cycle, as the case may transition between AR/CO and SAR.

January BDA	February	March	April	May	June	July	August	September	October	November	December
1 Payment Period Begins	2	3	4	5	6	7	8	9	10	11	12   Submit Month

Reasonably Anticipated Income

Recipients are not required to report an exact amount of anticipated monthly income for each month of the AR/CO period. Instead, recipients are required to provide information about current income and any anticipated changes in the upcoming twelve months. The income reported on the SAWS 2 Plus 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 AR/CO period. If an AU/HH anticipates receipt of new income from a new source in the upcoming AR/CO period, such as a new job or UI benefits, this income shall only be considered reasonably anticipated if the county determines that:

• The income has been or will be approved within the upcoming AR/CO period, or the AU/HH is otherwise reasonably certain that the income will be received within the AR/CO period;
• The anticipated amount of income is known and verified or the AU/HH is otherwise reasonably certain of the amount of the income; and
• The start date of the income is known and verified, or the AU/HH is otherwise reasonably certain of the start date of the income.

If an AU/HH anticipates receipt of new income in the upcoming AR/CO period, but is not certain of the dates and amounts expected to be received, this income cannot be considered reasonably anticipated and must not be used in determining the benefits for the upcoming AR/CO period. If the new income exceeds the IRT mid-year, then the recipient would have to report it and benefits will be recalculated as necessary.

If an AU’s monthly income fluctuates or they expect the income reported on the SAWS 2 Plus to change in the upcoming AR/CO period, the worker must attempt to find out the amount of income the AU/HH reasonably expects to receive, in order to determine what income, if any, can be reasonably anticipated and used in the next AR/CO period’s benefit calculation. Only that portion of income that the AU/HH reasonably anticipates it will receive can be used in the benefit calculation.

ExampleExampleIf a recipient has fluctuating income, but agrees that she usually makes at least a minimum of $200 a month, the minimum anticipated income should be anticipated. If however, a recipient can’t anticipate an amount or if they will get paid in the upcoming AR/CO period, then no income can be reasonably anticipated.

New income cannot be anticipated unless the AU/HH is certain of the amount of income and the start date. If an AU/HH reports that they expect their income to change or stop, but are uncertain of when or by how much, the worker cannot reasonably anticipate this change. However, when a recipient states that the income reported on the SAWS 2 Plus is not typical, explains why, and lists an estimate of future income, the recipient’s estimate of future income should be used. Additionally, if the client states that their income fluctuates so much that they can’t anticipate any income, no income will be counted. If the worker disagrees that the income is too unpredictable to anticipate, they must explore with the client what amount, if any, can be reasonably anticipated and document the basis for the amount used in the Journal Detail page of CalSAWS.

ExampleExampleA continuing CalWORKs/CalFresh AR/CO case completes the SAWS 2 Plus application and all other paperwork for their RD/RC.The client reports and verifies current income of $300 per month. The income fluctuates from month to month. The client reports she may receive $350 one month and $275 another month, and there is no way to predict how much she will receive in any one month. In this instance, the worker will budget $300 per month, based on current income, for the AR/CO period, since changes cannot be reasonably anticipated. The client may voluntarily report a decrease in income in the future months, and the worker would issue a supplement, if appropriate, based on the voluntary report.

Income Beginning or Ending

Income that the client anticipates will begin or end in one of the months of the upcoming AR/CO period will only be counted in the months that the income is reasonably anticipated to be received. This is a change from SAR and will allow an AU to receive the maximum benefit amount in the months in which this income is not received. Income ending in the month of application will only be used to determine eligibility and benefit for the month of application.

ExampleExampleA continuing CalWORKs/CalFresh AR/CO case completes the SAWS 2 Plus and all other paperwork for their RD/RC. The client reports no current income but anticipates and provides verification that she will earn $500 per month starting in month three, and the income will continue. The income is not averaged. Instead, a full grant is provided in months one and two, and the $500 income is budgeted for months three through twelve. When the grant is decreased based on the increased income, a 10-day NOA must be sent to the client.

ExampleExampleA continuing CalWORKs/CalFresh AR/CO case completes the SAWS 2 Plus and all other paperwork for their RD/RC. The client reports and verifies current income over the IRT. The client reports she expects the income to continue until month four, when she anticipates she will be laid off. In this instance, the CalWORKs and CalFresh cases are discontinued and Transitional CalFresh benefits would be established.

ExampleExampleA continuing CalWORKs/CalFresh AR/CO case completes the SAWS 2 Plus and all other paperwork for their RD/RC. The client reports current income of $300 per month, which she expects to continue in months one through five. The client anticipates and provides verification that she will receive $400 in months six through eight and $500 in months nine through twelve. The income is not averaged to get one monthly income amount for the twelve month AR/CO period. Instead, the actual amount reasonably anticipated, resulting in one grant amount for months one through five, one grant amount for six through eight, and one grant amount for months nine through twelve.

Conversion Factors

Whenever a full month’s income is anticipated but is received on a weekly or bi-weekly basis, the income must be converted to a monthly amount as follows:

ExampleExampleIncome received weekly must be converted to a monthly amount by adding the four (or five) weekly paychecks together, dividing by four (or five) and multiplying the weekly averaged income by 4.33.

ExampleExampleIncome received bi-weekly must be converted to a monthly amount by adding the two (or three) bi-weekly paychecks together, dividing by two (or three) and multiplying the bi-weekly averaged income by 2.167.

The AU/HH must anticipate that their monthly income will continue, in order to convert the income into a monthly average.

ExampleExampleA continuing CalWORKs/CalFresh AR/CO case completes the SAWS 2 Plus and all other paperwork for their RD/RC.They report receiving four checks in the RD/RC month and explain that one of the checks was higher or lower than usual, but the other three are representative of their weekly income and they expect that amount to continue, the worker can use the conversion factor to convert the three representative weekly paychecks into a monthly average. The conversion factor will be applied to the reasonably anticipated income, rather than the RD/RC month income because the income received in the RD/RC month is not expected to remain the same.

Fluctuating Income

When the AU/HH receives weekly or bi-weekly paychecks, but their income fluctuates month to month and they cannot reasonably anticipate that the income received in the RD/RC month will continue at the same amount, the conversion multipliers will not be used to convert the income received in the RD/RC month into a monthly average. The worker should accept the AU/HH’s estimate of reasonably anticipated income or when that estimate is questionable, contact the client to determine what monthly income if any, can be reasonably anticipated.

ExampleExampleA recipient reports receiving $200 every week and reasonably anticipates that this income will continue at the same amount for the upcoming AR/CO period. The $200 weekly income is multiplied by the weekly multiplier of 4.33 to determine the monthly average income amount of $866.

ExampleExampleA recipient reports that she will work the first three weeks of each month, and be paid $200 per week worked. In this case, since the recipient does not expect to be paid every week, the conversion multiplier would NOT be used. Instead, the monthly income of $600 is used to determine the benefit amount for the upcoming AR/CO period.

ExampleExampleA continuing CalWORKs/CalFresh AR/CO case completes the SAWS 2 Plus and all other paperwork for their RD/RC. On the SAWS 2 Plus she reports 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 coworker was sick, but the other three weekly paychecks are typical and she expects this income to continue. The worker should disregard the $450 check 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 ($200 + $190 + $225 = $615/3 = $205 x 4.33 = $887). The reason for disregarding the $450 check must be documented in the Journal page of CalSAWS.

Mandatory Reporting

When a CalWORKs AR/CO case experiences any mandatory mid-year reporting changes, the recipient must report the change(s), verbally or in writing, within 10 days of the change(s). Mandatory reports for CalWORKs AR/CO cases are:

• Income exceeding the IRT;
• Household (H/H) composition changes;
• Address changes;
• Fleeing felon status; or
• Probation or parole violations.

ExampleExampleAn AR/CO case, in the January - December cycle period, reports on February 26th that the child in the AU has died. This mandatory report is required to be made within 10 days. A county initiated mid-period action must be taken to remove the deceased AU member effective April 1st. However, if the AU fails to report this change in time for the county to decrease benefits with timely notice, an overpayment must be assessed for any benefits issued that the AU was not entitled to receive.

Comparison Table of Reporting Methods

The table below provides a comparison of reporting requirements for Semi-Annual Reporting (SAR) and Annual Reporting/Child Only (AR/CO).

CalWORKs SAR	CalWORKs AR/CO
Income exceeding the IRT (one IRT)	Income exceeding the IRT (one IRT)
Address changes	Address changes
Fleeing felon status	Fleeing felon status
Violations of probation or parole	Violations of probation or parole
	Changes in household composition

The EW must take action on all mandatory changes reported. If the change is not required to be reported for CalWORKs, EW’s must not decrease or discontinue the CalWORKs grant mid-year. The EW will send a No Change NOA to the CalWORKs AU. Documentation must be made in the Journal Detail page of CalSAWS.

Ineligibility

If a recipient is determined to be financially ineligible based on an increase in income or a change in household composition, the EW must discontinue the case with a timely 10-day NOA effective the end of the month in which the change occurred.

Grant Decrease

If a recipient’s benefits would decrease based on an increase in income or a change in household composition, the EW must decrease the benefits with a timely 10-day NOA effective the first of the month following the month in which the change occurred.

Grant Increase

If the recipient reports an increase in income or a change in household composition at the time of their annual redetermination, the EW must verify this report and consider this change during the RD for the following 12-month period. If the report results in an increase to benefits, the EW must issue a supplement.

Tiered Income Reporting Threshold (IRT)

CalWORKs recipients subject to AR/CO must report verbally or in writing within 10 days when their income exceeds the IRT for their AU size, even if the income is received mid-year.

A CalWORKs case with income exceeding the IRT in AR/CO may be discontinued or the grant may be decreased depending on how much income is reported.

There are two tiers for the CalWORKs IRT under AR/CO rules (the same as SAR). If any member of the AU or any member of the family MAP has earned income, the CalWORKs AU is required to report when the total combined gross monthly income, earned and unearned, of all persons included in the family MAP exceeds the lesser of the following two amounts:

• Tier 1 - $1,056 (55% of the Federal Poverty Level (FPL) for a family of three effective 10/1/22) plus the amount of income that was last used to calculate the recipient’s benefits, or
• Tier 2 - 130% of the Federal Poverty Level

Because each family will have different amounts of earned and unearned income, the exact amount of income that will make each family ineligible for CalWORKs varies.

If the AU has...	Then they are required to report within 10 days when...
No income or unearned income only,	They receive earnings that, once combined with other household income, exceeds IRT.
Earnings only or a combination of earned and unearned income,	The household’s total income exceeds the IRT.
Unearned income only (including disability-based unearned income),	They receive gross earnings that, once combined with unearned income, exceeds IRT. Note: AU’s with unearned income only, are NOT required to report when that income by itself exceeds the IRT mid-period.

Note: The EW is required to determine the appropriate IRT amount for each AU and provide each AU with their reportable IRT in writing, using the “Reporting Changes for CalWORKs and CalFresh” form (AR 2). The IRT amount for each AU will be the lesser of Tier 1 and Tier 2. [Refer to Income Reporting Threshold (IRT) Tiers 1 & 2 Exempt and Non-Exempt of the Chart Book]

Informing AR/CO Recipients of Their IRT

The informing notice that provides the IRT limits must be individualized for each AU. Each AU must be informed of their IRT at least once per SAR payment period or whenever the AUs IRT changes. Additionally, the AU must be informed of the new IRT levels at any time the IRT chart is updated. The IRT level in which the AU was last notified must be used for reporting purposes until the AU has been notified, in writing, of any applicable IRT change.

The IRT must be provided to the CalWORKs AU using the “Reporting Changes for Cash Aid and CalFresh” (SAR 2, AR 2 SAR, or AR 2 CR) form as appropriate upon approval of application and at any time the AUs IRT changes during the payment period.

IRT Reporting

When income in excess of the IRT is reported, the worker must determine if the AU remains financially eligible for benefits and if so, recalculate the grant amount for the remainder of the AR/CO period using the new amount of reasonably anticipated income. A decrease to the grant can only be made after timely and adequate notice is provided. Additionally, the AU’s new IRT amount must be calculated and provided on the required “Reporting Changes for Cash Aid and CalFresh” (AR 2) form.The calculation used by the EW to determine the IRT level for each AU must be clearly documented in the Journal page of CalSAWS.

If a recipient reports income that exceeds the IRT, a determination is required whether the income will continue at that level. If it is determined that the income will not continue at that level, no action can be taken to discontinue or decrease benefits.

If the AU reports an increase in income mid-period report that is not over the IRT, the change will be treated as voluntary and will not result in any decrease in benefits. A “No Change” NOA must be sent.

Example 1Example 1

Example 2Example 2

Voluntary Reports for AR/CO

AR/CO cases may voluntarily report changes in income and circumstances that may increase benefits any time during the AU’s twelve-month reporting period. The EW will only take mid-year action on those voluntary reports that result in an increase to benefits. Voluntarily reported changes may result in an increase in benefits for one program, while decreasing benefits for the other program. For instance, an increase in CalWORKs could result in a decrease in CalFresh benefits.

Action to increase the grant and/or allotment based on voluntary reports are based on when the change is reported, not when the change actually occurred. The effective date of the increase in benefits is determined differently for increases due to decreased income than for increases due to adding household members and are as follows:

• Increases due to decreased income are effective the first of the month in which the change occurs or is reported, whichever is later.
• Increases due to the addition of new household members are effective the first of the month following the report of the changes.

The recipient must provide verification of the change within the 10-day period listed on the request for verification. If verification is not received within 10 days, the EW must send a “No-Change” NOA that states no action to increase benefits was taken because verification was not received. If verification is provided after 10 days, the date the verification is provided is considered the date of the voluntary report.

ExampleExampleAn AR/CO case has an RD/RC due in April 2013. The recipient reports a decrease in income on December 28, 2012, and provides verification of the decrease. The EW will redetermine the benefit amount for the current month (December) and the remaining months in the 12-month period. Because there is not enough time to issue the higher benefit amount on January 1, the county will issue a supplemental payment for December and January and issue the correct, higher benefit beginning in February.

ExampleExampleAn AR/CO case has an RD/RC due in August. On August 3, the recipient reports a decrease in income and provides verification of the decrease. The EW would use this information to redetermine the benefit for August and issue a supplement for August, if appropriate. The EW would also take this decreased income into account when determining the benefit amount for the upcoming 12-month period. The recipient would not have to reverify the change of income as part of the RD/RC.

ExampleExampleA CalWORKs AR/CO case has an RD/RC due in November 2013. In April 2013, the recipient voluntarily reports a $110 increase in earned income, which is not over the CalWORKs IRT. The EW may not take any action based on this voluntary report and must issue a “No-Change” NOA. For CalFresh, because the increased income is more than $100, which is above the recipient reporting requirement for CR, a timely and adequate notice must be sent, informing the recipient of the decrease in CalFresh benefits effective the following month.

County Initiated Mid-Year Changes for AR/CO

In addition to voluntary and mandatory mid-year reports, action must be taken on changes considered as county-initiated. County-initiated mid-year actions include, but are not limited to, the following:

• A child is no longer eligible due to age;
• A sanction or penalty is imposed;
• The child is placed in Foster Care (timely 10-day notice is not required in this case);
• The entire AU moves out of state;
• An overpayment (O/P) or overissuance (O/I) occurs;
• A non-minor dependent is transferred into his/her own AU;
• Aid is approved for a child or other individual, currently aided in another AU;A state hearing decision results in a mandatory change mid-year;
• An AU becomes a family reunification case;
• Acting on information provided at redetermination;
• When adjustments to correct erroneous payments are made;
• When the county becomes aware that an AU member is deceased;
• An Au is transferred to Tribal TANF;
• Cost-of-living adjustments (COLA);
• When the county becomes aware that an individual is in a correctional facility and is expected to remain for a full calendar month or more;
• Any other county-initiated actions that may arise
• An individual is terminated from TCVAP or is transferred to the federally-funded program.

AR/CO Annual Redeterminations

CalWORKs AR/CO cases are only subject to an annual RD, without the requirement of a mid-year periodic report. The RD will occur in month twelve, the final month in the AR/CO benefit period, and continue to be handled in the same manner as RD’s under Semi-Annual Reporting. Workers must schedule AR/CO annual RD appointments early enough in month twelve of the AR/CO benefit period to meet 10-day noticing requirements, in the event that the worker will need to decrease benefits the first of the month following the RD or discontinue benefits if the AR/CO family fails to comply with RD requirements.

When clients attend their RD appointment, the worker will use the information on the SAWS 2 Plus form and any additional information provided by the AU to determine continuing eligibility and future benefit amounts based on all conditions of eligibility. During the RD interview, workers must ask the client about any known changes to the income reported on the SAWS 2 Plus form to ensure that the correct income is used to prospectively budget the grant amounts for the annual benefit period. Workers will document in the Journal Detail page of CalSAWS, all factors used in determining current income along with any reasonably anticipated changes.

ExampleExampleAn AR/CO case has a RD due in January 2013. The RD should be scheduled early in January 2013, month twelve of the AR/CO benefit period. During the RD, the client reports earned income on the SAWS 2 Plus and does not anticipate any changes to the income. The worker would use this income information to determine the grant allotment amount for the following annual AR/CO benefit period, which begins February 1, 2013. The new AR/CO benefit period will be February 2013 through January 2014.

ExampleExampleAn AR/CO case has a RD due in March 2013. The case consists of a Non-Needy Relative (NNR) with earned income and a child. The worker should schedule the RD in early March 2013, month twelve of the AR/CO benefit period. The AU will get a full grant because the caretaker relative is non-needy and the NNR’s income is not used to calculate the child’s grant. The AR/CO benefit period is April 2013 through March 2014.

Cases Moving Between AR and SAR

Under some circumstances, a case will transition between AR/CO and SAR or SAR to AR/CO. A notice must be provided when a case transitions from AR/CO to SAR or vice-versa. (The notice will be provided, as soon as it is available, in a separate update).

• When a case transitions from SAR to AR/CO or vice versa, the case retains the same cycle and RD/RC due dates. The manner in which the cycle is determined depends on the reporting system the case was in when aid was initially granted. Cases that originate in SAR will have their cycle based on the date of application. Cases that originate in AR/CO will have their cycles based on the beginning date of aid. While the lack of consistency in how to determine cycles is not ideal, upon implementation of Semi-Annual Reporting (SAR) (August 10, 2013), all newly granted cases (whether SAR or AR/CO) will be assigned to a cycle based on the beginning date of aid.
• In cases where an adult is added back to the AU and the case goes from AR/CO to SAR, the SAR 7 cannot be due in the same month in which the adult is added.
• In cases where the adult has a SAR 7 due in one month, but transitions to AR/CO the following month, the case will not be discontinued if the recipient fails to submit the SAR 7. In such cases, the grant will remain the same until the RD/RC.
• When a case goes from SAR to AR/CO, the cases becomes AR/CO the first of the month following when the adult is removed from the AU.

ExampleExampleThe AU in an AR/CO case consists of a non-needy relative (NNR) and two children. On June 2, 2013, the NNR reports she was laid off from her job and provides verification. She applies to include herself in the children’s AU. The EW determines she is eligible, effective July 1, 2013. The EW provides a NOA to the recipient (The notice will be provided, as soon as it is available, in a separate update) indicating the case is now subject to SAR rules. The SAR cycle and RD/RC month will be based on the beginning date of aid or if a CalFresh case is already active, CalWORKs will follow the CF SAR cycle.

ExampleExampleEffective June 1, a timed-out mother in a continuing CalWORKs AR/CO case is added back to the AU due to child support recoupment. The case would retain the same SAR cycle the case had prior to becoming an AR/CO case.

Overpayments and Overissuances in Annual Reporting

As with SAR, CalWORKs Overpayments (O/Ps) will be based on a client’s failure to report any information they are mandatorily required to report, county error, recipient late reporting, and the EW not being able to issue the correct grant amount due to insufficient time to issue a 10-day NOA. CalFresh Overissuances (O/I’s) will be established based on recipient failure to report and county error.

ExampleExampleAn AR/CO case has a benefit period June 2012 - May 2013. On September 2012, the mother obtains employment and begins to earn income in excess of the CalWORKs IRT but the increased income is not enough to discontinue the case. However, the mother fails to report the increase in income until November 5, 2012. The EW would reduce the CalWORKs grant effective December 1, 2012, and establish an O/P for October and November. The EW would also begin recoupment of the O/P mid-year, beginning in December 2012.

AR/CO Related Forms

The following forms are new with the implementation of AR/CO and are available on line.

TEMP SCD 4

The “New Reporting Requirements for CalWORKs and CalFresh” (TEMP SCD 4) is an informing notice for CalWORKs and CalFresh cases that will begin reporting annually rather than semi-annually. The TEMP SCD 4 was mailed to clients that were identified as AR/CO cases in October 2012.

• This form must be provided to any client transitioning from SAR to AR.

AR 2

The “Reporting Changes for CalWORKs and CalFresh” (AR 2) is used to inform AR/CO clients of their current IRT and remind them of the AR reporting requirements.

• EW’s must inform recipients of their IRT no less than at each RD/RC or whenever their IRT changes.
• The calculation used by the EW to determine the IRT level for each AU must be clearly documented in the Journal Detail page of CalSAWS.

Filing: A copy of the AR 2 that is being mailed to the client must be saved in the case file IDM in the “Benefits” section, under “Income/Reporting”.

AR 3

The “Mid-Year Status Report for Cash Aid and CalFresh” (AR 3) provides recipients a way to report changes in writing at any time during the year (except at their RD/RC).
AR/CO cases may report mid-year changes either verbally or in writing.

Filing: A copy of the AR 3 must be Imaged to the case.  

NA 1239 AR

The “Notice of Action Continued (with budget)” (NA 1239 AR) is used when calculating the recipient’s monthly cash aid amount for an AR/CO case for the annual period or an attachment to the “No Change NOA”, showing that the grant will not change after a mid-year voluntary report.

Related Topics

Eligibility/Status Report- Semi-Annual SAR 7

Processing a SAR 7