Restricted Account Information

[EAS 42-213.23]

The AU must establish and maintain any restricted accounts separately from other accounts.

The ability to establish a restricted account is not a once-in-a-lifetime occurrence. The recipient may make a qualifying withdrawal and be allowed to build up the account again. If a nonqualifying withdrawal is made, a period of ineligibility must be established. Once this is done and the individual again becomes a recipient, he/she may establish another restricted account, if they wish.

Account Verification

The AU must provide verification to the county of the following information for each account within 30-calendar days from the date the written agreement is signed:

Names of persons as shown on the restricted account,
- It is recommended that only one name be on the account.
- Second names on the account may be allowed, and this person may or may not be in the AU. If the second person makes a nonqualifying withdrawal, the AU is responsible for the consequences.
- All persons named on the account must sign the CW 86.
Name and address of the financial institution,
Account number, and
Account balance and activity since the date the agreement was signed.
- Anyone can make a deposit into the restricted account. The EW must determine whether the money deposited into the account was exempt or nonexempt as income to the AU and take appropriate action based upon the income determination.

Purpose of Account

[EAS 42-213(d)]

A restricted account can be established for one or more of the following purposes:

To purchase a home that will be the principle residence for the AU.
For the education or vocational training of the account holder or any person who is or could be claimed by the account holder as a dependent for federal income tax purposes.
To start up a new business for an AU member.
To help pay for costs associated with securing permanent rental housing.
To pay for rent arrearages in order to avoid becoming homeless.

Note: Any savings held in a restricted account are considered exempt from being counted toward the $100 property limit when determining eligibility for HA.

Interest Exemption

[EAS 42-213(f)]

Interest earned on the restricted account is exempt for purposes of determining CalWORKs eligibility and grant amount, if the interest is deposited directly into the account by the financial institution.

Interest which is not deposited directly into the restricted account is not counted as income to the AU, but is considered a nonqualifying withdrawal. Refer to Nonqualifying Withdrawal [EAS 42-213(i).

The entire interest payment is exempt as income and may be spent.

Exception for Restricted Accounts

The RECIPIENT AU may have restricted bank accounts with no maximum amount providing the applicable requirements have been met.

Note: Restricted account regulations do not apply to applicants.

Special Circumstances

Child Only AU

When the AU consists of a child or children only, the restricted account(s) must be established in such a manner that:

The funds are the sole property of the child, and
The caretaker is the custodian of the account.

An example of this is a trustee account.

Combining AU's

If two AU's must be combined and each AU has a restricted account, regular CalWORKs rules apply to restricted accounts.

If some members of the new AU have a POI due to a nonqualifying withdrawal from the previous AU, the POI may be shortened or a separate AU established. Refer to Shortening the POI [EAS 42-213(n)] or Separate AU for Other Eligibles [EAS 42-213(o)].