Exempt/Excluded Income

SSI/SSP or CAPI Payments and Income

Aid payments and income of an SSI/SSP or CAPI recipient should not be included in the Assistance Unit (AU)’s Income Eligibility Test and grant computation. Lump sum retroactive SSI/SSP or CAPI payments received by a recipient are not countable income or property to the AU. 

Income derived from an interest in the community or joint property of an SSI/SSP or CAPI recipient and the AU members is prorated between owners, and only the AU’s share is countable income to the AU.

Actual voluntary contributions made by an SSI/SSP or CAPI recipient to a CalWORKs recipient are income to the AU. This does not include pooled income to meet shared living expenses in a shared living arrangement. However, no contribution will be required of the SSI/SSP or CAPI recipient (EAS 44-133.2).

CalABLE or ABLE Accounts as Income

For CalWORKs eligibility purposes, California Achieving a Better Life Experience (CalABLE) and ABLE account balances are limited to $100,000. Withdrawals used toward qualified disability expenses (QDEs) shall not be counted as income. Earnings in CalABLE or ABLE accounts are not subject to federal income tax or California state income tax, when they are spent on qualified expenses. Information and materials about the CalABLE program are available at the CalABLE website.

CalKIDS Accounts as Income

The assets and money allocated to California Kids Investment and Development Savings (CalKIDS) accounts are owned by the State. Households with CalKIDS accounts will not have direct access to the funds in the account. Instead, the funds will be distributed directly to the higher education institutions on behalf of the participants to pay for qualifying higher education expenses. Any funds, including funds deposited and investment returns, originating from a CalKIDS account are not counted as income for CalWORKs. Information and materials about the CalKIDS program are available at the CalKIDS website.

Guaranteed Income (GI) Payments

Guaranteed Income (GI) payments are one or more unconditional cash payments issued from a GI program intended to support the basic needs of recipients. An unconditional payment means that there are no restrictions applied to how GI participants use their GI. Further, unconditional means that once a participant enrolls in a GI program, they do not need to engage in any conditional activities to receive payments (including, but not limited to, work requirements, participation in services, or any other mandatory activities). 

GI payments may also be referred to as Universal Basic Income (UBI), Guaranteed Basic Income (GBI), or Cash Transfer Program (CTP). GI payments are structured in many ways and may vary in frequency, duration, and amount. All GI payments are exempt from consideration as income and resources when determining CalWORKs eligibility and grant amounts.

ExamplesExamples

Refer to GI Tracking to Verified Guaranteed Income Programs for a list of verified GI programs.

Note: If the GI program is not listed, provide the client with a Guaranteed Income Self-Identify Coversheet (SCD 2620) to give to the GI program. The GI program must follow the process on SCD 2620 to be added to GI Tracking to Verified Guaranteed Income Programs.

Verification

CalWORKs applicants and recipients who are also GI program participants must submit verification of GI program participation and the GI payment received at application, SAR 7, and annual redetermination (RD).

Examples of verification include, but are not limited to, award letters or bank statements. If an award letter is used to verify participation and GI payment, it should contain enough information to properly identify the GI program. An acceptable award letter could be on program letterhead; include the program name and contact information for the program administrator; and state the frequency, duration, and payment amount. Social Services Benefits Specialists (SSBSs) may also contact the GI program on the client's behalf by obtaining a release of information.

Compensation of Converted Property

[EAS 44-105]

Compensation for converted property are those payments which are received from insurance companies, settlements, court judgments, or other similar sources which wholly or partially compensate for property which has been lost, stolen, damaged, or destroyed. Under the SAR rule, nonrecurring lump-sum payments, which are not recurring regular income, must be treated as property in the month of receipt and any subsequent months.

Student Exemption

[EAS 44-111.22]

All earned income of a child under 19 years of age is exempt if the child:

• Is a full-time student, or
• Has a school schedule that is equal to at least one half of a full-time curriculum and is not employed full-time.

Note: A minor parent who is considered an adult in the AU is not considered a child and cannot receive the student exemption (i.e., a teen parent who is an emancipated youth and/or head of household of their own AU).

Definitions

For purposes of this exemption, school attendance is defined as attendance in a school, college, university, or other course of vocational or technical training designed to fit the child for gainful employment. This includes a participant in the Job Corps Program under the Economic Opportunity Act.

Part-time employment is defined as less than 173 hours per month.

Part-time student is a student attending less than a full-time course as defined by the school.

Vacation

The student exemption applies to full-time or part-time earnings between school terms or during vacation periods, if the child plans to continue to be a student next term or when the vacation period ends.

Income Tests

If the student meets the appropriate criteria, their income is exempt from all income tests.

When adding a student who is eligible for the student exemption to an existing AU, the Applicant Gross Income Test is not determined. The AU is subject to the Recipient Net Income Test (RNIT), but the student’s exempt income is not counted.

Independent Living Program (ILP)

[EAS 44-111.25]

Income and incentive payments earned by a child 16 years of age or older who is participating in the ILP are exempt as income for the purposes of eligibility and grant determination, when received as part of the ILP written transitional independent living plan. There is no limit to the amount exempted under this. (Generally, the child will be or will have been in Foster Care when the monies were earned.) 

Exempt Income from Public Sources

[EAS 44-111.3]

Exempt income from public sources includes:

• Relocation assistance benefits, paid by a public agency to a public assistance recipient who has been relocated as a result of a program of area redevelopment, urban renewal, freeway construction, or any other public development, involving demolition or condemnation of existing housing.
• Advance payments or reimbursements made by CalWORKs Employment Services (CWES) for supportive services.
• Payments made for out-of-pocket expenses to persons who are serving on advisory group(s) set up by the California Department of Social Services (CDSS) and/or the California Health and Human Services Agency.
• Payments received under the California Victim Compensation Program.
• The allowance for training expenses paid to recipients who are participating in Department of Rehabilitation training programs.
• Payments received under the Energy Crisis Assistance Program or the Low Income Energy Assistance Program (EAP).
• Retroactive subsidy payments received from the Department of Housing and Urban Development as a result of the settlement in the Underwood v. Harris Court Case. This represents a reimbursement of increased tax and utility costs that were incurred in 1975 through 1977.

The following funds are exempt from consideration as income:

Workforce Investment Act (WIA) (Replacement of JTPA)

Payments and earnings received by a child that are derived from participation in WIA are disregarded as income for both the eligibility and grant determination when that child is in the AU. 

Payments to an adult that are derived from participation in WIA programs are exempt as income to the extent the payment reimbursements do not exceed actual participation-related expenses. This exemption does NOT apply to earnings paid under WIA.

California Franchise Tax Board (FTB)

Payments or funds received from the California FTB, including:

• Renters Credits
• Senior Citizens Homeowners and Renters Property Tax Assistance Program (applies to persons who are disabled, blind, or 62 years of age or older)
• Senior Citizens Property Tax Postponement Program (applies to persons 62 years of age or older).

Special Tax Credits and Rebates

Tax rebates, credits, or similar temporary tax relief measures that state or federal law specifically excludes from consideration as income for CalWORKs.

Other Exempt Income

[EAS 44.111.4]

County Supplementation and Voluntary Contribution

County supplementation and/or voluntary contributions from persons or organizations who have no liability for the support of the recipient are exempt when:

• The service to be provided is designated as a need by CDSS, and
• The contribution would not be available for expenditure unless used in accord with the conditions imposed by the donor, and
• The recipient's grant and other income are not sufficient to meet the total needs within the limitations established for the particular program, or the designated need is one, all or a portion of, which is not included in the assistance standard for the particular program and thus cannot be met from the recipient's grant and income.

"Designated need" for this section includes housing approved for Federal Rent Supplements under the Housing Act of 1965. When the recipient qualifies for a rent supplement under the Federal Housing Act of 1965, the rent supplement payment made by the federal agency, on behalf of the recipient, to the landlord or sponsor is disregarded as income.

Infrequent or Irregular Income

Income which is received too infrequently or irregularly to be reasonably anticipated is exempt as income, but not in excess of $30 in a quarter. The following also apply:

• The exemption is allowed per AU, not per individual.
• “Reasonably anticipated” income is determined by the SSBS, not the client.

Note: SSBSs must document infrequent or irregular income on the Journal Detail page.

Child/Spousal Support Disregard

Prior to January 1, 2022, the first $50 per month of current child/spousal support paid to an AU is disregarded in determining both the Applicant Gross and Recipient Net Income Tests and grant amount.

Effective January 1, 2022, the disregard increased to up to $100 for a household that has an AU of one child and up to $200 for a household that has two or more children in the AU. All other rules pertaining to disregard income remained the same.

When the child/spousal support payment is received by the county, the amount of the current support payment which is paid to the AU is disregarded. This is applied in the month in which the payment is received by the county and in the month the disregard payment is received by the AU, if different.

When the current child/spousal support payment is received or reasonably anticipated to be received by the AU directly from the absent parent, the first amount up to $100 or up to $200 (depending on children in the AU) is disregarded, and the balance of the support payment is considered income to the AU.

If the AU receives a payment from the county which consists of payments from current child/spousal support for more than one month, the disregard limit must apply only to the total child/spousal support disregard for the month to which the disregard is attributable.

Example Example The County received current child/spousal support payments of $150 in January, $150 in February, and issued the AU a disregard payment of $100 in March. The total $100 must be disregarded in March for purposes of determining eligibility and grant, since it is attributable to January and February. 

The disregard rule does not apply to “pass on” OR “excess” payments from the Family Support Division (FSD).

If the AU receives child support from more than one absent parent, only one disregard is allowed.

If the child support is received by a non-AU member (i.e., unaided stepparent’s separate child), do not allow the child support disregard.

Child Support-Safety Net Child-Only (K1/3F) Cases 

Effective July 1, 2024, all support payments for K1/3F families must be exempt from consideration as income and resources for purposes of determining CalWORKs eligibility and grant amount while the family is receiving aid. Therefore, all support, including direct support payments already being received by any family receiving aid under the K1/3F aid codes, will be exempt from CalWORKs when determining eligibility and calculating the grant.

Additionally, the Department of Child Support Services (DCSS) must pass through any amount of collected support to former K1/3F CalWORKs recipients and current K1/3F families for any periods where they have received CalWORKs in the past under non-K1/3F aid codes referable to DCSS.

United States Census Income to Temporary Workers

Any census-related income or stipend earned during the year preceding a decennial census and during the year of the decennial census should not be considered income for the CalWORKs program for U.S. Census temporary workers. This includes all income paid by the U.S. Census Bureau, a government entity, or a nonprofit organization for temporary work related to improving participation in the decennial census, regardless of the year paid, effective January 1, 2021. Prior to January 1, 2021, census -related income was exempt the year preceding a decennial census and during the year of the decennial census.

Exempt Income In Kind (IIK)

[EAS 44.111.45]

Refer to the Exempt IIK section of Income in Kind.

Educational Loans and Grants

[EAS 44-111.43]

Effective March 1, 2026, Assembly Bill (AB) 42 exempts all grants, awards, scholarships, loans, and fellowships awarded for the purpose of attending a higher education institution from consideration as income for CalWORKs.

Important: This exemption does not apply to cash payments from friends or relatives made directly to the AU member for this purpose, which continue to be counted as income.

Common programs and sources of education-related income include, but are not limited to:

• Title IV of the Higher Education Act or the Bureau of Indian Affairs, including:
  • Supplemental Educational Opportunity Grant (SEOG)
  • Carl D. Perkins Loans
  • National Direct Student Loans (NDSL) (also known as Perkins Loans)
  • Robert C. Byrd Honors Scholarship Program
  • National Science Scholars Program
  • State Student Incentive Grants (which includes the Cal Grant program)
  • Paul Douglas Teacher Scholarship Program
  • Income Contingent Loan (ICL) Program
  • Bureau of Indian Affairs Higher Education Grant
  • Indian Health Service Scholarship Program
  • PELL Grant
  • Any college work study program
  • Federal Family Education Loan (FFEL) Program, including:
    • Guaranteed Student Loan (GSL) Program
    • Stafford Loan Program
    • Consolidation Loan Program
    • Supplemental Loans for Students (SLS) Program
    • Parent Loans for Students (PLUS) Program
• Carl D. Perkins Vocational and Applied Technology Education Act
• Special Programs for Students from Disadvantaged Backgrounds
• Special Programs for Students Whose Families are Engaged in Migrant and Seasonal Farm Work
• Grants to States for State Student Incentives and the Income Contingent on Direct Loan Demonstration Project
• Any other grant to any postsecondary student for educational purposes issued under any program administered by the Federal Secretary of Education
• Educational grants to any postsecondary student when awarded on the basis of the student's need (such as the California College Promise Grant, which is formerly known as the BOG Fee Waiver).

Verification

Verification must establish that the financial assistance is for the purpose of attending a higher education institution and is therefore excludable. Once verification is provided, these funds will be excluded regardless of whether they are distributed to the educational institution or to the AU member receiving CalWORKs.

College Work Study Program

[EAS 44-111.24]

Earned income from any college work study program is exempt. This includes, but is not limited to, earned income from:

• The college work study program under the Higher Education Act, and
• Any other college work study income.

This exemption is applied to both the eligibility and grant determination, whether or not the student has received aid previously.  

CalWORKs Work Study Income

Earned income from CalWORKs college work study is exempt. The CalWORKs work study jobs are with employers who currently participate in campus-based work study programs or who are providing work experiences that are directly related to and promote student educational programs.

• The identification of a viable work study is determined by the community college.
• These programs are generally referred to as CalWORKs college work study, but may have other titles, such as CalWORKs @ Work 75/25 Program.

Ground Infantry (GI) Bill

The GI Bill consists of educational benefits paid to a veteran who served in the military prior to January 1, 1977. Under the G.I. Bill, the Veteran's Administration pays all the benefits. The veteran has not made any contributions toward the benefits.

Montgomery GI Bill Selected Reserve 

The Montgomery GI Bill Selected Reserve provides educational assistance benefits for eligible persons who have a six-year obligation to serve in the Selected Reserve after June 30, 1985.

Vietnam Era GI Bill 

The Vietnam Era GI Bill combines aspects of the old GI Bill and the current Montgomery GI Bill. It is available for veterans who served prior to December 31, 1976, and remained on active duty until at least July 1, 1987.

The veteran receives one-half of the amount they would have been eligible for under the former GI Bill, plus the full amount of the Montgomery GI Bill benefits. No contributions were made by the veteran.

Dependents GI Bill 

The Dependents GI Bill provides educational assistance for up to 45 months to dependent children and spouses of service-connected deceased veterans, 100% disabled veterans, and veterans missing in action.

Veteran's Educational Assistance Program (VEAP)

The VEAP is for veterans who entered active military service between January 1, 1977, through June 30, 1985. They receive benefits based on their own voluntary contribution while on military duty.

U.S. Department of Veterans' Affairs Vocational Rehabilitation Program

This program provides benefits to certain veterans who have service-connected disabilities of 20% or more, or 10% or more if they also have an employment handicap. These benefits are available regardless of the veterans’ date of entry to active services. 

Veterans under this program receive a fixed monthly stipend, which is based on their classification as a full-time, three-quarters time, or half-time student. The Veteran's Administration (VA) pays the school directly for the cost of tuition, books, supplies, and tutorial or special assistance.

Filipino Veterans Equity Compensation Fund

The Filipino Veterans Equity Compensation Fund, created by the American Recovery & Reinvestment Act (ARRA), provides for certain veterans who served in the military of the Government of the Commonwealth of the Philippines during World War II and the spouses of those veterans to receive a one-time payment of up to $15,000. These benefits are not to be used to determine eligibility or the amount of benefits in any federal program.

Veterans Educational, Vocational, and Rehabilitation Income

Effective January 1, 2018, benefits and related allowances received from the U.S. Department of Veterans Affairs for the purpose of education, training, vocation, or rehabilitation are considered exempt as income for the purpose of determining CalWORKs eligibility.

Benefits and related allowances received from the VA and exempt under Senate Bill (SB) 570 include, but are not limited to:

• Yellow Ribbon Program
• Survivors' and Dependents' Educational Assistance (DEA) Program
• Vocational Rehabilitation and Employment (VR&E) Services
• National Call to Service Program
• Compensated Work Therapy (CWT)
• Tutorial Assistance
• Monthly Housing Allowance
• Licensing and Certification Reimbursement
• Work Study
• GI Bill.

Individuals eligible to receive the exemption include:

• Veterans,
• Dependents of a veteran,
• Spouse of a veteran who either died in the line of duty or has a service-connected disability.

ExampleExample

Reminder: Any unused amount of income received for education, training, vocational, and rehabilitation programs is exempt as income.

Other Grants and Loans

[EAS 44-111.436, 44-111.437]

Availability

Other grants may be exempt when it is verified that they are not available to meet current needs of housing, utilities, food, or clothing.

A written statement by the granter giving the purpose of the grant will be required. No further verification is necessary.

Bona Fide Loans

Bona fide loans are excluded as income, regardless of the source or intended purpose of the loan, when it is verified that the following conditions are met:

• The terms of the loan are stated in a written agreement that is signed and dated by the lender and the applicant/recipient, and
• The agreement clearly specifies:
  • The obligation of the applicant/recipient to repay the loan, and
  • A repayment plan which provides for installments of specified amounts on a regular basis until the loan is fully repaid.

Income Exempt by Federal Law

[EAS 44-111.6]

Other income that is mandatorily and specifically exempted by federal law is exempt from the date specified in the law. Examples of this include, but are not limited to:

• Funds distributed per capita or held in trust for members of any Native American tribe under Public Law (PL) 92-254 or PL 94-540.
• Funds of Native American tribes, including interest earned and investment income derived from such funds, when the funds are:
  • Distributed by the Secretary of the Interior on a per capita basis, or
  • Held in trust by the Secretary of the Interior. (PL 93-134, PL 97-458, PL 98-64)
• Income of up to $2,000 in any consecutive 12-month period for individual Indians when such income is derived from individually owned interests in trust or restricted lands. (PL 103-66)
• Compensation received by recipients 60 years of age or older, for volunteer services performed under the Retired Senior Volunteer Program, the Foster Grandparents Program, or the Older Americans Community Service Program of the National Older Americans Act. (PL 89-73)
• The value of supplemental food received under the Child Nutrition Act (WIC) and the National School Lunch Program. (PL 92-433, PL 93-150)
• Payments made under the Domestic Volunteer Services Act of 1973 to public assistance recipients who are VISTA volunteers, and payments made for supportive services or reimbursement for out-of-pocket expenses made to persons serving in the Service Corps of Retired Executives (SCORE) and the Active Corps of Executives (ACE) pursuant to Section 418. (PL 93-113)
• Distributions to a household, individual Native, or descendant of a Native when received from a Native Corporation established pursuant to the Alaskan Native Claims Settlement Act (ANCSA). Exempt distributions include:
  • Cash (including cash dividends on stock received from a Native Corporation) to the extent it does not exceed $2,000 total per person per year
  • Stock
  • A partnership interest
  • Land or interest in land
  • Interest in a settlement trust. (PL 100-241)
• Payments received as restitution made to U.S. citizens and permanent resident non-citizens of Japanese ancestry and to Aleuts as a result of being relocated by the U.S. government during World War II. (PL 100-383)
• Federal major disaster and emergency assistance provided under the Disaster Relief Act and comparable disaster assistance provided by the state, local governments, and disaster assistance organizations. (PL 100-707)
• Payments received from all Agent Orange settlements. (PL 101-201, PL 101-239)
• Payments received under the Radiation Exposure Compensation Act. (PL 101-426)
• Payments received from the Ricky Ray Hemophilia Relief Fund. (PL 105-369)
• Earned Income Credit (EIC) payments are exempt whether received as an advance payment or as a single payment at the end of the tax year. (PL 101-508)
• Payments received as restitution made to victims of Nazi persecution. (PL 103-286)

Disaster Relief Payments

[EAS 44-111.6]

The Federal Emergency Management Agency (FEMA) provides a disaster relief program to assist victims by issuing temporary funds. Receipt of these funds is primarily dependent on residing in an area declared by the President as a disaster area. Funds are provided either through a direct lease between FEMA and a commercial property owner or through a reimbursement from FEMA to a disaster relief recipient. Funds issued under the FEMA program are for temporary housing and replacement of any household items lost in a disaster. They may be made to the disaster victim directly by FEMA or through the Individual and Family Grant Program (IFGP). It is the recipient's responsibility to maintain receipts for purchases, and any remaining funds are to be returned to the state agency administering the FEMA program.

The IFGP is a disaster relief program. The IFGP payments are specifically designated for purchasing flood insurance or replacing property lost in the flood.

The Small Business Administration also makes some disaster relief loans to aid in rebuilding businesses damaged in the disaster.

Treatment of Disaster Payments

State policy is that since the disaster payments are conditional and must be spent on specific items, they are considered unavailable.

Disaster relief payments are totally exempt as income or as a resource. The funds remain exempt even if intermingled with other resources. If they are intermingled, the SSBS must monitor how much remains of the disaster payment and how much is a countable resource to determine if continuing eligibility is affected.

Grantmakers Fund

[EAS 44-111.42]

The Northern California Grantmakers Critical Family Needs/Housing Assistance Fund is the result of a fund drive conducted by the San Francisco Chronicle among its readers and various foundations and corporations. It is a coordinated effort among public and private agencies. Its purpose is to provide modest financial assistance to families, the elderly (60+), and the handicapped with critical family and/or housing needs in order to maintain self-sufficiency or reunite a family or help eliminate dangerous health and safety situations.

An example of this is funds issued through the Emergency Assistance Network (EAN). The EAN consists of eight community agencies receiving funding from United Way.

Purpose of Grantmakers

The Grantmakers Fund is to be used for critical non-recurring situations. It is the last resort. Other public and private resources must be explored. Grantmakers can be used to match other resources, including the applicant's, if those resources are inadequate to pay the full cost of an item or housing expense.

The use of the Grantmakers Fund must resolve the immediate problem and help the individual or family regain self-sufficiency. It should not be used as a temporary stopgap.

Eligibility for Grantmakers

Any family with dependent minor children, including those families where reunification is imminent, an elderly (60+) individual or couple, or a handicapped person with residency in the county and who meets the Fund's definition of critical need, may be eligible for Grantmakers.

Use of Grantmakers

Some examples of critical family needs are:

• Help with medical costs not covered by Medi-Cal.
• Help with eyeglasses, hearing aids, and other medical appliances.
• Refrigerators, stoves, infant needs, and critical transportation.

Some examples of housing assistance are:

• First and last month's rent.
• Housing and utility deposits.
• Mortgage/rent coverage of not more than the current month and prior month.

Limits of Grantmakers

There is a $200.00 maximum limit every 12 months for applicants or applicant families for critical needs. There is also one housing assistance allowance every 12 months for the applicant or applicant's family. PG&E bills are excluded from Grantmakers.

Exemption

Aid provided to clients is exempt income as it is a voluntary contribution from an organization.

The payments are made directly to the providers. The client, in some cases, will not receive any information about the payment. The client’s statement on the SAR 7 is sufficient verification.

Payment for Child Support

No deduction is allowed from either earned, unearned, or disability based income for actual payments being made in support of a child or spouse not in the home, whether or not this is a result of a court order.

Court-Ordered Payments

Ball v. Swoap Payments and King v. McMahon payments to clients when Appeals decisions have not been provided in a timely manner are exempt as income.

Adoption Assistance Program (AAP) Payments

Payments made to families under the AAP are to be disregarded as income. The child receiving funds from AAP is to be included in the AU, but the AAP is not to be counted as income.

Kinship Guardian Assistance Payment (Kin-GAP) Program 

Children who receive Kin-GAP do not have their income or aid payment considered in their relatives’ CalWORKs cash aid. The income of a Kin-GAP recipient is only considered income for the Kin-GAP program. Refer to Foster Care Handbook Kin-GAP Income.

Spina Bifida

[EAS 44-111.6 & 42-213.5]

Payments received, under Public Law 104-204, by Vietnam Veterans’ children who are born with Spina Bifida are excluded from income and resources in determining eligibility for, or the amount of benefits, under CalWORKs.

Related Topics

Income