Income in Kind

When any item of need (housing, utilities, food or clothing) is provided free of cost to an AU member, including those items provided in lieu of earnings, deduct from MAP the CalWORKs income in kind chart value for that need item(s) (according to the size of the AU), unless a lower verified value is established.

Income in kind shall not be charged solely because a recipient fails to pay his/her rent. If the rent is an incurred obligation (i.e., recipient still owes landlord), no income in kind shall be charged. The intent of the landlord must be considered. If the intent is to charge the client for rent, then there is no income in kind. If the intent is to provide the client with free rent, then the EW must make a determination of the amount of income in kind.

Deeming

Income in kind is never deemed to the AU when it is received by a person who is NOT in the AU. Income in kind is not considered as part of the excluded person's income because the value of items of need can only be assigned to recipients. When the Non-AU member parent(s) of an eligible child(ren) receives free rent, utilities, food or clothing, this need item is considered contributed to the AU, unless there is verification that the AU members must contribute towards those need items.

If all family members are receiving income in kind, the amount of the income in kind counted to the AU is the lesser of:

The prorated share of the net market value, or
The actual cost, or
The chart value for the AU.

Steps

The EW must calculate each of the above values to determine the amount counted as income in kind to the AU.

Determine the market value of the items of need.
Compute the pro-rated share by dividing the market value of the item of need by the number of persons receiving income in kind and then multiplying the result by the number of persons in the AU.
Determine the actual cost of the item of need.
Determine the chart value of the item of need.
Calculate the amount of income in kind to be counted to the AU by using the lesser of the amounts obtained in Steps 2, 3, or 4.

Example 1

The Family consists of an excluded noncitizen mother and her two citizen children. The mother provides a note from her brother that he is providing her with free room and board, but that the children must pay $150 monthly for their room and board. In this situation, the benefit the mother receives is not considered as part of the excluded person's income and is therefore NOT deemed to the AU. There is no income in kind for the children.

An ineligible parent receives free housing from her mother for herself and her two children who receive CalWORKs. A note is provided from the grandmother to verify this and a value of $600 is established. To determine the amount of income in kind counted to the AU.
- Take the pro-rated market value of the rent ($600), divide by three (3) and multiply the result by two (2). ($600 ÷ 3 = $200 x 2 = $400.) The AU's pro rated share is $400.
- The actual cost is $600.
- The chart value is $283 (For an AU of 2 effective 8/1/05).
- To complete the budget computation, use any income the excluded parent receives plus $283, the lesser value of the income in kind for the AU.

Example 2

An ineligible noncitizen mother is working for the rent and utilities for herself and her three (3) children who receive CalWORKs. Verification is received concerning this, but no value is established. Since no AU member is working and earning the income in kind, the amount counted to the CalWORKs budget is considered unearned income in kind.

To compute the budget, use any earned or unearned income the mother may receive.

Do not count the income in kind for the mother, as she is not a member of the AU and income in kind is not assigned.
Use the income in kind rent and utilities for the three (3) children as unearned income.

Partial Item of Need

There is no income in kind for any need item in which the recipient shares the cost.

Example Example An AU consists of the mother and one child. Her rent is $500 per month and the mother's father pays $200 of her rent directly to the landlord. He does not give this to the CalWORKs client. This is considered a partial item of need as the mother must pay the remainder of the rent, therefore there is no income in kind counted to the AU.

Lesser Value

A lesser value is used whenever the applicant or recipient does not agree with the value assigned from the income in kind chart AND brings verification to the EW documenting the actual cost is LESS. The chart values are maximum. No higher income in kind figures may be used. The EW MUST inform clients of their right to establish lesser values. This explanation must be documented on the Journal Detail page.

Housing and Clothing Values

The income in kind income value for housing and clothing is determined by the net market value of the item to the provider (i.e., the best sale or rental price the provider could receive for the item on the open market). Acceptable verification is the provider's written statement of the value.

Example Example Mr. Doright provides free housing for his CalWORKs niece and her three children. His house payments are $375. Prior to allowing his niece to move in, he had rented the house for $685. The market value of the housing is $685, as determined by a written statement provided by Mr. Doright. The $685 income in kind value is compared to the chart value for housing. In this case, the chart value which is maximum is the amount shown as income to the AU. When the provider of the free housing and clothing must pay monthly rent or purchase the clothing, simply use the actual cost of the item to the provider as the value. Verification is the provider's written statement and receipts.

Example Example Mr. Doright provides free housing as in example above, but he is not purchasing the house. He pays $350 monthly rent to the landlord as established by his rent receipt. (This is the value of the housing which is compared to the income in kind chart figure for housing; the lesser figure is income to the AU.)

Utilities and Food Values

The income in kind value for utilities and food is the actual cost to the person who paid for the item or the chart value, whichever is less. Verification of the amounts paid for utilities and food is the provider's written statement and receipts, if available. There is no income in kind for a partial item of need.

Example Example A client and her two children are sharing a home with her friend, the friend’s husband and their three children. The AU is receiving utilities in kind. The friend’s husband refuses to provide his utility bills, so the EW must use the chart value of utilities in kind for three (3).

Shared Costs

When an income in kind need item is shared with non family members, the income in kind value to the AU is their prorated share of the value of the item or the income in kind chart value, whichever is less.
Example Example An AU of three lives with two other unrelated persons. These five individuals receive free housing valued at $425. To determine the housing income in kind for 3 divide the total value of $425 by 5 = $85.00 per person; then multiply by 3 to determine the value to the AU = $255. The chart value is $309 (effective 8/1/05) income in kind housing for 3 persons. Income in kind shown on the budget is $255, the lesser amount.

Exempt Income in Kind

Income in kind is exempt when:

It is provided on the basis of need by a private, nonprofit organization.
It is not exempt if the entire need is provided by a public, nonprofit organization.
Only a partial item of need is provided and the client pays for the remainder of the need item.

Refer to Exempt/Excluded Income and Earned Income in Kind.

Note: The Bill Wilson Center is a public, nonprofit organization.

Income in Kind to Minor Parent

Income in kind is not counted to the AU of the minor parent living in the home of the unaided senior parent. All other income of the “family”, AU members and Non-AU members, living in the home must be counted in the budgeting process.

Refer to Senior Parent/Minor Parent and Budgeting for more information on the senior parent/minor parent income determination.