Earned Income

[EAS 44-101.5] [W&I Code 11451.5]

Earned income is income received either in cash or in kind from wages, salary, employer-provided sick leave benefits, commissions, or profit from business activities. The individual may be either self-employed or an employee.

Refer to Chewable Byte 24-111: How to Complete Employment Detail Page for CalSAWS entries.

Inclusions

Earned income also includes the following:

Earnings over a period of time for which settlement is made at one given time, such as in the sale of farm crops, livestock, etc.
Returns from real or personal property, such as net income from the rental of rooms or room and board. These returns must result from an effort on the part of the applicant or recipient.
Earnings under Title 1 of the Elementary and Secondary Education Act, and wages paid under the WIA. Refer to Room and Board Income or Room Rental for more information on WIA income.
Payments under the Economic Opportunity Act, including payments to beneficiaries of assistance under the act, through such programs as the Neighborhood Youth Corps, New Careers, and Concentrated Employment.
Training incentive payments and work allowances under ongoing manpower programs, other than Employment Services and WIA.
Earnings from OJT.
Under Federal policy, sick pay is considered to be earned income because it is provided by an employer to an employee during a temporary period of illness. It is a continuation of income at less than, or at the same, rate as regular wages.

Exclusions

Earned income does not include:

Loans and grants, such as scholarships, obtained and used under conditions that preclude their use for current living costs.
Benefits (other than those that meet the definition of earned income) accruing as compensation, or reward for service, or as compensation for lack of employment (for example, pensions and benefits, such as veterans' benefits).
The training allowances paid to a recipient in the WIA program. The expense allowance paid to an adult WIA participant is applied against the actual expenses of training in determining net income. Only the amount that exceeds the expenses is counted as income.
Income received from Public Service Employment, other than earnings.
Disability based income. Refer to Disability Based Income.
United States Census income to temporary workers.

Room and Board Income or Room Rental

All income from room and board or room rental is considered self-employed income. The actual income received minus any allowable business expenses is counted as earned income to the Assistance Unit (AU). Refer to Self-Employment.

Shared Housing

There is no income counted to the AU when:

The applicant/recipient is in a shared housing situation, and
The other member of the household pays their share of the housing costs directly to the applicant/recipient, and
It is documented that this is definitely a shared housing situation.

Earned Income in Kind

If the recipient is employed and a portion of or all of the compensation from the employer is in the form of income in kind, then the income in kind chart value for that AU size or the actual verified value, whichever is less, shall be considered as part of the gross earnings subject to all work-related disregards, as applicable.

Example Example A customer is the manager of the apartment complex in which she lives. She receives no cash from the owner, but he does not charge her any rent. The average rental cost for the apartments in this complex is $475. The EW must compare the $475 to the chart value of housing for her AU size and would count the lesser of the chart value or the $475 as earned income in the CalWORKs budget.

Example Example A customer is the assistant manager of the apartment complex in which she lives. She receives a rent reduction of $300 monthly; however, she must pay $250 rent for her apartment. In this case, there is no income in kind as she is receiving a partial item of need and does not receive any cash.

Employment Services Income

The only payments currently made to customers under the Employment Services program are reimbursements for training-related expenses, such as:

Child care
Transportation
Special clothing
Books, etc.

These reimbursements are totally exempt, whether paid before or after the fact.

Note: Some customers may be placed in a WIA component. Any income received from WIA will be treated according to the WIA guidelines.

Workplace Rights

Assembly Bill (AB) 2300 requires EWs to provide clients with general information regarding workplace rights, including information relevant to filing a formal complaint with the appropriate state or federal agency, when the client reports:

Refusing any offer of employment,
Reducing work hours,
Voluntarily quitting any employment, or
Being discharged from any employment.

Note: EWs are not expected to provide legal advice or legal services to clients.

Informational Notice about Workplace Rights (SCD 2634)

The SCD 2634 has been developed to comply with AB 2300. EWs must provide the SCD 2634 to clients who report any of the items listed in the section above. This notice includes a list of links, with accompanying language about workplace rights and available remedies when those rights are violated.

To raise awareness of workplace rights and remedies, the SCD 2634 is also proactively distributed to clients via a link on the Informational Notices (SCD 2304), which is included in the Intake and Redetermination (RD) Packets.

EWs must document in the CalSAWS Journal Detail page when the SCD 2634 is provided to clients outside of intake and RD, and the reason why.

Note: The SCD 2634 is for informational purposes only and is not legal advice.