Income Reporting Threshold (IRT)

[EAS 44.316.324]

CalWORKs recipients subject to SAR and 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 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 SAR and AR/CO rules. If any member of the AU or any member of the Family MAP (including certain excluded persons) has earned income or begins receiving earned income, the 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 - 55% of the FPL for a family of three, plus the amount of income that was last used to calculate the AU's monthly benefits, or
Tier 2 - 130% of the Federal Poverty Level

Income that must be reported for IRT purposes includes income that is required to be reported for penalized, excluded and timed-out individuals, as well as the income of persons not in the AU who were included in the determination of income eligibility and grant amounts.

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.

IRT Reporting Requirements

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.
Earned income only or a combination of earned and unearned income,	The AU's total income exceeds the IRT. Note: The AU's total income includes income from AU and non-AU members.
Unearned income only (including disability-based unearned income),	They receive earned income that, once combined with unearned income, exceeds IRT. Note: AUs with unearned income only, are NOT required to report when that income by itself exceeds the IRT mid-period.

Note: Recipients may report nonrecurring lump sum income when it exceeds the IRT by itself or in combination with other AU income. However, recipients are not required to report nonrecurring lump sum income mid-period, as nonrecurring lump sum income is to be treated as property in the month received and any subsequent months.

Important: It is not mandatory for an AU to report mid-period when a new AU member (who has not been added to the AU) has income in excess of the IRT if that person was not included in the current AU or Family MAP for the current SAR Payment Period.

Continuing Financial Eligibility Test

When income exceeds the IRT limit, the EW MUST determine if the AU remains financially eligible for CalWORKs.

Apply applicable income exemptions and disregards to the total reported income to calculate Net Nonexempt Income (NNI). When NNI exceeds the Tier 2 IRT level, the AU is financially ineligible for CalWORKs.

If income exceeds the IRT level...

Then the EW will...

And is expected to continue at the same level in future months, and
NNI exceeds the Tier 2 IRT level,

Discontinue the case at the end of the month in which a timely and adequate NOA can be provided.

Note: If there is no time for a timely NOA, the CalWORKs benefits MUST be issued at the previous level and the EW MUST NOT establish an overpayment.

Important: If the AU reports that the income will no longer exceed the IRT prior to the effective date of the discontinuance, and the EW determines that this is reasonably anticipated, the discontinuance must be rescinded.

But is only expected to exceed the IRT level for that one month,

NOT take action to discontinue the case.

ExampleExample

An AU of 3 reports reasonably anticipated gross earned income of $2,800 a month.

$2,800 (Gross Earned Income)

-$600 (Remainder of DBI Disregard)

$2,200 (Subtotal Earned Income)

-$1,100 (50% Earned Income Disregard)

$1,100 (NNI)

1,171 (MAP for AU of 3, Region 1, Non-Exempt)

-$1,100 (NNI)

$71 CalWORKs Monthly Grant Amount

The AU remains financially eligible for CalWORKs since the NNI of $1,100 is less than $2,694 (Tier 2 IRT for an AU of 3).

Informing Recipients of Their IRT

The informing notice that provides the IRT limits must be individualized for each AU using the “Reporting Changes for Cash Aid and CalFresh” (SAR 2 or AR 2 SAR) form. The AU must be informed at Intake and at least once per SAR Payment Period or AR/CO Payment Period, or whenever the AU’s 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.

IRT Reporting

When income in excess of the IRT is reported, the EW must determine if the AU remains financially eligible for benefits and if so, recalculate the grant amount for the remainder of the SAR or 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 SAR 2 or AR 2 SAR required forms. 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.

If a recipient reports income that exceeds the IRT, a determination is required as to 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.

Important: Current Income Disregard and MAP values must be used in calculations. Income Disregard and MAP values in the examples below may not reflect current values.

Example 1Example 1

An AR/CO non-exempt family of 4, AU of 3, with no income. Their current IRT is $1,184 (55% of the current FPL). Mom reports mid-period she got a new part-time job and expects to receive $500/month.

Determine if the reported income ($500) is over her current IRT amount ($1,184). Benefits are not reduced since the monthly anticipated income is lower than IRT amount and a No Change NOA must be issued.
Calculate the new IRT amount for the next SAR or AR/CO payment period as follows:

$500 (income)

+1,184 (55% of the FPL for a AU of three)

$1,684 (Tier 1)

The Tier 1 amount must be compared to the Tier 2 amount to determine the lesser.

The AU’s new IRT is $1,684, the lesser of Tier 1 and Tier 2. A SAR 2 or AR 2 SAR with the new IRT amount must be sent to the AU.

Example 2Example 2

A SAR non-exempt AU of 4, with earnings of $800 per month. Their current IRT is $1,984 (55% of the current FPL $1,184 plus current income of $800 per month). Mom reports mid-period she got a new job and expects to receive $2,000/month.

Determine if the reported income ($2,000) is over the current IRT amount ($1,984). Because the income is over the IRT, benefits would be recalculated.
Redetermine benefits for the remaining months in the SAR period.

$2,000 (income)

-600 (earned income disregard)

$1,400

-700 (50% of $1,400)

$700 (total NNI)

$1,416 (MAP for AU of 4)

-$700 (total NNI)

$716 (CalWORKs grant amount)

Although the recipient was over the IRT, she remains eligible for CalWORKs benefits.

Calculate the new IRT amount as follows:

$2,000 (income)

+$1,184 (55% of the FPL for a family of three)

$3,184

The Tier 1 amount ($3,184) must be compared to the Tier 2 amount (Tier 2 for an AU of four is $3,380) to determine the lesser of the two. A SAR 2 or AR 2 SAR with the new IRT amount must be sent to the AU.

The AU’s new IRT is $3,184, which is the lower of the two Tiers.

Zero Basic Grant (ZBG)

When the NNI exceeds MAP but remains below the Tier 2 IRT level, the AU may remain eligible for supportive services and/or CalWORKs special needs with a ZBG.

A ZBG also occurs when an AU is considered to have received a cash aid payment even when:

The payment is not sent due to a penalty which reduced the payment to zero,
The grant amount is less than $10,
The grant for the AU is reduced to zero to adjust for a prior overpayment, or
The grant based on On-The-Job Training is diverted to the employer as a wage subsidy to offset the participant’s wages.

Benefits of a ZBG case, provided all eligibility requirements are met, include:

Housing and Homeless Assistance;
WTW supportive services including transportation assistance;
CalWORKs Stage 1 Child Care;
Pregnancy and other recurring and non-recurring special needs;
Home Visiting Program services; and
Eligibility to CalFresh and cash-linked Medi-Cal.

Cases with a ZBG must adhere to the same reporting requirements as cases receiving a cash grant. Any changes to household circumstances, including the addition of a new member or changes in income, made outside of the SAR 7 and annual redetermination processes, are treated as mid-period reports and would not require a reapplication of aid. ZBG recipients may request discontinuance at any time.