Federal Eligibility / Income Determination

Background

Due to PRWORA of 1996 and state welfare reform, when determining federal eligibility for Foster Care children removed on or after July 1, 1997, EWs must use BOTH:

The following AFDC budgeting rules which were in effect on July 16, 1996 to determine the parent(s’)/caretaker relative’s countable income in the month the petition was filed or the voluntary placement agreement was signed, AND
The MBSAC, 185% of MBSAC and MAP levels as of July 16, 1996 to determine if they “would have been eligible for AFDC”.

Income Tests

When determining federal eligibility for Foster Care, the AU must pass BOTH the:

185% of MBSAC Income Test, AND
Financial Eligibility Test (FET).

EWs must use the “AFDC-FG/U Worksheet” (FC 3A) for budgeting.

Standard Work Expense (SWE)

Deduct $90 from the gross earned income of each recipient who is employed in the month the petition was filed.

$30 and 1/3 Disregard

Changes in $30 and 1/3

The $30 and 1/3 Disregard rules have changed over time to provide work incentives for cash aid recipients. Foster Care EWs must follow the rules which were in effect on July 16, 1996 when determining federal eligibility. If otherwise eligible, the $30 and 1/3 disregard is limited to 4-consecutive months, without an intervening 12-month period when not on aid. Also see additional $30 and 1/3 “Rules” below.

The following chart will assist EWs in determining if the $30 and 1/3 can be applied to earnings in the month of petition.

IF the petition being used was filed...	The Foster Care EW must...	Because the $30 and 1/3 Disregard...
1/1/98 or later,	Apply the $30 and 1/3 disregard to earned income.	Is NOT used in the CalWORKs Program.
9/1/93 - 12/31/97,	Determine whether the $30 and 1/3 has already been received for 4 consecutive months without an intervening 12-month period when not on aid. If YES, do not allow.* If NO, allow.	4-month time limit was eliminated in the AFDC Program during this period. FC EWs must continue to follow old, 7/1/96 AFDC rules.
Prior to 9/1/93, (FYI only)	If otherwise eligible, apply the $30 and 1/3 unless it has already been received for 4 consecutive months without an intervening 12-month period when not on aid.*	Rules are the same for both the Foster Care federal eligibility determination and the AFDC Program during this period.

Note: *When an AU has already received 4-consecutive months of $30 and 1/3, AND, the month of petition is within the 8-consecutive months following the 4-month period, allow the $30 disregard.

Rules

For EACH adult in the AU with earnings (and child with earnings who is not eligible for the Student Exemption), deduct $30 from the amount remaining after deducting the $90 SWE, then deduct 1/3 of the remainder, if otherwise eligible for this disregard. The $30 and 1/3 disregard is limited to 4 consecutive months.

The $30 and 1/3 is NOT allowed when:

The 185% gross income test is being computed.
The person who earned the income has already received the $30 and 1/3 disregard in any AU for 4-consecutive months without an intervening 12-month period when he/she was not on aid.

Reminder: Receipt of RCA or Medi-Cal only is NOT considered receipt of AFDC.

Note: If cash aid is suspended or discontinued because of a periodic extra paycheck from recurring income, the month of suspension/discontinuance does not count as one of the consecutive months and does not interrupt the accumulation of the 4-consecutive months.

For applicants (intake), the applicant must be eligible without the $30 and 1/3 disregard (for the Financial Eligibility Test), before it can be applied to their earnings.

Exception: If the person with earnings is in the AU and has received aid (from any state) in one of the preceding 4 months, the $30 and 1/3 disregard is allowed when computing the FET.

The recipient is being sanctioned for failure to return the QR 7 in a timely manner.
The recipient terminated employment, reduced earned income or refused employment without good cause within the budget period or the 30 days immediately prior to the budget period.

$30 Disregard

Old AFDC rule: When an AFDC recipient had received the $30 and 1/3 disregard in any AU for 4-consecutive months, they were eligible for a $30 disregard for 8-consecutive months immediately following the end of the 4-consecutive month period.

For the purpose of the Foster Care federal eligibility determination, when an AU has received 4 consecutive months of $30 and 1/3, AND, the month of petition is within the 8 consecutive months following the 4-month period, allow the $30 disregard.

Child Care

The reasonable and necessary costs of child care or care of an incapacitated adult in the AU may be allowed when the EW determines that dependent care cannot be provided during the individual’s working hours, by someone in the AU.

For EACH	Deduct actual cost up to a MAXIMUM of
Child age 2 or OLDER (or incapacitated person)	$175
Child UNDER age 2	$200

Note: Effective 1/1/98, child/dependent care is no longer a separate deduction in the CalWORKs Program. Foster Care EWs, therefore, will need to ask if a parent with earnings paid for child care in the month of petition.

185% Test

If the total reported or estimated gross income plus any income deemed to the AU in the month of petition exceeds 185% of MBSAC plus any Special Needs available to the AFDC-AU, there is NO federal eligibility. Do NOT compute the FET.

Note: “Special Needs” (above) does NOT refer to a Foster Care special rate paid for the needs of a Foster Care child.

When determining gross income of the AU, include ALL of the following:

Gross earnings from employment
- Do NOT allow the $90 SWE, the $30 and 1/3 disregard, or the dependent care deduction when computing the 185% Test
Net self employment earnings (deduct business expenses)
Child Support (minus the $50 disregard)
Gross earnings of all children, including students, once their 6-month student exemption is used up
Income deemed to the AU, including but not limited to, income from a stepparent, senior parent, ineligible alien parent, etc.
Any other non-exempt income of persons in the AU or persons whose income must be counted towards the AU, including persons excluded for cause, sanctioned

To compute the 185% Test, follow these steps:

Determine the GROSS self-employment income.
Subtract all allowable business expenses to determine NET self-employment income.
Add to the net self-employment income (from Step 2), any other gross earned and unearned income, including deemed income. This equals total income to the AU. IMPORTANT:
1. Do NOT allow the $90 Standard Work Expense (SWE) or the $30 and 1/3 Disregard.
2. Do NOT allow the Child/Dependent Care Deduction.
3. Allow the $50 Child Support Disregard, if applicable.
4. Deduct court ordered child support if it is actually being paid by someone in the AU.
5. Do NOT count exempt or excluded income.
Compare the total remaining income in Step 3 with 185% of MBSAC: Note: Include any AFDC Special Needs if applicable.
1. If the income exceeds 185%, There is no AFDC eligibility for the AU. Establish non-federal Foster Care.
2. If the income equals or is less than 185%, compute Financial Eligibility Test.

Financial Eligibility Test (FET)

If the AU passes the 185% Test, then determine financial eligibility in the month of petition, either using actual or estimated income based on the preponderance of evidence. When actual or estimated income exceeds MBSAC plus any Special Needs available to the AFDC-AU, there is NO federal eligibility.

Note: “Special Needs” (above) does NOT refer to a Foster Care special rate paid for the needs of a Foster Care child.

To determine if the Foster Care child’s parent(s) / caretaker relative passes the FET, the EW shall follow these steps:

Determine the total gross income from employment.
Add any net income self-employment income (gross self-employment income minus allowable business expenses) from Step 2. The total from Step 1 and Step 2 equals Total Earned Income.
Subtract the following deductions, as appropriate, to determine the net non-exempt earned income.
1. $90 standard work expense disregard from the earned income of each employed person.
2. $30 and 1/3 disregard from the earned income of each employed person, if otherwise eligible for it.
3. Child/Dependent Care costs (up to $175 for each child age 2 or older or incapacitated person; up to $200 for each child under 2).
4. This will equal the net nonexempt earned income.
5. The remainder equals net earnings.
Add any nonexempt unearned income, including deemed income.
1. This total equals the net nonexempt income of the AU.
Compare the amount in Step 4 to MBSAC for the AU. Note: Include any AFDC Special Needs if applicable.
1. If the net nonexempt income is equal to or greater than MBSAC, there is NO AFDC eligibility for the AU. Establish non-federal Foster Care.
2. If the net non exempt income is LESS than MBSAC, there is federal eligibility for Foster Care.

AFDC Income In-Kind Standards

Effective 7/16/96

Use this chart when determining federal eligibility for Foster Care/AAP, and the AU received income in-kind in the month of petition.

Number in Assistance Unit	Housing	Utilities	Food	Clothing
1	$163	$34	$90	$27
2	218	39	192	53
3	238	42	246	79
4	250	44	302	105
5	250	44	365	133
6	250	44	424	159
7	250	44	473	188
8	250	44	517	210
9	250	44	568	240
10	250	44	614	263
More than 10	250	44	614	263

EAS Reference: 44-115.311

Minimum AFDC-FG/U Basic Standard of Adequate Care (MBSAC), 185% of MBSAC and MAP Levels