SSA, SSI, or Veterans Benefits

Retirement, Survivor, Disability Insurance (RSDI) (also known as SSA benefits), Supplemental Security Income (SSI), State Supplemental Program (SSP), and Veterans’ benefits are treated as unearned income when received by the Foster Care child and for the family, when making the initial federal eligibility determination.

Important: Effective June 22, 2025, counties may no longer abate Survivor benefits to recoup the costs of foster care. This rule also applies to children receiving AFDC-FC funding in dependent and non-dependent legal guardianship cases. Survivor benefits must be conserved in a dedicated account for children. At Intake, EWs will not count Survivor benefits when making the initial eligibility determination.

The child's eligibility to SSA, SSI or Veterans benefits must be explored if one or both parents are deceased, disabled or the child otherwise appears eligible to these benefits.

Refer to Social Security Administration Benefits in chapter 28 for more details.

General

The AFDC earned income rules which were in effect on July 16, 1996, must be used when determining federal eligibility (linkage) for Foster Care.

Most Foster Care children with earnings meet the “Student Exemption” criteria. If not, the following rules apply.

Note: The following payments are also treated as earned income:

State Disability Insurance (SDI/DIB)
Temporary Worker’s Compensation (TWC)
Temporary Disability Indemnity (TDI) payments. and
Employer provided sick leave benefits.

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

The $30 and 1/3 Disregard rules have changed over time to provide incentive for cash recipients. Foster Care EWs must follow the rules which were in effect on July 16, 1996 when determining federal eligibility. (See additional Rules below.)

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, if the 185% Gross Income Test and FET is passed.	Is NOT used in the CalWORKs Program.
9/1/93 - 12/31/97,	Check to see if 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.a •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.4 consecutive months without an intervening 12-month period when not on aid. 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 are the same for both the Foster Care federal eligibility determination and the AFDC Program during this period.

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.
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.

$30 Disregard

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

Therefore, 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 child care deduction only applies to the federal eligibility determination.

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 child age 2 or older or incapacitated individual, deduct the actual cost up to a maximum $175.
For each child under age 2, deduct the actual cost up to a maximum $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.

Self-Employment Expenses

Allow actual monthly self-employment expenses as a deduction from the gross self-employment income of:

A member of the AU, when determining federal eligibility.
A Foster Care child, if his/her earnings are not otherwise exempted. The “Preliminary Self-Employment Questionnaire” (SCD 1250) may be used, if needed, to determine self-employment income.

Effective 1/1/98, a CalWORKs recipient may choose to provide proof of actual monthly self-employment expenses, or, receive a standard 40% of gross self-employed income as a deduction from their self-employment income.

The 40% deduction is NOT an option for Foster Care. However, when determining federal eligibility for Foster Care (POEM determination), there may be situations where the gross self-employment income of an AU is known, but there is no proof of self-employed expenses.

A 40% self-employed income deduction (from gross self-employment income) may be allowed as a reasonable estimate of self-employment expenses, if proof of self-employment expenses is not available (i.e. not in CalWORKs case, requested from parent, no response).