Lump Sum Income

Lump sum income is defined as any payment received that is nonrecurring in regard to the amount or the source. Any nonrecurring lump sum is to be considered as income in the month it is received.

Treatment

CalWORKs or Supplemental Security Income (SSI) Ineligibility

An applicant/recipient who is ineligible for a federal or state cash program (such as CalWORKs or SSI) due to the receipt of lump sum income will also be ineligible for General Assistance (GA) for the duration of the Period of Ineligibility (POI).

Prior Month's Receipt - APPLICANTS Only

Lump sum income received prior to the month of application will not be counted as income. Any portion of the lump sum income that is remaining on the first of the month following the month of receipt, will be counted as property.

Prior Month's Receipt - RECIPIENTS Only

Recipients who report a lump sum received in the prior month,within ten (10) days of the occurrence will have the lump sum counted in the current month. This information must also be reported via the Semi-Annual Eligibility/Status Report (SAR 7).

An overpayment must be calculated for GA benefits received in the current month if the amount of the lump sum received in the prior month and the GA payment received in the current month totals more than the recipient's need standard for the current month.

Any GA payments anticipated to be received in the current month must also be included in the overpayment calculation if proper notice cannot be given to discontinue the case before the end of the month.

Note: Overpayment calculations are shown in the Payment chapter.

Anticipated Lump Sum Income

Anticipated lump sum income is treated as if it will be received in the future month rather than in the current month.

The Social Services Benefits Specialist (SSBS) MUST enter all information appropriately into CalSAWS and generate and send a timely discontinuance NOA regarding the anticipated excess income.

However, if the anticipated income is not received by the end of the month in which it was anticipated, the discontinuance must be rescinded, and the correct grant issued retroactively.

Shortening the Period of Ineligibility (POI)

The POI that results from the client’s receipt of a lump sum may be shortened only when there is a verified life-threatening situation, such as, but not limited to, fire, flood, etc.

Computations for shortening the client’s POI, due to a life-threatening situation, are determined as follows:

The SSBS will manually add the lump sum income and any other net non-exempt income that was used to compute the period of ineligibility; and
Subtract the amount expended on the life-threatening situation, (verification/receipts required), and enter information into CalSAWS to calculate the new POI and send the appropriate NOA.

Note: Refer to Chewable Byte (CB) 2026-153 for information on how to shorten the POI in CalSAWS.

Example 1Example 1

The April SAR 7 submitted by the client and received in May reported an income tax refund of $700 received in April. No other income was reported, and no other lump sum is anticipated. The need standard is $343.

$700 divided by $343 = 2+ months of ineligibility

Determine the period of ineligibility.

Discontinue the case effective 5/31. The recipient is ineligible for May and June.

2 months multiplied by $343 = $686

Multiply the period of ineligibility by the need standard.

$700 minus $686 = $14 to be applied to July

If the recipient reapplies in July, $14 will be counted as income in addition to any other net non-exempt income in July.

Reminder: An overpayment must be calculated for the amount of GA benefits that client received in May.

Example 2 Example 2

A recipient calls on December 15th to report their Unemployment Insurance Benefits (UIB) appeal has been granted and that they expect to receive a retroactive UIB payment of $900 in back UIB in January. There is no other income at this time; however, the anticipated UIB for the future month is $200. The need standard is $343. The total anticipated income for January is $900 + $200 = $1,100.

$1,100 divided by $343 = 3+ months of ineligibility

Determine the period of ineligibility.

Discontinue the case effective December 31. The recipient is ineligible for January, February, and March.

3 months multiplied by $343 = $1,029

Multiply the period of ineligibility by the need standard.

$1,100 minus $1,029 = $71 to be applied to April

If the recipient reapplies in April, $71 will be counted as income in addition to any other net non-exempt income received in April.

Example 3Example 3

On May 3, a client called to report an income tax refund of $1,500 received on May 3. No other income was reported, and no other lump sum is anticipated. The need standard is $343.

$1,500 divided by $343 = 4+ months of ineligibility	Determine the period ineligibility. Discontinue the case effective May 31. The recipient is ineligible for June, July, August, and September.
4 months multiplied by $343 =$1,372	Multiply the period of ineligibility by the need standard.
$1,500 minus $1,372 = $128	If the recipient reapplies in September, $128 will be counted as income in addition to any other net non-exempt income received in September.

On May 15, the client reported that a fire occurred on May 7. The residence was deemed uninhabitable. The client lost their clothing, bedding, and a bicycle and provided verified expenses as follows:

Replacement items: $400
Motel stay for May 7-May 13: $600
Deposit for new rental room: $100
May rent for the new rental room: $300.

$400 + 600 + 100 + 300= $1,400	Determine the total verified, alloowable expenses.
$1,500 - $1,400 = $100 remaining countable incomex.	The SSBS must manually subtract verified expenses spent on the life-threatening situation from the lump sum originally used to compute the POI.

The POI will end and the discontinuance will be rescinded. The $100 remaining income will be counted as income in addition to any other net non-exempt income received in June.