Treatment of CAPP payments for various programs

The California Department of Social Services (CDSS) has issued guidance to County Welfare Departments (CWDs) regarding treatment of California Arrearages Payment Program (CAPP) payments issued to California assistance program applicants and recipients to help pay eligible past due energy bills that increased during the COVID-19 pandemic

CAPP payments do not count as income when determining eligibility and/or grant amount for the CalWORKs program and do not count against the resource limit for the 12 months after receipt of payment. Furthermore, CAPP authorized payments are not considered in-kind income for CalWORKs recipients.

For both CalFresh and the California Food Assistance Program (CFAP), CAPP payments are considered third-party payments that are not owed to the household and therefore are not counted income. CAPP payments are not considered resources for CalFresh and CFAP.

For Modified Adjusted Gross Income (MAGI) Medi-Cal, CAPP payments are treated as a qualified disaster relief payment similar to other disaster payments that the IRS exempts from gross income. This means that CAPP payments are not counted in the MAGI Medi-Cal eligibility determination. For Non-MAGI Medi-Cal, CAPP payments are considered exempt disaster and emergency assistance and do not count as income or a resource.

CAPP payments do not count as income for the Cash Assistance Programs for Immigrants (CAPI), because they are considered to be a tax refund. CAPP payments do not count as a resource for CAPI for the 12 months after the payment is made.

RCA, ECA, and TCVAP programs do not count CAPP payments as income and do not count as a resource limit for 12 months after receipt of the payment because their programs use the same rules as CalWORKs. (ACL 22-83, October 21, 2022.)

Treatment of Better for Families Tax Refund, and the Young Child and Foster Youth Tax Credits

The California Department of Social Services (CDSS) has issued guidance for various programs about the treatment of Better for Families Tax Refund, and the Young Child and Foster Youth Tax Credits.

AB 192 established the Better for Families Tax Refund program, called the middle-class tax refund. SB 201 expanded the definition of a qualified taxpayer to include taxpayers with no earned income and those in foster care between the ages of 18 and 25.

The CalWORKs program treats the Better for Families Tax Refund the same as the federal earned income tax credit. It does not count as income and does not count as a resource for 12 months.  Refunds from the Young Child and Adopted Youth Tax Credit are treated the same as federal earned income refunds and do not count as income, and do not count as a resource for 12 months.

CalFresh and the California Food Assistance Program do not count either the of Better for Families Tax Refund, or the Young Child and Foster Youth Credits as income. CalFresh and the California Food Assistance Program counts them as a resource beginning in the month received. However, most households are in California are not subject to a resource limit because they have either Categorical Eligibility or Modified Categorical Eligibility.

The Better for Families Tax Refund does not count as income for Medi-Cal Modified Adjusted Gross Income (MAGI) applicants or recipients. It will be considered property for non-MAGI Medi-Cal recipients.  Counties are reminded that the property limit for non-MAGI Medi-Cal is now $130,000 for one person and $65,000 for each additional person.

The Department of Health Services (DHCS) is seeking a federal waiver to exempt the Young Child and Foster Youth Tax Credit from being treated as income.

The CalWORKs program rules apply to RCA, ECA, and TCVAP programs, and they must follow the CalWORKs rule above both the Better for Families Tax Refund, and the Young Child and Foster Youth Tax Credits.

The Cash Assistance Program for Immigrants (CAPI) treats both the Better for Families Tax Refunds and the Young Child and Foster Youth Tax Credit in the same way as federal earned income refunds, and federal tax refunds are excluded from counting as income and from the resource limit.  (ACL 22-91, October 28, 2022.)

Reclassifying CalWORKs overpayments during COVID as IPVs

The California Department of Social Services (CDSS) has issued a clarification that CalWORKs overpayments established during COVID which were originally classified as administrative error must be reclassified as Intentional Program Violation (IPV) if the overpayments are later determined to be fraudulent.

CalWORKs overpayments established on or after August 1, 2021 for the period April, 2020 to or June 30, 2022, must initially be classified as administrative error. However, based on Welfare and Institutions Code section 11004.1, as amended by Senate Bill (SB) 187 (Chapter 50, Statutes of 2022), any of these claims can now be reclassified to IPV if they are later determined to be fraudulent.

Existing processes for issuing adequate and timely notice of action, referring cases to Special Investigations Unit (SIU), and IPV determination are unchanged.

This rule also applies to Refugee Cash Assistance (RCA), Entrant Cash Assistance (ECA), and Trafficking and Crime Victims Assistance Program (TCVAP) cash assistance programs.  (ACL 22-87, October 17, 2022.)

CalWORKs Home Visiting Program increase in material goods payment limit

The California Department of Social Services (CDSS) has informed counties participating in the CalWORKs Home Visiting Program (HVP) of an increase in the material goods fund limit from $500 to $1,000 beginning July 1, 2022. The funds may be spent on multiple items throughout the family’s participation in the HVP. Families currently enrolled in the program who have reached the $500 material goods limit may receive an additional $500 in material goods if they are eligible because the, $1,000 limit is cumulative per case.

Counties should coordinate with home visitors and CalWORKs staff for the distribution of funds for each family served by HVP. The material goods fund is to be used to remove barriers for vulnerable enrolled families and help support family stability. Not all needs will fall into the scope of this. Still, if a need is identified by the home visitor in a participating county, the material goods funds should be offered to eligible families. These funds cannot be used to supplant services already being provided through Welfare-to-Work supportive services, such as, diapers and transportation.

Counties and their contracting agencies must collaborate to establish the process of issuing the material goods funds and have the flexibility to decide how to track the payments of the material goods. CDSS recommends tracking the payments of the material goods in CalWORKs case documentation or the HVP monthly data reporting. CDSS also encourages counties and their subrecipient and/or contractor to make a reasonable effort to track aggregate information on the usage of these funds for ease of reporting and future program improvements.  (ACL 22-86, October 15, 2022.)



CalWORKs WTW counting of self-employment time

On October 1, 2022, the Welfare-To-Work (WTW) changes adopted by Assembly Bill (AB) 461 (Chapter 582, Statutes of 2021) came into effect.  AB 461 changes how self-employed hours are calculated for a CalWORKs WTW member. Starting October 1, 2022, self-employment participation hours are calculated based on the number of hours the participant self-reported as being self-employed. These hours may be reported verbally, through a written self-assessment, timesheet, estimated hours for previous months, a business plan, or other means.

Counties can no longer requires participants to report their income to determine hours of participation in self-employment, and WTW participants may self-report any hours spent on activities related to their business to meet hourly requirements. In the case of non-subsidized employment, the participant may be self-employed if they have the income to support the hours, otherwise, they will follow the regular WTW stream to participate in self-employment. WTW participants who are self-employed as salespeople count all hours spent promoting their business or trying or contacting potential or actual customers as hours worked.

If the participant’s business is not generating income, the County should discuss what the business needs to be successful so that the member can support their family and reduce the need for support. Clients interested in becoming self-employed can explore the CalGOLD website to learn more about required licenses, permits, forms, and fees.

WTW participants must comply with all of the same applicable business licensing, permits, and tax reporting requirements as any other business operating in their locality. For more information, they should visit the California Department of Revenue website.

The county does not need to verify that WTW participants have received all legally required business documents or documents to conduct their business. Self-employment and support services are available to as needed for self-employed participants. Counties are encouraged to provide case management for self-employed members.

The CalWORKs County Plan and regional market rates govern transportation. Members may use their own vehicles if public transportation is not available, but the county cannot set a limit on monthly reimbursement.

Counties may provide the tools, clothing, fees, etc. that the participant needs to run their business as supportive services.  Licensing, permitting, and other fees and expenses necessary for self-employed participants to comply with local operating requirements are allowable as an ancillary supportive service. However, counties are not required to pay all of the participant’s expenses when starting the business. Counties may consider renting or leasing equipment to meet member needs if purchasing equipment is too expensive.

Self-employed participants may deduct 40 percent of their gross self-employment income, or reasonably anticipated self-employment expenses, from their gross income when determining eligibility and at each re-determination.

While limiting necessary support services is prohibited, counties may require a secondary review by a supervisor prior to issuing a supportive services payment.

MPP Section 42-750.42 requires county to inform members of changes to transportation arrangements and additional ancillary services at least ten calendar days in advance of the proposed change, except in emergencies or exceptional situations.

CalWORKs calculates work participation rates based on self-employment income divided by the federal minimum wage. Additional activities outside regular business hours are reported accordingly, depending on the type of activity.

For income reporting, CalWORKs recipients must report income during the semi-annual reporting period, annual redetermination, or any time their income exceeds the income reporting threshold.  (ACL 22-80, October 14, 2022.)

Treatment of Racial Equity Implicit Bias Initiative focus group payments

The California Department of Social Services (CDSS) has provided guidance to County Welfare Departments regarding treatment of the Racial Equity and Implicit Bias (REIB) Initiative focus group payments. The focus groups will provide a unique client perspective and equity challenges.

CDSS is working with community partners to develop a trauma-informed, anti-racist, anti-stigma county training framework for the CalWORKs and CalFresh programs. This framework will promote positive outcomes for child and family health and well-being.

Community partner Parent Voices is working with consultant Anavo Solutions to convene a Community Advisory Committee comprised of nine community members. Participants in the Parent Voices Community Advisory Committee (PV-CAC) will receive a $1,000 stipend. The PV-CAC will operate and support a focus group of CalWORKs and CalFresh recipients.  Members of this focus group will receive $75 gift cards.

The $1,000 stipend is considered a lump sum payment and not income for CalWORKs or CalFresh.  The $1,000 stipend is a resource in the month received.  The $75 gift card is exempt from being considered a resource.

For CalFresh households subject to a resource test, both the $1,000 stipend and the $75 gift card count as a resource in the month received.

The PV Focus Group $75 Visa gift card is not countable as income for Modified Adjusted Gross Income (MAGI) Medi-Cal and Non-MAGI Medi-Cal. The $1,000 stipend would be counted as taxable income for MAGI Medi-Cal, which means it is counted in the month received as a one-time lump sum payment. (September 20, 2022)  For Non-MAGI Medi-Cal, the $1,000 payment is income in the month received and property in the month following the month of receipt.  (ACWDL, September 20, 2022.)