County of San Diego Health and Human Services Agency HHSA CalWORKs Program Guide Countable Income of the Assistance Unit Number 44100I Page 1 of 3 Revision Date April 23 2020 Background State regulations require all nonexempt income to be counted towards the cash grant Purpose The purpose of this section is to provide regulations on how to calculate Net Nonexempt Income NNI Income disregards are allowed for certain DisabilityBased Income DBI and other earned income for determination and computation of the NNI The purpose of this revision is to incorporate changes to the income disregard threshold to transfer NNI computation procedures to a processing guide and to reformat this section Policy Income Disregard The income disregard which is allowed per AU not per individual first exempts up to the threshold amount refer to the appropriate Income Disregard Amount section below of any DBI received The remaining balance of the threshold amount is used as a disregard for any earned income then 50 of the remaining earned income is disregarded Income Disregard Amount Allow the following amounts as income disregard 225 through May 2020 ACL No 1342 Refer to Processing Guide 44100I for any month during July 2011 and September 2013 ACL No 1129 500 effective June 2020 ACL No 1976 550 effective June 2021 ACL No 1976 600 effective June 2022 ACL No 1976 Calculation of the Net Nonexempt Income NNI The NNI that is used to determine the Assistance Units AU grant by subtracting the NNI from the AUs Maximum Aid Payment MAP is calculated as follows If the AUs DBI is less than the income disregard amount all the DBI is disregarded and the unused amount of the income disregard amount plus 50 of the remaining earned income is disregarded Any remaining earned income is treated as part of the AUs NNI If the AUs DBI exceeds the income disregard amount only the income disregard amount is disregarded from the DBI plus 50 of any earned income is disregarded Any remaining DBI and remaining earned income is treated as part of the AUs NNI If the AU has earned income only the income disregard amount is disregarded from the earned income plus 50 of the rest of the earned income is disregarded Any remaining earned income is treated as part of the AUs NNI Add any remaining DBIearned income from the calculations above to any nonexempt unearned income of both the nonAU and AU members The sum equals the NNI Refer to Processing Guide No 44100I for procedures and examples County of San Diego Health and Human Services Agency HHSA CalWORKs Program Guide Countable Income of the Assistance Unit Number 44100I Page 2 of 3 SelfEmployment Income Selfemployed customers can choose as a business expenses deduction either A standard 40 of gross income Actual verified expenses Once the selfemployed person chooses the customer cannot change the method until renewal or every six months whichever occurs first 40 Disregard Selfemployed customers who choose the 40 disregard will be allowed a 40 disregard on gross selfemployed income Actual Expense Allowable business expenses include but are not limited to Identifiable costs of labor Stock Raw material Interest paid to purchase income producing property Insurance premiums Taxes paid on income producing property The following are not allowed as a business expense Payments on the principal of the purchase price of income producing real estate and capital assets Equipment Machinery Other durable goods Net losses from previous periods Federal state and local income taxes Money set aside for retirement purposes Other workrelated personal expenses ie transportation to and from work and depreciation To determine the disregard deduct the allowable business expenses from the gross income including capital gains Income Averaging Selfemployment income received less often than monthly which represents the AUs annual income is to be averaged over a 12month period even if the AU receives income from other sources Selfemployment income that is intended to meet the AUs needs for only part of the year is to be averaged over the period of time the income is intended to cover For the period of time over which selfemployment is averaged add gross selfemployment income including capital gains exclude the cost of producing the selfemployment income and divide the selfemployment income by the number of months the income is to be averaged County of San Diego Health and Human Services Agency HHSA CalWORKs Program Guide Countable Income of the Assistance Unit Number 44100I Page 3 of 3 Room and Board Payments Payments made to customers for room and board are considered selfemployment income Garnishment of Wages Money deducted from a customers wages as a result of garnishment is not allowed as deduction Reception and Placement RP Cash RP CashVoluntary Agency VOLAG funds may be considered resources or unearned income depending on how they are disbursed Funds given to the AU as a nonrecurring onetime lump sum payment or issued in more than one payment in the same month are counted as a resource Funds given to the AU in several payments in more than one calendar month are counted as unearned income in the month received even if disbursed as vendor payments The income will be anticipated according to the appropriate ReportingBudgeting regulations Examples If RP income is received Nonrecurring one time lump sum payment Multiple payments in the same month Multiple payments over multiple months Then count as Resource Resource Unearned Income Procedure Processing Guide No 44100I Computation of Net Nonexempt Income NNI Impacts Refugee Cash Assistance RCA And Trafficking and Crime Victims Assistance Program TCVAP CalWORKs regulations relating to financial eligibility and payments apply to RCATCVAP unless specifically superseded by RCATCVAP regulations which exempt specific income and resources from the income eligibility determination References Eligibility and Assistance Standards EAS 44315 44316 All County Letters ACL No 1129 1342 1976 Sunset Date This policy will be reviewed for continuance by April 30 2023 Rick Wanne Director Eligibility Operations