04 DeterminingFamilySize En

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Determining Family Size and IncomePurpose

This chapter outlines the steps necessary to determine who is counted in the family size andhow to estimate the familys income. A sample income calculation worksheet to be used inscreening for the familys income is provided at the end of this chapter on pages 4-44 and 4-45.

Steps to Determine Family Size and Income

There are several steps in determining the family size and income. Because of the FederalIncome Guidelines (FIGs), ages of the children, and financial responsibility (whose income iscounted for whom), children in the same family may qualify for different programs.

There are five basic steps in determining family size and income

1. Determine the family size2. Determine the income that is received by each family member

3. Determine the gross monthly income for each family member4. Determine the deductions for each child and pregnant woman5. Determine the net monthly income for each family member

Manipulation, incorrect reporting of family size and/or income, or splitting families such asputting each child on a separate application, is considered fraudulent behavior and is groundsfor termination of the Certified Application Assistant (CAA) number and certificate.

NOTE: CAAs are not eligibility workers or eligibility specialists. The final eligibility determinationis made by the Healthy Families Program (HFP) and no-cost Medi-Cal Childrens PercentProgram.

Chapter 4 4-1Determining Family Size and IncomeRev. 04/2013


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Step 1: Determine the Family Size

In order to be counted in the family size, persons must live in the home (with the exception ofchildren under age 21 who are away at school and claimed as tax dependents). Only theincomes of those people counted in the family size are considered.

Who counts in the family size?

Parents (married or unmarried) Spouses/stepparents Children (full, half and stepsiblings) under age 21 Children (full, half and stepsiblings) under age 21 who are away at school and claimed

as tax dependents Unborn children of any family member

Who does not count in the family size?

Caretaker relatives such as grandparents or other relatives Legal guardians or foster parents Recipients of most forms of public assistance (i.e., Supplemental Security Income /State

Supplementary Payment (SSI/SSP), CalWORKs, or Emergency Assistance) The unmarried father of an unborn child if he has no other children with the pregnant

woman Roommates, friends, and others

NOTE: Absent parents (natural or adoptive) may apply for the HFP for their children who do notlive with them. An absent parent cannot apply for the no-cost Medi-Cal Childrens PercentProgram for their children who do not live with them. The absent parent is the applicant, but thefamily size and income used would be from the household in which the children reside. The

absent parent would not be counted in the family size and their income would not be counted.See Chapter 7, Healthy Families Program, for more information about absent parents applyingfor the HFP.



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Step 1: Determine the Family Size

When determining family size it can be helpful to diagram the family members and theirrelationships to each other.

The symbols used for family members are listed below with some common examples.

Family Size Diagrams

Woman

Man

Child

Pregnant Woman (Counts as 2)

Married

Parent/Childrelationship

Family Size = 3 Family Size = 3 Family Size = 4

Family Size = 3 Family Size = 3 Family Size = 2

Caretaker

NOTE: Diagramming can also be useful when determining whose income is counted for whom.



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Step 2: Determine the Income that is Received by Each Family Member

Families may have many different sources of income, which may include earnings from a job,retirement, child support, and public assistance. Not all of these forms of income are counted orused when calculating family members income.

There are three types of income to consider:

1. Income that is counted2. Income that is not counted3. Income that is excluded (i.e., most forms of public assistancethe income or

services from public assistance is not counted and the family members whoreceive this type of income are not counted in the family size)

The following table describes the types of income that are counted and what documentation isrequired.

Income That is Counted

There are two types of income that are counted earned income and unearned income.Earned income is earnings from a job including cash, wages, salary, commissions, tips, orunder the table (untaxed) income. Earned income also includes job earnings of a child over age14 who is not going to school. Unearned income includes retirement or social security benefits,disability, unemployment, gift money and child support or alimony.

The table below describes the types ofearned income and the required documentation.

INCOME DOCUMENTATION INSTRUCTIONS

Non-self employedwages

Copy of pay stub

Note: If the employer does notwithhold taxes, the employee is considered tobe self-employed. See Self-Employment Net Profi ts formore information.

The pay stub must be for a payperiod ending within the last 45 daysof when the application is received atSingle Point of Entry (SPE)

The name of the person or otheridentifying information must be on thepay stub to link the person to the paystub.

Non-self-employedwages

Previous years Federal TaxForms 1040, 1040A, 1040EZ,1040NR, 1040PC, 1040Xw/original 1040 from previousyear, 1040 w/Schedule E.

Previous years Federal Tax Formsor an e-file printout of these forms isacceptable. This is helpful when afamilys income changes during theyear. See pages 4-29 through 4-35for samples.


Employer letter An employer statement on theemployers letterhead or with thename, address, and phone number ofthe company stated on the letter for a



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period ending within the last 45 daysof when the application is received atSPE.

The letter must include:

Name of the person employed Date of letter Pay frequency Gross earnings amount Signature of employer Signed statement stating The

information provided is true andcorrect to the best of myknowledge or somethingsimilar.

See page 4-38 for a sampleemployer letter. A sample employerletter is also available on the HFPwebsite at the link below.

http://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/SampleEmployerLetter_en.pdf


Self Affidavit An affidavit can be submitted if theperson receiving the income cannot

document their income in any otherway.

The affidavit must include:

Name of the person claiming theincome

Dated letter Date income was received and

the pay frequency Declaration that no other proof

of income is available Declaration that the information

provided is true and correct Acknowledgement that he/she

understands the information inthe letter is subject toverification by the state

Signature of person claiming theincome

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Signature of person claiming theincome must be legible

Handwritten, unless applicant isunable to write due to literacy ora physical limitation. If so, itmay be typed and applicant maysign with an X. The printedname and signature of thewitness must be included in thissituation.

See page 4-39 for a sample affidavit.A sample self affidavit is alsoavailable on the HFP website at thelink below. The sample affidavit isstrictly an example and is not to besubmitted as proof of incomedocumentation.

http://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/SampleSelfAffidavitLetter_en.pdf

Self-employed netprofits

Previous years Federal TaxForm 1040 and Schedule CProfit or Loss From Businessor Schedule C-EZ, 1040Xw/original 1040 & Schedule C

form.

Note: Self-employed personscannot use affidavits.

Previous years Federal Tax Formsor an e-file printout of these forms isacceptable.

Depreciation and entertainment and

meals are added back to the netincome.

See pages 4-29 and 4-30 forsamples.

Self-employed netprofits

Profit and Loss Statement A profit and loss statement must befor the most recent completed threemonths prior to the date theapplication is submitted. If theperson submits a Profit and LossStatement for less than three months,

it must also include information onwhen the business began operation.The months reported will be addedtogether and divided by the numberof months to calculate the monthlyincome.

Depreciation and entertainment and

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meals are added back to the netincome.

See pages 4-36 and 4-37 for asample profit and loss statement orconsult a tax advisor for instructionson preparing a profit and lossstatement. A sample profit and lossstatement is also available on theHFP website at the link below.

http://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/SampleProfitLossStatement_en.pdf

State DisabilityInsurance (SDI)

Copy of Award letter, ORCopy of pay stub, ORCopy of bank statement

The pay stub must be for a payperiod ending within the last 45 daysof when the application is received atSPE. The name of the person orother identifying information must beon the pay stub to link the person tothe pay stub.

The bank statement must include:

Name of the person for whomthe deposit is made on the lineshowing the deposited amount

Deposit date of the income mustbe within 45 days of when theapplication is received at SPE

The amount of income received

WorkersCompensation

Copy of award letter, ORCopy of pay stub, ORCopy of bank statement




Deposit date of the income mustbe within 45 days of when the

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application is received at SPE The amount of income received

The table below describes the types ofunearned income and the required documentation.


Social Security:Retirement,Survivors andDisability Insurance(RSDI), and/orSocial SecurityDisability Insurance

(SSDI)

Copy of award letter, ORCopy of pay stub, ORCopy of bank statement, OR1099 Tax Form, ORPrevious years Federal TaxForms 1040, 1040A, 1040Xw/original 1040, or an e-file

printout of these forms.






Veterans Benefits Copy of award letter, OR

Copy of pay stub, ORCopy of bank statement

The pay stub must be for a pay

period ending within the last 45 daysof when the application is received atSPE. The name of the person orother identifying information must beon the pay stub to link the person tothe pay stub.





Railroad Retirement Copy of award letter, ORCopy of pay stub, ORCopy of bank statement

The pay stub must be for a payperiod ending within the last 45 daysof when the application is received atSPE. The name of the person or



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other identifying information must beon the pay stub to link the person tothe pay stub.





Unemployment Copy of award letter, ORCopy of pay stub, ORCopy of bank statement




Deposit date of the income must

be within 45 days of when theapplication is received at SPE


Child Support,Alimony, or SpousalSupport PaymentsReceived

Copy of court order, ORCopy of District Attorney Noticeof Receipt, ORStatement from absentparent/spouse who makes thepayment(s)

Court orders may not be the currentdate but should match the amountclaimed as received on theapplication.

The statement from the absentparent/spouse who makes thepayment(s) must be dated within the

last 45 days of when the applicationis received at SPE and must include:

The monthly amount paid The name of the child(ren)

receiving the child supportpayment



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Farm Income Federal Income Tax Form 1040and Schedule F FormProfit and Loss Statement

Depreciation listed on the Schedule Fis added back to the net income.

A profit and loss statement must befor the most recent completed threemonths prior to the date theapplication is submitted. If theperson submits a Profit and LossStatement for less than three months,it must also include information onwhen the business began operation.The months reported will be addedtogether and divided by the numberof months to calculate the monthlyincome.

Depreciation and entertainment andmeals are added back to the netincome.

See pages 4-32 for a sampleSchedule F and 4-36 and 4-37 forsample profit and loss statement orconsult a tax advisor for instructionson preparing a profit and lossstatement. A sample profit and lossstatement is also available on theHFP website at the link below.

http://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/SampleProfitLossStatement_en.pdf

Pensions andRetirement

Copy of award letter, ORCopy of pay stub, ORCopy of bank statement




Deposit date of the income mustbe within 45 days of when the

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application is received at SPE The amount of income received

Interest Income Copy of current bank statementshowing interest earned

Interest income may be receivedeach month or may accumulate in anaccount. Some interest, such as thatfrom an Individual Retirement

Account (IRA) account, is notcounted.

Rental Income 1040 Tax Return with theSchedule E, ORRental Income Worksheet

If there is income listed on line 17 ofthe Federal Tax Form 1040, aSchedule E must be present.

If the 1040 Tax Return is notavailable, a Rental IncomeWorksheet may be submitted. Seepage 4-31 for a sample Schedule Eand page 4-40 for a sample RentalIncome Worksheet. A sample RentalIncome Worksheet is also availableon the HFP website at the link below.

http://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalIncomeWorksheet_en.pdf

Renting a Room Copy of payment receipt forrenting a room, ORCopy of cancelled check, OR

A self written affidavit, ORAn Income Documentation forRenting an Room Form

The payment receipt must state it isfor renting a room.

The cancelled check must state it isfor renting a room.

The self-written affidavit is acceptableas long as it demonstrates incomefrom a room rental.

The Income Documentation forRenting a Room form must becompleted in full and signed by the

individual who is renting the room.See page 4-41 for a sample IncomeDocumentation for Renting a Roomfor. The form is also available on theHFP website at the link below.

http://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalOfRoom

http://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalIncomeWorksheet_en.pdfhttp://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalIncomeWorksheet_en.pdfhttp://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalIncomeWorksheet_en.pdfhttp://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalOfRoomForm_en.pdfhttp://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalOfRoomForm_en.pdfhttp://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalOfRoomForm_en.pdfhttp://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalOfRoomForm_en.pdfhttp://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalIncomeWorksheet_en.pdfhttp://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalIncomeWorksheet_en.pdfhttp://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/RentalIncomeWorksheet_en.pdf


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Form_en.pdf

Gift Income Letter from Gift Giver A signed and dated letter from the giftgiver must be dated within 45 days ofwhen the application is received atSPE and must include the name ofthe person to whom the gift is beinggiven on a regular basis (one timegifts are not allowed.)

Gift income is not counted if thegiftors income has been used todetermine the eligibility for any otherperson on the application who isapplying for benefits.

Housing Allowancefor Clergy

Copy of pay stub Housing allowance may appear asParsonage on the pay stub.



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There are many types of income that are not counted. These forms of income are not used todetermine families incomes and ARE NOT listed on the application with the exception of someforms of public assistance that affect family size.

Income That is NOT Counted

Advance pay Agent Orange payment to Armed Services Personnel who were exposed Disaster and emergency assistance payments Earnings from a job for retroactive salaries Educational grants and scholarships Energy Assistance payments to low-income families Executive volunteer programs Federal Housing Assistance

Federal payments to Native American Indians and Alaska Natives Foster care payments 401K plan or account that has been cashed out prior to retirement age General Relief Assistance In-kind income, services in-kind Income tax credits Income tax refund Japanese reparation payments Job earnings of a child under age 14 Job earnings of a child age 14 or older if the child is in school Lump sum inheritance Past due child support or alimony support Payments to victims of crimes Payments to victims of the socialist persecution Per diem Property tax refunds or rebates Radiation Exposure Compensation Trust Fund Payments Relocation assistance benefits Reimbursed expenses, e.g., travel expenses Scholarships, loans, and grants applied towards college expenses Senior citizen volunteer programs Spina Bifida payments Title IV student assistance

Training expenses paid by the Department of Rehabilitation Trust accounts. The interest may count as income if the family draws interest each

month and if the account is considered accessible. Medi-Cal may count the interest orrequire additional information about the account

Value of Food Stamps Vista payments Workforce Investment Act (WIA payments)



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Income That is ExcludedRecipients of the following forms of public assistance are not counted in the family size and this

income is not counted. Proof of these forms of public assistance must be indicated on theapplication and proof must be submitted. Not providing this information may result in a wrongeligibility determination due to an incorrect family size determination. See Chapter 8,Application Completion Instructions, for more information.

Public assistance payments include:

Supplemental Security Income/State Supplemental Payment (SSI/SSP) CalWORKs (TANF, AFDC) - may receive Medi-Cal and Cash Assistance 1931(b) Medi-Cal only General Relief/Assistance 20% Social Security Increase (Pickle) Aid to Adoption Payments (AAP) Cuban Refugee Cash Grant (RMA) Emergency Assistance (EA) Indochinese Refugee Cash Grant In-Home Supportive Services (IHSS) for person who receives services

NOTE: Persons who receive care under IHSS are considered to be the recipient. They areexcluded from the household and their income is not counted. Persons giving the care underIHSS are considered to be the provider and their income is counted as earned income.



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Step 3: Determine the Gross Monthly Income for Each Family Member

Once the family size and countable income have been determined, whose income is counted forwhom (i.e., financial responsibility) is determined. Not everyone who is counted in the familysize will have his/her income counted for all of the family members.

Whose income is counted for which family member depends on his/her family relationships.Family members incomes are only counted for those people for whom they are financiallyresponsible.

Adults are financially responsible for:

Themselves Their spouse Their children (biological or

adoptive)

Stepparents are not financially responsible for their stepchildren. Unmarried parents are notfinancially responsible for each other.

Children are not financially responsible for their parents or other adults or their siblings. Achilds income, if counted, is only counted for that child. If the child is a parent, their income willalso be counted for their children.

NOTE: Child support is considered to be the childs income.

Calculating Income

When calculating income for adults, use the gross amount received before any taxes,retirement, child support, or other withholdings. The only income that is used for screening isthe income that is counted. Refer to Step 2 for income that is counted and income not counted.Do not use income that is not counted or excluded in the income calculations.



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Step 3: Determining the Gross Month ly Income for Each Family Member

Pay Frequency Calculation

For counted family members, determine how often each person receives

income and then convert this income to a monthly amount, as follows

Once a month: Use the gross monthly amount Twice a month: Multiply by 2 Every two weeks: Multiply by 2.167 Every week: Multiply by 4.33 Quarterly (Every three months): Divide by 3 Annually* (Once a year): Divide by 12

*Refer to Federal Income Tax form 1040

Often family members do not realize that there is a difference between being paid twice a monthand being paid every two weeks

If family members are paid on two specific DATES each month (e.g., 1st and 15th), theyare paid twice a month

If family members are paid on a specific DAY of the week (e.g., every other Friday, everyother Tuesday), they are paid every two weeks

CAAs will need to ask family members about the dates they are paid and may need to check thedates on a calendar to see how often they are paid.

Calculating Parents Monthly Gross Income

Calculate the gross amount the parent receives and multiply by the appropriate frequency(Refer to the Pay Frequency Calculation in this section) to determine the monthly income. Ifparents have more than one source of earned income, calculate each source of incomeseparately. Add the sum of any other countable income (e.g., alimony, Social Security, SDI,etc.) the parent might receive.

NOTE: DO NOT use income that is not counted or excluded in the income calculations. Referto Step 2 for income that is counted, income not counted and income that is excluded.

Take the sum of all countable income to determine the parents total monthly gross income.Refer to the Sample Income Calculation Worksheet on pages 4-44 and 4-45 for moreinformation on calculating income.



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Calculating the Childs Monthly Gross Income

Calculate the gross amount of income the child receives and multiply or divide by theappropriate frequency (frequency chart above). When calculating the monthly gross income fora child, include any countable earned income the child receives. Countable income for a childmay include job earnings of a child over age 14 AND not going to school. Other countable

income for a child may include child support and/or government benefits (i.e. Social Securitybenefits, etc.) Refer to Step 2 for income that is counted and financial responsibility on pages 4-4 through 4-14.

Calculating the Pregnant Womans Monthly Gross Income

When calculating the monthly gross income for a pregnant woman, calculate her income thesame as a parent if she is an adult, and calculate as a child if she is a minor.



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Step 4: Determine the Deductions for Each Child and Pregnant Woman

Medi-Cal and Healthy Families allow certain income deductions. These are different from taxdeductions. The deductions and required documentation are listed in the following chart.

INCOME DEDUCTION DOCUMENTATION INSTRUCTIONSWork Expense:

$90 for each workingfamily member whoseincome is counted

No additionaldocumentation neededbeyond proof of earnedincome. Refer to Step 2for earned incomedocumentationrequirements.

Deductions can only be taken againstearned income. If the income amount isless than $90, use the actual amount ofincome as the deduction.

Income from Temporary WorkersCompensation Disability or SDI iscounted as earned income and recipientsalso will receive the $90 work expensededuction. Recipients of permanentWorkers Compensation Disability and

Unemployment benefits will not receivethis deduction.

Child Care Expenses:

Total of child careexpenses paid for allchildren who arecounted in the familysize, up to:

$200 for each child

under age 2 $175 for each child

age 2 and older

Copy of receipt, ORCopy of cancelled check,ORSigned statement fromthe child care provider

Documentation must be dated within 45days of when the application is receivedat SPE.

Deduction can only be taken directly fromthe income of the parent who is payingthe child care expenses.

If the amount paid is less than the

maximum allowed, deduct the actualamount paid.

For example, parents have an 18-month-old. Mom pays $150 per month for childcare. Mom can deduct $150 for childcare expenses from her gross income.

For children under 5 years old child careexpense documentation with the wordtuition is acceptable as valid proof ofchild care expenses. It is not acceptable

for children over the age of 5 years old.

Working adults and adults in jobtraining/school may get the deduction forchild care expenses when there is noother person in the home who canprovide child care.



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INCOME DEDUCTION DOCUMENTATION INSTRUCTIONS

Disabled DependentCare Expenses:

The total of dependent

care expenses paid forall dependents up to$175 for each disableddependent

Copy of payment receipt,ORCopy of cancelled check,


Deduction can only be taken directly fromthe income of the parent who is payingthe dependent care expenses.

If the amount paid is less than themaximum allowed, deduct the actualamount.

Working adults and adults in jobtraining/school may get the deduction fordependent care expenses when there isno other person in the home who can

provide child care.

Alimony and ChildSupport Received:

Up to $50 per family

Copy of court order, ORCopy of pay stub, ORDistrict Attorney Notice ofReceipt, ORStatement from parentmaking the child supportpayment


The maximum deduction for all alimonyand/or child support received is $50 perfamily. The deduction is divided amongall family members receiving alimonyand/or child support.

For example, if a child receives childsupport and his/her parent also receivesalimony, the parent and child will eachreceive a $25 deduction.

If the total amount received is less than$50, deduct the actual amount received.

Alimony and ChildSupport Paid:

Deduct the full amount

of the court order or theactual amount paid,whichever is less

Copy of court order, ORCopy of District AttorneyNotice of Receipt, ORCopy of cancelled check,

ORCopy of pay stubshowing a garnishmentspecified for alimonyand/or child support

Only the parent who pays the courtordered alimony and/or child support iseligible for this deduction.

If the amount paid is less than the courtordered amount, cancelled checks orreceipts may be sent.



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NOTE: The county Department of Social Services (DSS) will need to determine specialdeductions for family members who are aged, blind, or disabled. Families with aged, blind, ordisabled individuals may have a lower countable income after these special deductions areused.

Step 5: Determine the Net Monthly Income for Each Family Member

Calculating Parent Net Income

To determine a parents net income, subtract the total parent deductions (see Step 4 in thischapter) from the total parent gross income (see Step 3 in this chapter). Do this for each parentin the home who is counted in the family size.

Parent Net Income = (Total Gross Income - Total Parent Deductions)

Calculating Net Income for Children and Pregnant Women

Because not every family members income is counted for all other family members, each childand pregnant womans income must be calculated separately. Only the income of those whoare financially responsible for a family member will be used for the person being applied for.

For a child, use the income of:

The parents (natural or adoptive) The child

For a pregnant teen, use the income of:

The pregnant teen The pregnant teens husband

For a pregnant woman, use the income of:

The pregnant woman The pregnant womans husband Father of unborn child, if he has child in common

with the pregnant woman

For an unborn child, use the income of:

The pregnant woman Father of unborn child, if he has another child in

common with the pregnant woman The husband of the pregnant woman



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There may be other people who are counted in the family size, such as stepparents and otherchildren with income, but their incomes will not be counted unless they meet the criteria listedabove.

Step 5: Determine the Net Monthly Income for Each Family Member

Childs Net Income

In determining a childs net income, use only the net income of those who are financiallyresponsible for this child. Refer to Step 3 for determining the monthly income for each familymember.

NOTE: Remember there may be other people who are counted in the family size, such asstepparents and other children with income, whose income will not be counted.

Determine the parents net income that applies to the child and add this to the childs total grossincome, if any.

Subtract any deductions the child may be eligible for including work expense (if the child hascountable earned income) and the child support received deduction (if this child receives childsupport).

Child Net Income = (Total Parent Net Income + Child Gross Monthly Income ChildDeductions)

Pregnant Womans Net Income

In determining a pregnant womans net income, rules regarding financial responsibility also

apply. Refer to Step 3 in this chapter for more information. Use only the income of the personswho are financially responsible for the pregnant woman (i.e., herself, her husband/spouse, thefather of the unborn child, if they have another child in common). Do not apply any childsincome and/or childs deductions when determining the income of a pregnant woman.

NOTE: If pregnant teens are being applied for by parents, use the Child Net Income calculationof Child Gross Monthly Income + pregnant teens spouses Net Income Child Deductions.

Pregnant Womans Net Income = (Pregnant Womans Net Income + Spouses Net Incomeor Income of the father of the unborn child, if they haveanother child in common)



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Step 5: Determine the Net Monthly Income for Each Child

Compare the childs net or pregnant womans net income to the income chart below to see if thechild or pregnant woman appears eligible for no-cost Medi-Cal or HFP.

REMINDER: CAAs must always use the NET family income to see if the children or pregnant

women appear to be eligible for no-cost Medi-Cal. Applications that are screened eligible to no-cost Medi-Cal at SPE will be forwarded to the county DSS. Applications with incomes screenedabove no-cost Medi-Cal will be processed by the HFP.

Healthy Families Program and Medi-Cal for FamiliesIncome Guideline Chart

Guidelines change Apr il 1 of each year

FamilySize

ChildAge 0 to 1 or

Pregnant WomanMedi-Cal

ChildAge 0 to 1

Healthy Families

ChildAge 1 thru 5

Medi-Cal

ChildAge 1 thru 5

HealthyFamilies

ChildAge 6 thru 18

Medi-Cal

ChildAge 6 thru 18

HealthyFamilies

1 $0 - $1,915 $1,916 - $2,394 $0 - $1,274 $1,275 - $2,394 $0 - $958 $959 - $2,3942 $0 - $2,585 $2,586 - $3,232 $0 - $1,720 $1,721 - $3,232 $0 - $1,293 $1,294 - $3,2323 $0 - $3,255 $3,256 - $4,069 $0 - $2,165 $2,166 - $4,069 $0 - $1,628 $1,629 - $4,0694 $0 - $3,925 $3,926 - $4,907 $0 - $2,611 $2,612 - $4,907 $0 - $1,963 $1,964 - $4,9075 $0 - $4,595 $4,596 - $5,744 $0 - $3,056 $3,057 - $5,744 $0 - $2,298 $2,299 - $5,7446 $0 - $5,265 $5,266 - $6,582 $0 - $3,502 $3,503 - $6,582 $0 - $2,633 $2,634 - $6,5827 $0 - $5,935 $5,936 - $7,419 $0 - $3,947 $3,948 - $7,419 $0 - $2,968 $2,969 - $7,4198 $0 - $6,605 $6,606 - $8,257 $0 - $4,393 $4,394 - $8,257 $0 - $3,303 $3,304 - $8,2579 $0 - $7,275 $7,276 - $9,094 $0 - $4,838 $4,839 - $9,094 $0 - $3,638 $3,639 - $9,09410 $0 - $7,945 $7,946 - $9,932 $0 - $5,284 $5,285 - $9,932 $0 - $3,973 $3,974 - $9,932

Refer to HFP Website www.healthyfamilies.ca.gov for most current incomeguidelines, if after April 1st each year.

http://www.healthyfamilies.ca.gov/http://www.healthyfamilies.ca.gov/


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Using Federal Income Tax Forms to Document Income

Using federal income tax forms documents the income only for those family members in thehousehold whose income is reported on that form. Other family members whose incomes arecounted and not listed (e.g., spouses filing separately, children who receive child support, SocialSecurity, etc.) must provide separate proof of income. These other sources of income need to

be added to the net monthly income determined from the tax form. For stepparent households,applicants must provide verification (e.g., W-2 forms) to show the amount of the gross incomelisted on the tax form that belongs to the stepparent. For other types of income belonging to theparents and stepparents (e.g., interest income) divide this income in half.

Using the federal income tax form for the year prior to the previous year will only be accepteduntil the April 15th tax filing deadline. For example, if a family applied in February 2011, the2009 federal tax forms could have been used to verify the familys income. After April 15th ofeach year, applicants can only use their federal tax forms for the previous year. If applicantssubmit federal tax forms from a period other than the previous year, the tax forms will beconsidered too old and will not be accepted as proof of income. Applicants will be required tosubmit their previous years federal tax forms or some other form of documentation to prove

their income. Instructions for using specific federal tax forms are listed below.

Form 1040 U.S. Indiv idual Income Tax Form

Add together all of the positive amounts listed in the Income Section (Lines 7 through 21). Ifapplicants have reported losses (negative amounts) on any of the lines of this section, theseamounts are counted as zero.If a 1040 Tax Form contains amounts on line 15a and/or 16a, these amounts are not taken intoconsideration. HFP uses only the income reported on lines 15b and 16b for IRA distributionsincome and pensions and annuities income.

Remember: DO NOT subtract any losses from the positive gross income amount. This amountmay be different. DO NOT use the amount on Line 22.



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Using Federal Tax Forms to Document the Income

Form 1040A U.S. Individual Income Tax Form

Add together all the positive amounts listed in the Income Section (Lines 7 through 14b).This may be different than the amount listed on line 15. A sample of Form 1040A is on page

4-33.

NOTE: The 1040A cannot be used for self employment. See page 4-26 for instructions onusing tax forms (Schedule C) for the self employed.If a 1040A Tax Form contains amounts on line 11a and/or 12a, these amounts are not takeninto consideration. HFP uses only the income reported on lines 11b and 12b for IRAdistributions income and pensions and annuities income.

Form 1040EZ U.S. Individual Income Tax Form

Add together all the positive amounts listed in the Income Section (Lines 1 through 3).See page 4-34 for a sample of Form 1040EZ.

NOTE: The 1040EZ cannot be used for self-employment. See page 4-26 for instructions onusing tax forms (Schedule C) for the self employed.



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Using Federal Income Tax Forms to Document Income

Internal Revenue Service e-file

The printout generated by the Internal Revenue Service (IRS) e-file software, IRS forms 1040,1040A, and 1040EZ, also can be used to verify family members previous years incomes. The

lines reported on the IRS e-file printout correspond to the same lines as Form 1040, 1040A, or1040EZ. The printout must list the amounts actually reported on each line of the actual federaltax form (positive and negative amounts).



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Using the Federal Income Tax Form to Prove Self-Employment Income

If the Federal Tax Form 1040 is used as proof of income for self-employed family members, aSchedule C (Profit or Loss from Business) or Schedule F (Profit or Loss from Farming) MUSTalso be submitted with the Tax Form 1040. See pages 4-30 and 4-35 for a sample of theSchedules C and page 4-32 for a sample of the Schedule F.

SOME DEDUCTIONS FROM PROFIT/LOSS ARE NOT ALLOWED

Both Medi-Cal and Healthy Families DO NOT ALLOW certain deductions

Depreciation listed on:Line 13 of Schedule C

Line 16 of Schedule F

Meals and entertainment listed on Line 24b of Schedule C

Amounts listed on lines 13 and 24b of Schedule C must be added back to Self-Employment on

Line 12 of Form 1040

Amount listed on line 16 of Schedule F must be added back to the net Farm Income on Line 18of Form 1040



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Using the 1040 Form to Determine Monthly Income

To estimate the monthly income using annual income, add all of the positive amounts of lines 7through 21 on the Form 1040. Negative amounts are counted as zero. Divide the total positiveamounts by 12 to estimate the monthly gross income. Earned income receives the $90 workexpense deduction.

For self-employed persons, divide the amount on line 12 of the Form 1040 by 12 to estimate themonthly gross income. Self-employment income receives the $90 work expense deduction.

Example: A family is using a paycheck stub to prove the mothers income. The father is self-employed and using his 1040 and Schedule C to prove his income. He reports a net profit fromhis business income of $13,789. This amount is divided by 12 to determine the estimated grossmonthly income of $1,149.08.

Using the Affidavit for Income Documentation

Applicants can use affidavits as a last resort to document their income when using the Healthy

Families Application when they have no other acceptable income documentation.

The HFP regulations state that an affidavit of income, handwritten by the person who receivesthe income, can be used as income documentation if the income amount could not be proven byany other acceptable means (e.g., pay stub, 1040, profit and loss statement, etc.). In thesecases, the affidavit of income is considered acceptable proof of income.

NOTE:AFFIDAVITSMUST BE HANDWRITTEN. Typed affidavits will not be accepted. Familymembers who are self-employed CANNOT use affidavits to document their incomes. They can,however, prepare three-month profit and loss statements or use their federal tax forms with theSchedule C.

Requirements for using an affidavit

An affidavit must include the following information:

Name of the person claiming the income Dated letter Date income was received and the pay frequency. The last day the income was

received must be within 45 days of when the document was received at SPE Declaration that no other proof of income is available Declaration that the information provided is true and correct Acknowledgment that he/she understands the information in the letter is subject to

verification by the state Signature of person claiming the income. The signature on the affidavit must be legible

and the person signing the affidavit must be the person claiming the income Handwritten, unless applicant is unable to write due to literacy or a physical limitation. If

so, it may be typed and applicant may sign with an X. The printed name and signatureof the witness must be included in this situation.



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See page 4-37 for a sample affidavit. The sample affidavit on the website is strictly an exampleand is not to be submitted as proof of income documentation. The affidavit must be handwrittenand contain the elements in the sample verbatim. A sample affidavit is also available on theHFP website at the link below.

http://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/SampleSelfAffidavitLetter_en.pdf

CAA REMINDER: Any manipulation or incorrect reporting of the family income is consideredfraudulent behavior and can result in CAA termination and revocation of the CAA number. SeeChapter 2, Certified Application Assistants, for more information.

http://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/SampleSelfAffidavitLetter_en.pdfhttp://www.healthyfamilies.ca.gov/Publications/EEs_CAAs/SampleSelfAffidavitLetter_en.pdf


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Form 1040



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Schedule C



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Schedule E



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Schedule F



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Form 1040A



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Form 1040EZ



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Schedule C-EZ



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Profit & Loss Statement

(Example)

ABC Landscaping Company1000 First Street

Sacramento, CA 95814

(916) 555-1234

January 2011 February 2011 March 2011

Total Income $5,000 Total $2,000 Total Income $4,000

Expenses:

Car $ 200Equipment $1,000Repair $ 300

Advertising $ 300

Depreciation $ 100Meals & Entertain. $ 100Cash Draw $1,000Total Expenses - $3,000

Expenses:

Car $ 200Equipment $1,000Repair $1,100

Advertising $ 300


Expenses:

Car $ 200Equipment $ 300Repair $ 100

Advertising $ 300


Net Income: $2,000 Net Income: - $1,600 Net Income: $2,100

The information provided above is true and correct to the best of my knowledge.

(Signature and date of Person Earning Income)

Note: Negative net income is always counted as zero. Please see the February 2011 incomeas an example.

Reminder: If the person submits a Profit and Loss Statement for less than three months, itmust also include information on when the business began operation. The months reported willbe added together and divided by the number of months to calculate the monthly income.



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How the HFP Calculates Income When Using a Profit and Loss Statement

When calculating self-employment income, the HFP does not include depreciation, meals andentertainment, and cash draws as business expenses. The HFP adds expenses fordepreciation, meals and entertainment and cash draws back into the monthly income. Thesetypes of expenses are referred to as Disallowed Expenses. Please see the example below.

January 2011 February 2011 March 2011

Total Income $5,000 Total $2,000 Total Income $4,000

Expenses:

Car $ 200Equipment $1,000Repair $ 300

Advertising $ 300Depreciation $ 100

Meals & Entertain. $ 100Cash Draw $1,000Total Expenses - $3,000

Expenses:

Car $ 200Equipment $1,000Repair $1,100



Expenses:

Car $ 200Equipment $ 300Repair $ 100



Net Income: $2,000 Net Income: - $1,600 Net Income: $2,100

Total Income $5,000

Total Expenses - $3,000

Net Income $2,000

Disallowed

Expenses $1,200

Adjusted Net $3,200

Total Income $2,000


Net Income - $1,600

Disallowed

Expenses $1,000

Adjusted Net - $ 600

Total Income $4,000


Net Income $2,100

Disallowed

Expenses $1,000

Adjusted Net $3,10

HFP monthly income calculations

Adjusted Net : January 2011 $3,200February 2011 $ 0March 2011 $3,100

Total Adjusted Net: $6,300Divide by: 3

Monthly Adjusted Net Income $2,100 (this is the amount to enter on the applicationas the monthly income from self-employment)



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Sample Employer Letter

Note: The pay period must be within 45 days of the date the application is received at the SPE.



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Sample Affidavit of Income Letter

Note: The income reported on the Affidavit must be for a period within 45 days of the date theapplication is received at the SPE. Signature on the affidavit must be legible and the personsigning the affidavit must be an individual that is identified as counted in the household. This isonly an example. The affidavit must be handwritten and contain the elements in the sampleverbatim.



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Rental Income Worksheet

We own the property located at: _______________________________

_______________________________

We receive $_____________ every month in rental income from this property.

These are our monthly expenses for the property*:

Mortgage Interest Paid: $______________

Taxes Paid: $______________

Utilities Paid: $______________

Insurance Paid: $______________

Upkeep/Repairs: $______________

*If you pay an expense every year instead of every month, divide the amount you pay everyyear by 12 and write in the monthly amount of the expense

We affirm that the information given on this paper is current, true and correct to the bestof our knowledge.

______________________________________ __________________Signature of owner Date

_______________________________________ __________________Signature of owner Date

RIW EN 05/24/2007



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Medi-Cal Notice of Action



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Medi-Cal Notice of Action



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Sample Income Calculation Worksheet



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Sample Income Calculation Worksheet



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Income Calculation Worksheet Instructions

Calculating Parents Net Income

Step 1- Work IncomeDetermine and calculate the frequency (how often received) of the gross monthly income

for each parent in the family size. Refer to pages 4-4 through 4-7 for more informationon work income.

Step 2- Other Countable IncomeOther Countable Income a parent may receive includes alimony, unemployment,Workers Compensation, etc. Refer to 4-8 through 4-12 for the list of other income thatis counted.

Step 3- Total Gross IncomeTake the sum of the Work Income and Other Countable Income to calculate theTotal Gross Income for each parent. Refer to page 4-15 through 4-17 for moreinformation.

Step 4 Total Parent DeductionsMedi-Cal and the HFP allow certain income deductions to be applied to the Total GrossIncome of each parent, if he or she is eligible. Refer to page 4-18 and 4-19 for moreinformation on deductions.

Total Parent Deductions: Take the sum of all deductions this parent is eligible for.

Step 5- Parent Net IncomeFor each parent, take the Total Gross Income and subtract the amount of Total ParentDeductions. Refer to page 4-20 Calculating Parents Net Income for more information.

NOTE: Please refer to page 4-21 for instructions on how to calculate a pregnant womans netincome.



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Income Calculation Worksheet Instructions

Calculating Childs Net Income

Remember to screen each child separately, including only income counted for that child.Repeat Steps 1 through 4 for EACH child you are screening.

Step 1- Parents Net IncomeFor each child, take the Parent Net Income (from page 1 of worksheet (page 4-44 ofmanual)) that is counted for this child and total the sum of all Parent Net Income to giveyou the Total Parent Net Income (Box A) for each child.

Step 2- Childs Countable IncomeA child may also have his or her own income. This income is counted only for the childwho actually receives it. Countable income for a child may include:

Work income (of a child) - counts for the child if the child is not enrolled inschool and is over the age of 14

Other Countable income- is other income received by this child (e.g., childsupport, Social Security benefits, etc.)

Total Child Gross Income (Box B): Take the sum of the childs income (if any) to findthe total for this box.

Step 3- Child s DeductionsA child may be eligible for two deductions: work expense and/or child support received.

Total Child Deductions (Box C): Take the sum of all deductions this child is eligible for.

Step 4- Child s Net IncomeRefer to page 4-17 for more information on calculating Childs Net Income.

Child 1 Net Income = Child 1s Box A + Child 1s Box B Child 1s Box C

04 DeterminingFamilySize En

Documents