SI SF01210.512 Types of Income/Property under the State Plan

You must understand how California treated income under the Aid to the Blind (AB) plan in order to compute BCI under the Livermore decision. Following is a discussion of the various income and property concepts under the State plan.

A. Separate Income

Separate income is:

  1. 1. 

    Income derived from an interest in separate property.

  2. 2. 

    Income resulting from employment or military service rendered prior to the present marriage. (See SI SF01210.515 and .516.)

  3. 3. 

    Income received after

    • the rendition of a decree for separate maintenance, as distinguished from a decree of dissolution or

    • one spouse is living apart from the other spouse or

    • dissolution.

  4. 4. 

    Funds awarded a married person from a spouse in a civil action for personal injuries. These funds are separate income during the month of receipt and separate property if retained after the month of receipt. If paid as a nonrecurring lump sum payment, the funds are treated as property.

B. Community Income

Community income is:

  1. 1. 

    Generally derived from an interest in community property.

  2. 2. 

    Income resulting from employment or military service performed during the present marriage and not under the situation described in A.3. above.

  3. 3. 

    Funds awarded a married person in a civil action for personal injuries (not from a spouse- see A.4. above). If paid as a nonrecurring lump sum payment, the funds are treated as property.

A recipient may relinquish community interest in the recipient's spouse’s earnings by oral or written agreement, in which case, the spouse’s earnings become the spouse’s separate income. However, if the agreement is determined to be for the purpose of establishing eligibility for aid or increasing the amount of aid, consider the income to be community income.

Earnings of an ineligible spouse up to $200 monthly net are not considered as community income. Income from the earnings of a minor child in the home is community income unless the child is free from parental control.

C. Separate Property

Separate property is:

  1. 1. 

    Property acquired prior to marriage.

  2. 2. 

    Property acquired by either spouse if acquired after marriage by gift or inheritance.

  3. 3. 

    Property acquired during the marriage if purchased with funds that are separate property of the owner, such as funds received from the sale of separate property or property received by gift or inheritance.

  4. 4. 

    Separate income retained past the month of receipt if the spouses are living separate and apart from each other.

For purposes of this section, the spouses have separated if:

  1. 1. 

    They have obtained an interlocutory or final judgment of dissolution or

  2. 2. 

    They are legally separated or

  3. 3. 

    They are informally separated (living separate and apart from each other and they consider their marital relationship to have ended).

D. Community Property

Community property, real or personal, is property acquired by a spouse during the marriage (unless acquired as separate property), purchased with community funds, or with funds from the sale of community property, including property purchased on the personal credit of either spouse. If purchased with funds that cannot be identified as separate property, consider the property to be community property.

E. Current Income of an Ineligible Spouse

This is income received in the current month regardless of the period over which it was accrued. See SI SF01210.515.D if income is irregular.

F. Earned Income

Earned income is income received in cash or in kind as wages, salaries, commissions, or profit from self-employment.

  1. 1. 

    Earned income includes:

    • earnings over a period of time for which settlement is made at one given time, e.g., sale of crops, livestock, other than sale of an entire holding

      returns from personal or real property, such as net income from rental of rooms, if the returns result from an appreciable and continuous effort on the part of the recipient

    • · earnings under Title I of the Elementary and Secondary Education Act

    • · payments under the Economic Opportunity Act

      NOTE: The Economic Opportunity Act was repealed in 1981, but some of the programs still exist – Job Corps, Neighborhood Youth Corps, New Careers and Concentrated Employment, and VISTA.

  2. 2. 

    Earned income does not include:

    • loans and grants, such as scholarships

    • benefits (not wages, salary, or profit) accruing as compensation or reward for service or as compensation for lack of employment

G. Unearned Income

While the California State plan does not specifically address unearned income, consider income not excluded (SI SF01210.518) and not earned as unearned. Certain items are unearned income under the State AB plan that are not income under Federal rules:

  • Tax refunds are income (see SI SF01210.514D.4.a. (1)).

  • Income from one month can become unearned income in the next month (see SI SF01210.513B. and SI SF01210.520).

  • Certain nonrecurring lump sum payments that are income under Federal rules are not income under the State AB plan (see subsection I below).

H. Lump Sum Income (Recurring)

This is income accrued over two or more months, expected to be received at intervals in the future, and received less frequently than monthly.

I. Lump Sum Income (Nonrecurring)

This is income accrued over two or more months and not expected to be received in the same amount at intervals in the future orpayments of money that are not related to any time period, such as death benefits or inheritances.

The State treated certain types of nonrecurring lump sums as personal property (resources) rather than income. The types of payments covered by this provision are:

  • OASDI Benefits

  • Railroad Retirement Benefits

  • Veteran’s Benefits

  • Worker’s Compensation

  • Disability Insurance

  • Other similar social insurance payments

NOTE: Offset cases involving retroactive title II benefits (OASDI) may require a Livermore computation.

As a result of the receipt of one of these types of payments, if the property reserve on the first of the month following the month of receipt exceeds the amount allowable under the State plan, the excess counts as income that month. Any unexpended portion of such income becomes personal property again the month following the month it was countable as income.

Example: A retroactive title II payment of $2000 received in July would not count as income in July. If the amount of that payment retained on August 1 exceeds the applicable resource limit under the State plan, the amount by which the resources exceeded the limit is countable income in August. Any unexpended portion of that income is a resource beginning September.

J. In-Kind Income

In-kind income is income other than cash. It includes the value of items provided at no charge and those which an individual, home, or institution is obligated to provide the recipient under a partial life care contract, life lease, or other agreement.

The State established the following monthly values for in-kind items:

  • Food            $43

  • Rent            $23.20

  • Utilities       $6.80 – prorated if not all utilities are contributed

  • Clothing       $12

  • Transportation $12 for the BI and a companion

    NOTE: While transportation is in-kind income (unless excluded as a work expense under SI SF01210.513E.4.), it is not income under Federal rules.

Accordingly, free room and board is valued at $73 ($43 + $23.20 + $6.80). Use these values whether the item is received as a contribution or in return for services provided.

Consider the value to be “inconsequential” if the recipient receives free room and board during a temporary absence from the recipient's home. A temporary absence is not more than one month, i.e., 30 calendar days beginning the first full day of absence from the home.

Consider the value of the free room and board as income after an absence of one month, but only to the extent that continuing allowances in the grant for these items exceed the cost to the recipient of maintaining the home to which the recipient expects to return.

K. Interest Income

All interest received is net income except:

  • interest on savings accounts (see L below)

  • interest payments on trust deeds, etc., received as a result of the sale of real property and earmarked as income to applied to a new home once the home is purchases (Such income is available to meet other needs only until the month in which the new home is purchases and after full payment on the home is completed.)

Apportion all interest income received on a regular basis, but less frequently than monthly, equally over the number of months it has been accrued beginning with the month after the month of receipt.

L. Casual Income and Income from an Inconsequential Resource

This is income that is:

  • unpredictable as to amount or time of receipt,

  • of short duration, and

  • by itself, of negligible importance in meeting continuing needs under the appropriate standard

Income from an inconsequential resource is the net return from an interest in real or personal property that, by itself, makes no appreciable contribution to the continuing needs of a recipient under the aid standard. The first $60 a quarter of these types of income is exempt from income.

Examples of this type of income include:

  • income from occasional labor and services of a temporary nature which offer no security as a regular source of maintenance

  • income from occasional rental of a room which is not ordinarily advertised or listed for rent and which is rented for a short period only

  • the value of small gifts for holidays and anniversaries. This also includes gifts in kind earmarked for a specific purpose and not useful to meet the recipient’s continuing needs, e.g., gift of a ticket for a trip, gifts of personal property. Irregular, nonrecurring gifts of money are considered personal property.

  • interest on savings accounts

  • interest on securities which have no appreciable significance in meeting continuing needs

  • results of occasional barter transactions or the sale or exchange of home produce

  • dues and membership fees in benevolent and fraternal organizations that are assumed by the organization or by another person on behalf of the recipient

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SI SF01210.512 - Types of Income/Property under the State Plan - 09/12/2022
Batch run: 09/12/2022