41. Prospective (quarterly) budgeting
For related information, see Budgeting for “change-reporting” households
Anticipated income
For most households, California “prospectively budgets” food stamps on a quarterly basis. (This will change to semi-annual reporting as of October 1, 2013. See ACL 12-59; FNS has issued a waiver permitting the QR system to remain in place until then. The bugeting and reporting rules are mostly the same, but any changes are noted in the ACL.) This means that the county decides whether a household is eligible and the amount of food stamps based on the income the household “reasonably anticipates” it will get in the upcoming quarter. [MPP § 63-503.321(households with no aged/disabled member) and .322 (for households with an aged/disabled member) (note: .321 incorrectly applies the gross income test to all households, when it does not apply if there is an aged/disabled household member), MPP § 63-509(a)(1) and (2); 7 C.F.R. § 273.10(c)(1)(i).]
The county “budgets” (i.e., calculates) the food stamps allotment for the next quarter, based on the income and resources the family lists on a quarterly report, the QR7 form. [MPP §§ 63-508.1, 63-508.66, -509.2.] The QR7 form asks households to report on their income and resources for the “data month,” which is the middle month of the quarter. The “submit month,” the third month of the quarter, is the month the household turns in the report. The county uses the reported information to calculate the food stamps budget for the upcoming quarter, called the “payment quarter.” [MPP § 63-508.2.] The rules regarding the QR-7 report are at MPP § 63-508. Counties will use conversion multipliers for weekly and bi-weekly income that is regularly received. For more information on these, see ACL 10-10.
Counties may use a calendar quarter, or it can designate other 3-month periods as a quarter. [ACL 03-18, page 77.] It is important to know the applicable quarter, otherwise the correct reporting and budgeting will not occur.
There are strict and specific standards for when income can be “reasonably anticipated.” Basically, the county can only count income the household and county are almost certain the household will receive. That is, the income must have been or will be approved or authorized within the upcoming quarter; and the household is otherwise reasonably certain that the income will be received within the quarter; and the amount of the income is known. [MPP § 63-509.2(a)(2).] Although addressing the issue of Unemployment Insurance Benefits, ACL 11-49 states the general rule regarding anticipated income: “whether the household is QR or change reporting, CWDs are not to anticipate UIB if the payment amount and date of receipt are unknown. If there is no reasonable certainty of the amount and the date of receipt, anticipated UIB income cannot be used to establish eligibility and/or benefit levels.” ACL 11-49. If income is not reasonably anticipated, and then it is received, no overissuance occurs.
For new sources of income, this means that the household must know the amount and start date of the income. [MPP § 63-509.2(a)(2)(C)(3)(g).] If the household is not sure when it will receive new income or how much it will get, the food stamp office cannot count it. [MPP § 63-503.321(a), .322 (for households with aged or disabled members) and .322 (when all household members are aged or disabled), MPP § 63-509(a)(2); 7 C.F.R. § 273.10(c)(1)(i).]
Example: Mr. Medina has lost his job and applied for unemployment insurance benefits (UI). He is eligible to get $95 a week in UI benefits, but EDD cannot tell him when it will start his benefits. The food stamp office cannot count this income.
If the household and employer cannot reasonably anticipate future income, the county may also look at the recipient’s prior work patterns, if the recipient agrees they are similar to the anticipated work pattern. The county may look back at the earning pattern for the prior 12 months. [MPP § 63-509(a)(6); 7 C.F.R. § 273.10(c)(ii).]
Example: Ms. Gray is a waitress. She is guaranteed 2 days of work, but could have more. Looking back over the prior 12-month period, she has never worked fewer than 3 days a week. If Ms. Gray agrees that the historic pattern is not anticipated to change, she can agree to have 3 days of earnings budgeted. (If Ms. Gray’s employer did not guarantee hours, and she has periods of no employment, she can disagree that the work pattern is representative/anticipated. In this case, the county should not count the income.)
If the household’s income fluctuates (i.e., is not reasonably predictable the same every month), the county will average the income over the quarter. [MPP § 63-509(a)(4)); 7 C.F.R. §§ 273.10(c)(i) and (c)(3).]
Certain changes are considered “Verified upon Receipt” (VUR) and can result in a mid-quarter decrease. ACL 13-08. (Normally only increases are processed mid-quarter, except certain sanctions and other “known to county” matters.)
CDSS defines VUR as information that is not questionable, the provider is the primary source of the information, and the counties need no further information to take action. Reports of household composition changes are VUR if reported by the household, and Counties must act on those changes —unless the reported change is for another public assistance program and the change does not trigger action in the other program. Income changes reported by the household that are less than the income reporting threshold (IRT), without third-party verification (in CalFresh nonassistance and public-assistance cases) are not considered VUR.
Decrease in income reported on QR 7
The county must treat a report in the Submit Month (either on the QR 7 or a separate report) as a voluntary mid-quarter
report, and adjust/supplement the benefit amount for the month the decrease occurred or was reported, whichever is later, if verified timely. (See ACL 09-41 on timely verification in this situation, county assistance, and use of affidavits to verify.) If the decreased income is expected to continue into the next quarter, the report of decreased income on the QR 7 will also be used to determine the next Payment Quarter’s cash aid and food stamp benefit amount.
Benefits “frozen” for the quarter
Generally, once calculated, the food stamp allotment will remain the same throughout the payment quarter. If the household makes a mid-quarter report of a change (i.e., outside the normal QR7 reporting time frame) that would result in increased benefits, the county will adjust the benefits up. [MPP § 63-509(d)] If the mid-quarter report would result in a decrease in aid, the county makes no change, and reminds the household to report the change (again) on the QR7. [MPP § 63-509(d)(7).]
The exceptions are joint CalWORKs/Food Stamps households reporting a disqualifying factor (e.g., fleeing or drug felon, parole violation, or exceeding the “income reporting threshold” (“IRT”); reporting moving out of state; when a county imposes a penalty or sanction; or a member of the household is approved for benefits in another household. [MPP § 63-509(c) and (h)] If a child receiving food stamps is placed in foster care, however, the county shall not remove the child mid-quarter, unless the child is aided in the foster care household. ACIN I-58-08. If a food stamp household not receiving cash aid voluntarily reports mid-quarter of income over 130% of poverty, the county will also take action mid-quarter. [MPP § 63-509(d)(7)(C).]
Adding new/formerly disqualified members
If a household reports a new member, and the county determines the new person is eligible, the county will issue benefits for the new member effective the first of the next payment quarter. [MPP § 63-508.654.] Previously disqualified household members are added to the household beginning the first of the month after the disqualification period ends. [MPP § 63-508.655.]
Resource eligibility determination
The county determines resources only once for the quarter, based on information listed for the data month on the QR7. The county cannot take action mid-quarter, based on resources. [MPP § 63-508.66.] If the QR7 indicates a family is over-resources, the county will discontinue the case at the end of the quarter, by sending a notice at least 10 days prior to the end of the quarter. [MPP § 63-508.66(d).] If the household verifies that it has spent down the resources prior to the discontinuance, the county will rescind the discontinuance. [MPP § 63-508.66(e).] (For related information, see the section about how many resources a household can have.)