Resource Limits
From CalWORKs | Welfare Resources
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The former AFDC property (resource) limits have been replaced in CalWORKs by the Food Stamps property (resource) rules. WIC § 11155; ACL 97-66. To receive CalWORKs benefits, a client need not sell everything s/he owns. Moreover, an applicant or recipient may have up to $2,000 ($3,000 if over age 60) in cash, bank accounts, stocks, certificates of deposit, etc. 7 CFR § 273.8(b).
In general, a resource must be "accessible" to the family in order to be counted, that is, actually as well as legally available for its support. For example, irrevocable trust accounts, rental security deposits, or real property on the market for a reasonable price but which has not yet been sold, are not counted as resources. 7 CFR § 273.8(e)(8); MPP 42-213.
Specific Exempt Property
- Home, Household Goods and Personal Effects, and Miscellaneous Exemptions
- The client may also keep a home, household goods (TV, etc.), personal effects (clothing or jewelry), a burial plot, a life insurance policy or pension fund (excluding an IRA), income producing property (although the income produced will be counted as income), tools needed for employment, energy assistance or disaster relief payments, and other miscellaneous resources. 7 CFR § 273.8(e). Recipient families may also retain savings of up to $5000 for specific educational or job related purposes. WIC § 11155.2. 7 CFR § 273.8 lists all property which is to be excluded in the federal Food Stamp program, and the state regulations containing the Food Stamps resource rules are found at MPP Parts 42-213, 63-501, 63-506 and 63-507. See also Appendix III to this manual.
- Irrevocable Trusts
- Generally, resources having a cash value that is not accessible to the household, such as irrevocable trusts, are not considered resources. 7 CFR § 273.8(e)(8). However, several requirements must exist before a trust can be considered exempt: (1) the trust arrangement must not be likely to end, and no household member can have the power to revoke the trust or change the name of the beneficiary; (2) the trustee administering the funds must be an individual appointed by a court, or an institution, corporation, or organization which is not under the direction or ownership of any household member; (3) trust investments made on behalf of the trust must not directly involve or assist any business or corporation under the control, direction, or influence of a household member; and (4) The funds held in irrevocable trust must either have been (a) established from non-household funds and the trust created by a non-household member, OR (b) created from the household's own funds, if the trustee uses the funds solely to make investments on behalf of the trust or to pay the educational or medical expenses of any person named by the household creating the trust.
- Automobiles
- If a client owns a car, its fair market value (the "Blue Book" value) cannot be more than $4,650, with some exceptions. 7 CFR § 273.8(e)(3), (e)(13). However, if the car is such a wreck that no one would reasonably pay more than $1,500 for it, or where the client owes a lot of money on the vehicle and its estimated return to the client after sale ("Blue Book" value less the amount owed to the bank) is $1500 or less, the car will be exempt from the resource calculation because it will be considered an inaccessible resource. 7 CFR § 273.8(e)(3)(G); MPP 42.215.431(h); ACL 01-24, 01-29. For example:
- Let's say that the client owns a car worth $6,000 but still owes the bank $4,000. In this case, the first $4650 will be counted against the car resource limit, leaving a balance of $1350. This amount will be applied towards the general $2000 property limit, and the client will still be eligible for CalWORKs if the value of all his or her remaining countable resources is below $650 ($2,000 less the $1,350 excess value of the car leaves $650).
- On the other hand, if the client owns a car worth $6,000 but owes the bank $5,000, the car's value would be exempt because its estimated return after sale ("Blue Book" less the bank's share) is under $1,500.
- Other Exceptions: The total value of a vehicle will be exempt if it is used for income producing purposes (such as by a farmer or cab driver), long distance travel essential to employment (such as by a migrant farm worker), transporting a disabled household member (including an SSI recipient child), transporting otherwise unobtainable heating fuel or water, or as a home. 7 CFR § 273.8(e)(3); MPP 42-215.431; ACL 00-06.
Disposing of a Resource for Less than Fair Market Value
A recipient who disposes of property for less than fair market value to retain eligibility for benefits will be disqualified for the number of months in which the Aneeds standard@ (see below) divides into the difference between the fair market value of the property and any sum received for the property (with the resulting figure rounded down to the next whole number). WIC § 11157.5; ACL 97-66. This rule applies only to those who are already receiving benefits, and not to new applicants. ACL 97-66.
"Lump Sum" Payments
"Lump Sums" - personal injury awards, inheritances, retroactive government benefits, or similar windfalls received by a recipient - can be considered a "resource" or "income" at different times. Non-recurring "social insurance payments" such as retroactive Social Security, Workers Compensation, or Veterans Administration benefits will be treated as resources when received, and the CalWORKs recipient will be ineligible until all of the family=s countable resources, including these social insurance payments, have been depleted below the $2,000 resource limit. WIC § 11157.
All other "lump sums" received, such as inheritances or personal injury awards, will be considered income in the month received (and counted under the rules set forth below), and as a resource in each following month. WIC § 11157. The former AFDC "lump sum rule," under which the lump sum was considered income for the number of months that the AFDC need standard divided into the lump sum, has been abolished.
Because the AFDC program no longer exists, former AFDC recipients subject to such a "period of ineligibility" imposed on or after November 1, 1996 are eligible for CalWORKs even if the family would still continue to be ineligible for AFDC. ACL 98-18.
