Prospective budgeting for Semi-Annual Reporting (SAR) households

Semi-Annual Reporting (SAR): The short version

Semi-Annual Reporting (SAR) was phased in statewide in California during 2013, in both its CalWORKs and CalFresh programs, wholly replacing the old, more frequent-interval “quarterly reporting” (QR) system. SAR is similar to QR in most of its reporting requirements and budgeting methodology.

As discussed more specifically below, under SAR the county welfare department still budgets prospectively, using “reasonably anticipated” income; the treatment of “fluctuating” income has been simplified; and all of the current voluntary and mandatory mid-period reporting requirements and mid-period county-initiated actions remain essentially the same under SAR, with the exception that the Income Reporting Threshold (IRT) is a lower amount, and grants may be decreased as well as discontinued based on a report of income that exceeds the IRT. [See ACL 12-25, page 2.] More recently, the California Department of Social Services (CDSS) clarified its CalFresh policies regarding the gross income limit for conferring so-called Modified Categorical Eligibility (MCE), for household reports of income over the IRT, required case actions for households with continued eligibility, and requirements for notifying households of their IRT. [ACL 15-42.]

As detailed in ACL 12-25 and ACL 12-25E, recipients are required to submit one Semi-Annual Eligibility Status Report form (SAR 7) once a year, in the sixth month of the first semi-annual period, followed by annual recertification in the sixth month of the second semi-annual period. Under SAR, recipients have limited mandatory reporting requirements during the six-month period between eligibility reports, but are still required to report mid-period any change in income likely to render them ineligible for CalFresh benefits (130% percent of the Federal Poverty Level (FPL),  The county must give the CalFresh household a written notice stating the “income reporting threshold” (IRT) which, if crossed, would render the household ineligible.  [ACL 12-25 at pp. 38-9.]  Certain “non-assistance” CalFresh recipients (i.e., not receiving welfare cash-aid) are also required to report changes in work hours that could affect their eligibility.

The county uses the reported information to calculate the CalFresh budget for the upcoming semi-annual period, called the “SAR payment period.” The rules regarding the SAR 7 report and what makes it complete are the same as they were under the old QR system. ACL 12-25 at p. 13 discusses the SAR 7 “completeness criteria.” Counties use conversion multipliers for weekly and bi-weekly income that is regularly received. [See ACL 12-25, at pp. 27-28.]

CDSS has developed a new prepopulated SAR 7 form. [ACL 24-06.] Effective the date automation is complete, counties must provide the new SAR 7 form prepopulated to recipients of CalWORKs, CalFresh, California Food Assistance Program, Refugee Cash Assistance, Trafficking and Crime Victims Assistance Program, and Entrant Cash Assistance. [ACL 24-06.]

CDSS also has a blank version of the new SAR 7 called the SAR 7B to be made available in welfare department lobbies and online for on demand access.  For cash aid recipients, counties must also provide the new Domestic Abuse Addendum. [ACL 24-06.]

The new form includes the SAR 7DA which allows households to disclose any history of domestic abuse in order to receive services or assistance. [ACL 24-06.] When an individual completes the SAR 7DA, the county must privately contact them to provide information, resources or needed accommodations. [ACL 24-06.]

The new SAR 7/SAR 7B also allows disclosure of a disability or a request for assistance because of a disability. [ACL 24-06.] When households report having a disability or state that they need assistance because of a disability, counties must contact the household to assist and provide information, resources or needed accommodations.

Income actually received or reasonably anticipated to be received must be reported on the SAR.  [ACL 24-06.] However, changes in unearned income under $100 that are reported on the SAR are disregarded.  [ACL 18-18.]

Reasonably anticipated income

Under semi-annual reporting, anticipated income is budgeted prospectively for the upcoming six-month payment period. Prospective budgeting means that the county decides whether a household is eligible, and the amount of CalFresh benefits the household can get, based on the income the household “reasonably anticipates” it will get in the upcoming six-month period. “Reasonably anticipated” deductible expenses are also reported on the SAR 7 form.

The county “budgets” (i.e., calculates) the CalFresh allotment for the next six months, based on the income and resources the family lists on its semi-annual report, the SAR 7 form. The SAR 7 form asks households to report on their income and resources for the “data month,” which is the fifth month of the semi-annual period. The “submit month,” the last, sixth month of the semi-annual period, is the month in which the household turns in the report.

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 semi-annual period; and the household knows the date the income will be received and the amount of income that will be received. Income that does not meet this standard is not listed on the SAR 7 form and instead is reported when it is received, if it is more than the IRT. [See ACL 12-25, p. 25.]

Announced Social Security Cost of Living increases are budgeted as reasonably anticipated income.  [ACIN I-72-22 and I-72-22E; ACIN I-91-21.]

Fluctuating Income

Semi-annual reporting rules have considerably simplified the budgeting of so-called “fluctuating” income. Now, only income that can be “reasonably anticipated” is counted. The county does not budget new income after the six-month report (i.e., the SAR 7 form or at the initial application or later recertification stage), unless it will continue at a level exceeding the Income Reporting Threshold (IRT). [ACL 12-25, p. 30-32.] The county can look at historical earnings to see if there is an agreed upon amount that can be anticipated. [See ACL 12-25, at pp. 26-27 and 30-32.]

New Income

If a household anticipates receipt of new income from a new source in the upcoming SAR payment period, such as a new job or unemployment insurance benefits, the income is NOT considered “reasonably anticipated” UNLESS:

  • The household verifies that the income has been or will be approved or authorized within the upcoming SAR period, or the household is otherwise reasonably certain that the income will be received within the SAR period;
  • The anticipated amount of the income is known and verified, or the household is otherwise reasonably certain of the amount of the income; and
  • The start date of the income is known and verified, or the household is otherwise reasonably certain of the start date of the income.

If the household is not reasonable certain as to the amount or payment date, the income cannot be anticipated, and thus cannot be budgeted. The new income would then only be considered if it mid-period exceeds the Income Reporting Threshold (IRT), because that is a mandatory report that the county must act upon.

If the household and employer cannot reasonably anticipate future income, but it is reasonable to anticipate that there will be income, the county may also look at the recipient’s prior work patterns. The prior earning-history “look-back period” is 12 months, but this can only be used if the recipient agrees the prior earning history is similar to the anticipated work pattern. [7 C.F.R. § 273.10(c)(ii).]

Benefits “frozen” for the semi-annual period

Generally, once calculated, the CalFresh allotment remains the same throughout the semi-annual payment period. If the household makes a mid-semi-annual report of a change (i.e., outside the normal SAR 7 reporting time frame) that would result in increased benefits, the county will adjust the benefits up. [ACL 12-25, p. 9-10.] If the mid-period report would result in a decrease in aid, the county makes no change, and reminds the household to report the change (again) on the SAR 7 form.

So far, so good. But then there is this exception to the foregoing rule: If the report is a mandatory mid-period report, the county must act on the report, even if it decreases or stops the benefits. The mandatory reports are:

  • “Non-assistance” CalFresh households (i.e., not receiving welfare cash-aid) reporting income over 130% of the Federal Poverty Level (FPL); or changes in work hours for those without minor children and who are subject to the “ABAWD” rules.
  • Joint CalWORKs/CalFresh households must report when their income exceeds the Income Reporting Threshold (IRT), or other disqualifying factor (e.g., fleeing-felon status.
  • Benefits can also change mid-period if a household member is reported (in writing) as 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(h); ACL 12-25, p. 71.] If a child receiving CalFresh benefits is placed in foster care, however, the county should not remove the child in the midst of the SAR payment period, unless the child is aided in the foster-care household. [ACIN I-58-08.]

Mandatory mid-period reports must be made within 10 days of the change.

In addition, the county will change benefits mid-period when:

  • There is non-compliance with a Quality Control Review
  • There are Cost of Living Increases for CalFresh, CalWORKS, General Assistance or Social Security Administration programs
  • There are adjustments because of an erroneous or incomplete SAR 7.
  • A household member’s ABAWD time limit ends.

[MPP § 63-509(h).]

Other changes in household composition are not mandatory mid-period reports, and do not need to be reported by the household until the next SAR or annual redetermination.  Changes in student status are not mandatory mid-period reports.  (ACIN I-89-15.)

Mid-period changes

Under the semi-annual reporting (SAR) system, income starting or ending mid-period is no longer averaged over every month of the payment period. Income the recipient anticipates will begin or end in one of the months of the upcoming SAR payment period will be counted only in the months the income is reasonably anticipated to be received. [ACL 12-25, p. 32.]  One time increases in income over the income reporting threshold (IRT) that are not expected to continue are not required to be reported.  [ACL 13-17, ACL 12-25.]  Examples are unexpected overtime or receiving an extra paycheck in a month because of weekly or bi-weekly payment schedule.  [ACL 13-17.]

In general, the county must act on mid-period change that would increase benefits and must not act on mid-period information that would decrease the household’s benefits.  The county must act on the following mid-period information that decreases benefits: the household voluntarily asks that the case be closed, the county has information that is considered verified upon receipt, a household member has been identified as a fleeing felon or parole violator, there has been a change in the household’s CalWORKs, SSI or general assistance grant, and the county certifies that a member of the household has received substantial lottery or gambling winnings (defined as equal to or greater than the CalFresh resource test in a single game or bet).  [ACL 21-101.]  This includes Social Security Cost of Living Adjustments.  [ACIN I-64-23.]

In determing whether a household has exceeded 130 percent of the Federal Poverty Level, the county must use the household’s actual gross income.  Counties cannot use the conversion factor (4.3 times weekly earnings) to determine if a recipient has missed a required report of income over the Income Reporting Threshold.  [ACL 24-23.]

There are three changes that must be reported within 10 days: gross monthly income over the income reporting threshold, reduction in work hours below average 20 hours per week for persons subject to the Able Bodied Adults Without Dependents time limit, and receipt of substantial lottery or gambling winnings. [ACL 21-101 at p.3.]

Change in address is not a mandatory mid-period report.  [ACL 17-58 at p.6.]

The county must also act on certain mass changes mid-period. [Id.]  Social Security Cost of Living Increases are considered known to the county and counties must act on them mid-period.  [ACIN I-72-22.]

The county must ensure that mid-period changes that are reported but not acted on are reported on the household’s next SAR or recertification. [ACL 21-101 at p.4]

When a CalFresh household reports a job loss after initial application, counties must request verification of the decrease in income and the amount of the decrease.  If the job loss caused a decrease in income of $50 or more, the county must verify the household’s new income to determine continuing eligibility.  If the job loss led to zero income, a statement from the household that it has zero income is sufficient unless it is questionable.  [ACL 20-48.]

For voluntary mid-period reports of a decrease in income, the county must change benefits no later than the month following the month when the decrease was reported.  [ACWDL, September 3, 2021.]  The county must accept the report without verification unless the information is incomplete, inaccurate, inconsistent or outdated.  [Id.]  The county can require verification of income changes over $50, or the change would result in an increase in benefits.  [Id.]  If the change was reported after the 20th of the month and it is too late to adjust the following month’s benefits, the county shall issue an underpayment by the 10th of the following month.  [Id.; ACL 20-48.]  If the household does not provide the verification within 10 days but provides it later, the time to take action on the change runs from the date of the verification.   [ACL 21-101.] There are two situations when the county must issue a supplement to increase benefits when a change is reported too late in the month to increase the household’s next monthly benefit amount: when there is an increase in benefits because of a new household member, and when there is a decrease of more than $50 in the household’s monthly income.

Households certified with income between 131 and 200 percent of the federal poverty level do not have a mandatory mid-period income reporting requirement because they already have met their income reporting threshold reporting requirement.  [ACL 21-101.]

Counties must act mid-period on one of 10 changes whether they increases or decreases benefits.  These categories are:

1. A mandatory report made by the household, including gross monthly income received over the IRT, a reduction in work hours below 20 hours per week, averaged monthly, for ABAWDs subject to the time limit, and receipt of substantial lottery and gambling winnings.
2. A voluntary report made by the household of a change in circumstances resulting in an increase in benefits.
3. A voluntary request made by the household to close their CalFresh case.
4. A voluntary report made by the household of a change in residence. The CWD must investigate and take action on potential changes in shelter costs arising from this reported change.  If the change in residence is to a new county, an intercounty transfer must be initiated within 7 days of the voluntary report, and the new county must begin issuing benefits within 30 days.  [ACL 17-58 at pp. 6-7.]
5. The three-month limit for an ABAWD subject to the time limit ends or an ABAWD who has regained eligibility, is not exempt, and does not reside in an area with an
ABAWD waiver, stops meeting the work requirement. The CWD must also evaluate whether the ABAWD has exhausted their three additional consecutive months.
6. Failure of a member of the household to comply with a Quality Control Review.
7. The county that the CalFresh recipient is receiving SNAP benefits in another state.
8. A household member has been identified as a fleeing felon or probation or parole violator.
9. Verified Nationwide Prisoner Match or Deceased Persons Match.
10. Information that is considered VUR

[ACL 21-101.]

 

In addition, California has a waiver for address changes that will be effective from April 1, 2023 to March 31, 2024.  Under the waiver, if a county receives a verified change of address, but does not receive updated shelter cost information, the county will not change the household’s shelter cost.  The county must send a notice encouraging the household to report any changes in shelter costs.  The county must also ask about shelter cost at the household’s next recertification or periodic report.  If the county believes the change of address information is questionable or unclear, the county must respond to the information as required in 7 C.F.R. 273.12(c)(3).  [ACWDL, March 28, 2023.]

Change in immigration status is not a mandatory mid-period report.  [ACL 23-57.]

Changes verified upon receipt

Certain changes are considered “verified upon receipt” (VUR). 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. [ACL 13-08.]  If a change is voluntarily reported mid-period that will decrease or terminate benefits and it is considered VUR, the county must act upon it and this can result in a mid-period decrease or termination of benefits. [Id.] Normally only increases are processed mid-semi-annually, except certain sanctions and other matters “known” to the county.  If a change is voluntarily reported mid-period that will decrease or terminate benefits and it not is considered VUR, the county will note it in the case file but will not take action on it.  If a change is voluntarily reported that will increase benefits and it is considered VUR, the county must act on it to increase benefits. If a change is voluntarily reported that will increase benefits and it is not considered VUR, the county must request verification of the change and will act on the change to increase benefits only if it receives verification.

Income changes reported by the household that do not exceed the IRT, without third-party verification, are not considered VUR.  [ACL 13-17.]

Beginning to receive CalWORKs benefits mid-period is considered VUR and the county must adjust the CalFresh grant accordingly.  [ACIN I-58-13, Q and A 30.]

Reports of household-composition changes are VUR if reported by the household, and counties must act on those changes.  [ACIN I-58-13, Q and A 24.]  An exception is a mandatory reported change for another public assistance program because California has chosen not to act upon mandatory reports for other programs for CalFresh. [ACIN I-58-13, Q and A 26.] However, counties must take action for the CalFresh case when there are voluntary reports for other programs that are VUR.  [Id.]

When a new person joins the household mid-period, that person has income, and the new addition to the household is voluntarily reported, the county should act on that report only if it will increase CalFresh benefits, and in that case the county should request verification of the new household member’s income.  [ACIN I-58-13, Q and A 29.]

Changes in student status are not considered verified upon receipt.  [ACIN I-89-15.]

SSI cost of living increases are considered verified upon receipt and counties must reduce benefits accordingly for the first month of the cost of living increase.  [ACIN I-88-20.]

Third party reports are not considered VUR and counties are not obligated to act upon them.  [ACIN I-58-13, Q and A 31.]  However, if the information received from a third party puts the household’s eligibility for CalFresh in question, the county may act on the information in its discretion.  [Id.]

Information that is considered verified upon receipt is:

1.A voluntary report made by the household of a household composition change.

2. A voluntary report made by the household of a change of address.
3. A Payment Verification System report, including Retirement, Survivors and Disability Insurance
data from the Social Security Administration, and State Unemployment Insurance, and State Disability Insurance data from California’s
Employment Development Department.
4. SSI benefit information obtained from the Social Security Administration.
5. Unemployment insurance benefit (UIB) and State Disability Insurance benefit information that are reported through IEVS and obtained from the
California EDD.
6. Worker’s compensation benefits obtained from the California Worker’s Compensation agency.
7. A California Intentional Program Violation (IPV) report. The IPV needs to be established in order to disqualify the individual.
8. CalWORKs, SSI and General Assistance information obtained directly from the county.
9. Information regarding non-citizen status obtained from the Systemic Alien Verification for Entitlements (SAVE) system.
10. Information regarding In-Home Supportive Services provider wages obtained from the Case Management Information and Payrolling System.
11. Information regarding the removal of a child from a CalFresh household obtained from Child Protective Services and/or the county Foster Care
system.
12. Information that a household member received substantial lottery or gambling winnings obtained from a gaming entity data match.

[ACL 21-101.]

Decrease in income reported on the SAR 7 form

If verified timely, the county must treat a report in the “submit month,” either on the SAR 7 form or a separate report, as a voluntary mid-period report, and adjust or supplement accordingly the benefit amount for the month the decrease occurred or was reported, whichever is later. [ACL 12-25, p. 12; see also ACL 09-41 (timely verification, county assistance, and use of affidavits to verify).]

If the decreased income is expected to continue into the next semi-annual period, the report of decreased income on the SAR 7 form or other report will also be used to determine the next semi-annual-period cash-aid payment and CalFresh benefit amount.

Mid-Period Changes in Household Composition

The general rule is that reporting of mid-period reports of changes in household composition is voluntary.  [MPP § 63-509(f).]  If a household reports a new member, and the county determines the new person is eligible, and it will result in an increase in benefits, the county will issue benefits for the new member, effective the first of the next month in the semi-annual payment period. [See ACL 12-25, pp. 55-65.]  Although households are not required to report changes in household composition, reported changes in household composition are considered verified upon receipt and counties must decrease benefits if the report so requires.  [ACL 21-101.]

However, California has a waiver for address changes that will be effective from April 1, 2023 to June 30, 2026.  Under the waiver, if a county receives a verified change of address, but does not receive updated shelter cost information, the county will not change the household’s shelter cost.  The county must send a notice encouraging the household to report any changes in shelter costs.  The county must also ask about shelter cost at the household’s next recertification or periodic report.  If the county believes the change of address information is questionable or unclear, the county must respond to the information as required in 7 C.F.R. 273.12(c)(3).  [ACL 24-47, June 28, 2024; ACWDL, March 28, 2023.]

Previously disqualified household members are added to the household beginning the first of the month after the disqualification period ends. [ACL 12-25, p. 22.] If adding the person, such as one with income, would result in a decrease in benefits, the change is “held” until the next SAR 7 or recertification is processed.

The household is not required to report that people have left the household until the next SAR 7 or recertification.  [MPP § 63-509(f).]

Resource eligibility determination

Resources, for the most part, do not matter because the CalFresh program has all but removed resource limitations. But if the CalFresh household includes one or more members who are aged or disabled, with household income over 200% of the Federal Poverty Level (FPL), the household must still reckon with SNAP resource limitiations. [See ACL 13-32] Perhaps more importantly, families also getting CalWORKs can be discontinued from cash aid for exceeding still applicable resources rules.

The county determines resources only once for the semi-annual payment period, based on information listed for the “data month” on the SAR 7 form. [ACL 12-25, p. 21.] The county cannot take action mid-period, based on resources. If the SAR 7 report indicates a family has too many resources, the county will discontinue the CalWORKs case at the end of the payment period, i.e., the sixth month, by sending a written notice at least 10 days prior to the end of the semi-annual period. If the household verifies that it has spent down the resources prior to the discontinuance, the county will rescind the discontinuance. If not, the household will switch to transitional CalFresh benefits.

(For related information, see the section about how many resources a household can have.)