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Budget Act of 2017 Implementation FAQ

Frequently Asked Questions (FAQ) in relation to the changes from the Budget Act of 2017.

General Questions
State Median Income
12-Month Eligibility
Family Fee
Digital Forms

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General Questions

  1. Are the increases in the State Median Income (SMI) and 12-Month Eligibility determination enacted as part of the Budget Act of 2017 implemented July 1, 2017?
    Unless otherwise specified, the provisions enacted in the Budget Act of 2017 became effective on July 1, 2017. The California Department of Education (CDE) has released Guidance through Management Bulletin (MB) posted on the Early Education and Support Division (EESD) MB Web page.
  2. The MB 17-08 references that a separate MB will be issued to address State Median Income (Initial Certification), Graduated Phase-out (Recertification), Updated Income Rankings, Revised Family Fee Schedule, and Minimum 12-Month Eligibility. Until such time, will agencies be held harmless if they continue to use policies that were effective prior to the passing of the Budget Act of 2017?

    Contractors will be held accountable for implementing changes prompted by the Budget Act of 2017, such as calculating family fees based on the new SMI, recertifying income eligible families based on the new ongoing income eligibility threshold, etc. At this point all relevant MBs and guidance have been released. Please review the EESD MBs Web page for more information or contact your EESD Field Services Consultant.

    As has been past practice, the EESD, Field Services Office (FSO) will be providing technical assistance during Contract Monitoring Reviews scheduled during the first year of implementation of policy changes. The Governance and Administration Unit (GAU) will continue to verify information at initial certification and at recertification. The GAU will provide technical assistance to ensure any voluntary requests made by a family to alter their services are not improperly treated as an update.

    However, as a reminder, California Education Code (EC), Section 8263(i)(1) states the following:

    Because a family that meets eligibility requirements at its most recent eligibility certification or recertification is considered eligible until the next certification, as provided in subdivision (h), a payment made by a child development program for a child during this period shall not be considered an error or an improper payment due to a change in the family’s circumstances during the same period.  

State Median Income

  1. 1. I assume that if a parent’s income decreases, they may choose to report their income to reduce their family fees, but they will not need to report increases to income as long as they earn 85 percent or less of the SMI based on family size.
    This is correct. The EC is clear that families are required to report income between certifications only if income exceeds 85 percent of the SMI based on family size.
  2. What should we do for those families that we disenrolled prior to July 1, 2017 due to being over income, but are now eligible with the new income guidelines?
    The effective date of the increase to the SMI is July 1, 2017. Unfortunately, any families disenrolled for being over income before that date may only be re-enrolled in enrollment priority order. However, the contractor can reconsider the disenrollment action anytime during the appeal process, as long as the family is still receiving services. If an appeal for any action related to disenrollment for income eligibility is received by the EESD, the appeal coordinator will contact the agency to provide an opportunity to rescind the Notice of Action.
  3. We do not collect income documentation from cash-aided parents. Should we regularly verify (on our own) that they are still cash-aided, when the family would otherwise be in family fee range, or over the 85 percentile of the SMI?

    In accordance with EC Section 8263(a)(1)(A), families are only required to meet one of the four eligibility requirements listed. When a family’s eligibility is initially certified or recertified as California Work Opportunity and Responsibility to Kids (CalWORKs) cash-aid, the family remains eligible for services for at least 12 months in accordance with EC Section 8263(h).

  4. Is the process for calculating a family’s income at certification, recertification, or upon a family’s voluntary request any different in light of the Budget Act of 2017?
    The Budget Act of 2017 changes when income can be calculated for purposes of determining eligibility, by providing that families no longer need to report changes in income between certifications except in specific situations. The method by which income shall be calculated at initial certification, recertification, or as otherwise permitted under the Budget Act of 2017 shall remain the same in accordance with the existing California Code of Regulations, Title 5 (5 CCR).
  5. What documentation of income will be collected if a parent does not have a stable job and changes jobs constantly because the state requires current and “ongoing” income?
    The documentation requirements for proving income have not changed. Continue using existing regulations for purposes of documentation and verification of income.
  6. When a family who has unpredictable income, as defined in 5 CCR Section 18078(j)(3), self-reports a decrease in income, do agencies continue to average the previous 3–12 months when that income may not be reflective of the reported change?

    Pursuant to EC Section 8263(h)(4), a family may voluntarily report income or other changes. This information shall be used to reduce family fees, increase the family’s services or extend the period of the family’s eligibility before recertification. The process for calculation of income has not changed. Income must be calculated in accordance with 5 CCR Section 18096.

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12-Month Eligibility

  1. 1. Is the field not to implement 12-Month Eligibility determination and redetermination until the CDE releases all of the MBs?
    The provisions in the Budget Act of 2017, including 12-Month Eligibility, became effective July 1, 2017. The CDE is working to identify regulatory requirements that conflict with this provision and will provide additional information via MB.
  2. With the release of the new MBs, when can we expect an updated summary of those MBs no longer in effect (i.e., MB 11-06 or 14-04)?
    MBs that are superseded by newly released MBs will be specifically identified and rescinded with the release of the MB. In addition, MB 17-14 provides that it supersedes all other MBs, or portions thereof, that are in direct conflict with the Guidance (Attachment A).
  3. Will the 60-day maximum in a fiscal year remain for job search activities?

    No, the EC and 5 CCR limiting job search to 60 days has been superseded by changes to EC Section 8263(h). Once certified, a family remains eligible for no less than 12 months.

  4. If a family chooses to report a change in income to reduce their family fees, what action, if any is expected to be taken regarding the family’s possible change in need (decrease in income due to fewer hours worked)?

    Pursuant to EC Section 8263(h)(4), a family may voluntarily report income or other changes. This information shall only be used to reduce family fees, increase the family’s services, or extend the period of the family’s eligibility before recertification. If a family reports a decrease in income due to fewer hours worked to reduce their family fees, this information cannot be used to reduce the family’s services.

  5. It is clear families do not need to report changes in their income unless it exceeds 85 percent of the SMI. However, what actions are required when a family reports a family member entering or leaving the family unit that would impact the family fee/income calculations? (Family member leaving may increase fees, family member joining the family may decrease the fees).

    Pursuant to EC Section 8263(h)(4), a family may voluntarily report income or other changes. This information shall be used to reduce family fees, increase the family’s services, or extend the period of the family’s eligibility before recertification. If a family reports an additional family member or fewer hours worked in order to reduce their family fees, this information cannot be used to reduce the family’s services or make other changes. Similarly, if a family happens to report a family member has left the family, the information may not be used to increase the family fees. Any such changes to the family’s income, size, and need can and should be reported and documented at the family’s next recertification.

  6. Once a family is certified and chooses to report a change in need, what is required to verify the need? Can a parent self-report changes without the agency verifying the need if the family is within their 12-Month Eligibility period?

    Pursuant to EC Section 8263(h)(4), a family may voluntarily report income or other changes. This information shall be used to reduce family fees, increase the family’s services, or extend the period of the family’s eligibility before recertification. Verification and documentation requirements under 5 CCR are still applicable. However, the information provided cannot be used to make any other changes to a family’s service agreement.

    Example: A family certified for part-time care reports that they need full-time care. Agencies will be required to verify and document the need in accordance with 5 CCR, however, this same information cannot be used to increase a family’s fee.

  7. Clarification is needed in the interim before 5 CCR is updated on what actions agencies need to take when a family is certified for a certain amount of hours (based on need) and the family reports they need more or less child care hours.

    Thank you for your input. Clarification is provided in the MB 17-14: 12-Month Eligibility.

  8. If a family enrolls or recertifies and their Need for Services is limited (i.e., school ends in December or their Statement of Incapacity expires in 6 months), families will still need to have a new documented need for child care when that need expires, correct? Even if it is less than 12 months?

    No, changes made as a result of the Budget Act of 2017, including 12-Month Eligibility, supersede many of the existing 5 CCR insofar as the changes in EC Section 8263(h) provide for services for no less than 12 months.

  9. Currently, we update families when their need for services will end before the next recertification due date (i.e., student parents, at-risk/Child Protective Services, parent incapacity, etc.). Will we continue to do this, or will we leave it up to the parent to report a change in need?

    The EC Section 8263(h) indicates that upon establishing initial eligibility or ongoing eligibility for services, a family shall be considered to meet all eligibility and need requirements for those services for not less than 12 months, shall receive the services for not less than 12 months before having their eligibility or need recertified, and shall not be required to report changes to income or other changes for at least 12 months.

    Pursuant to EC Section 8263(h)(4), a family may voluntarily report income or other changes. This information shall be used to reduce family fees, increase the family’s services, or extend the period of the family’s eligibility before recertification. Additional information is provided in the Guidance included in MB 17-14.

  10. For our student parents, will grades be collected at the time of their 12-month recertification only? If so, how would we handle their probation period if they do not meet the minimum progress requirements?

    Yes. In accordance with EC Section 8263(h) student parents would only be recertified no sooner than 12 months from previous certification. Additional information regarding verification of making progress towards completion of a vocational goal is addressed in MB 17-14.

  11. If a parent doesn’t report they lost their job, and ends up using care for job search activities for more than six months or more than 30 hours per week, is that considered an overpayment?
    No. As previously stated, EC Section 8263(h) indicates that upon establishing initial eligibility or ongoing eligibility for services, a family shall be considered to meet all eligibility and need requirements for those services for not less than 12 months, shall receive the services for not less than 12 months before having their eligibility or need recertification, and shall not be required to report changes to income or other changes for at least 12 months, except as follows:
    (1) If the basis of eligibility is income, a family must report increases in income that exceed the exit threshold (85 percent of the SMI).

    (2) When a family is initially certified or recertified on the basis of seeking employment, they will receive services for not less than 12 months.

    (3) A family may at any time voluntarily report income or other changes. This information can only be used to reduce family fees, increase the family’s services, or extend the period of the family’s eligibility before recertification.

    Additionally, EC Section 8263(i)(1) specifies that because a family that meets eligibility requirements at its most recent eligibility certification or recertification is considered eligible until the next certification, as provided in subdivision (h), a payment made by a child development program for a child during this period shall not be considered an error or an improper payment due to a change in the family’s circumstances during the same period.
  12. When the attendance forms show that care is different from what has been certified/approved, what is our responsibility? Do we call the parent to ask what has changed and why, or do we leave it up to the parent to report?

    Additional information is provided in MB 17-14: 12-Month Eligibility.

    Additionally, please refer to EC Section 8263(h), which indicates that upon establishing initial eligibility or ongoing eligibility for services, a family shall be considered to meet all eligibility and need requirements for those services for not less than 12 months, shall receive the services for not less than 12 months before having their eligibility or need recertification, and shall not be required to report changes to income or other changes for at least 12 months, except as follows:

    (1) If the basis of eligibility is income, a family must report increases in income that exceed the exit threshold (85 percent of the SMI).

    (2) When a family is initially certified or recertified on the bases of seeking employment will receive services for not less than 12 months.

    (3) A family may at any time voluntarily report income or other changes. This information can only be used to reduce family fees, increase the family’s services, or extend the period of the family’s eligibility before recertification.

  13. Has the CDE determined a stakeholder process to develop recommendations regarding the implementation of the 12-Month Eligibility determination and redetermination process?

    As part of the process, the CDE will convene a workgroup of parents, advocates, department staff, child development program representatives and other stakeholders to develop recommendations. The CDE is committed to ensuring the workgroup represents the statewide diversity of California’s early care and education system.

    More information will be released in fall 2017.

  14. When does the 12-month initial certification begin if the family is a transfer from Stage 1?

    The EESD does not administer the Stage 1 program. The CDE will collaborate with California Department of Social Services and provide a response through the CDE CalWORKs Transfer Frequently Asked Questions Web page.

  15. For families currently receiving services, do we recertify each family when they come in to verify a variable work schedule or change in need?

    No. There is no need to update or recertify a family’s eligibility or need before the 12-month recertification date.

    As previously stated EC Section 8263(h) indicates that upon establishing initial eligibility or ongoing eligibility for services, a family shall be considered to meet all eligibility and need requirements for those services for not less than 12 months, shall receive the services for not less than 12 months before having their eligibility or need recertification, and shall not be required to report changes to income or other changes for at least 12 months, except as follows:

    (1) If the basis of eligibility is income, a family must report increases in income that exceed the exit threshold (85 percent of the SMI).

    (2) When a family is initially certified or recertified on the basis of seeking employment, they will receive services for not less than 12 months.

    (3) A family may at any time voluntarily report income or other changes. This information can only be used to reduce family fees, increase the family’s services, or extend the period of the family’s eligibility before recertification.

    Many of the 5 CCR that require reviewing and updating need or income every few months are superseded by the Budget Act of 2017, specifically EC Section 8263 insofar as they contradict 12-Month Eligibility. Additional information is provided in the Guidance attached to MB 17-14: 12-Month Eligibility.

  16. Self-Employment/Variable schedules/Cash only income are currently reviewed/updated every four months. Will this requirement remain the same?

    Parents who are employed or self-employed may possibly have variable schedules and documentation of that variable schedule, as stipulated in 5 CCR Section 18086(b)(2)(D), may be used to determine the days and hours needed for child care services. The 5 CCR Section 18086(b)(2)(D) also indicates that until such time as the employment becomes predictable, need for services shall be updated at least every four months and shall be based on the requirements of subdivision (b) and the child care services utilized.

    However, EC Section 8263(h) indicates that upon establishing initial eligibility or ongoing eligibility for services, a family shall be considered to meet all eligibility and need requirements for those services for not less than 12 months, shall receive the services for not less than 12 months before having their eligibility or need recertification, and shall not be required to report changes to income or other changes for at least 12 months, except as follows:

    (1) If the basis of eligibility is income, a family must report increases in income that exceed the exit threshold (85 percent of SMI).

    (2) When a family is initially certified or recertified on the basis of seeking employment, they will receive services for not less than 12 months.

    In other words, for the example provided here, the updates/review every four months are no longer required.

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Family Fee

  1. 1. Agencies and providers are struggling with understanding what to do with family fees. Now that the income guidelines are higher, family fees will be affected. However, without a family fee schedule, the entity responsible for collecting family fees is probably collecting an outdated amount. What is the guidance from CDE on this?

    Please refer to the MB 17-11: Revised Family Fee Schedule Web page, released August 11, 2017.

  2. Family Fees could be reduced if family income drops for any reason. Is a full recertification necessary, can an addendum be used, or should the Family Fee be left as-is until recertification? Lowering fees could benefit the parent/family.

    No. A recertification is not necessary.

    The EC Section 8263(h) indicates that upon establishing initial eligibility or ongoing eligibility for services, a family shall be considered to meet all eligibility and need requirements for those services for not less than 12 months, shall receive the services for not less than 12 months before having their eligibility or need recertified, and shall not be required to report changes to income or other changes for at least 12 months.

    Pursuant to EC Section 8263(h)(4), a family may voluntarily report income or other changes. This information shall be used to reduce family fees, increase the family’s services, or extend the period of the family’s eligibility before recertification. Verification and documentation requirements under 5 CCR are still applicable. However, the information provided cannot be used to make any other changes to a family’s service agreement.

  3. If a parent calls to report a change in income that puts them in family fee range, or changes their current family fee, do we update the case and apply the new family fee?

    Families are only required to report changes if there income exceeds 85 percent of the SMI.

    The EC Section 8263(h) indicates that upon establishing initial eligibility or ongoing eligibility for services, a family shall be considered to meet all eligibility and need requirements for those services for not less than 12 months, shall receive the services for not less than 12 months before having their eligibility or need recertified, and shall not be required to report changes to income or other changes for at least 12 months.

    Pursuant to EC Section 8263(h)(4), a family may voluntarily report income or other changes. This information shall be used to reduce family fees, increase the family’s services, or extend the period of the family’s eligibility before recertification. Verification and documentation requirements under 5 CCR are still applicable. However, the information provided cannot be used to make any other changes to a family’s service agreement.

Digital Forms

  1. The Budget Act of 2017 enacted language to allow alternative payment programs and centers to use digital forms to allow families to apply for services. This language coupled with the authorization to use digital signatures and storage of records electronically essentially allows contractors to operate electronically. How are the CDE FSO and Governance and Administration Unit, and the CDE Audit and Investigations Division going to approve this move?

    The EC authorizes contractors to use digital enrollment forms, there is no provision requiring CDE approval. A MB providing additional guidance is forthcoming.

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Questions:   Early Education and Support Division | ECEBudgetActFAQ@cde.ca.gov | 916-322-6233
Last Reviewed: Tuesday, October 10, 2017
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