Skip to main content
California Department of Education Logo

Management Bulletin 17-08

Early Education and Support Division

Subject: State Median Income (Initial Certification)

Number: 17-08

Date: July 2017

Expires: Until Rescinded

Authority: California Education Code, Section 8263.1

Attention: Executive Officers and Program Directors of Child Development Programs


The purpose of this Management Bulletin (MB) is to notify contractors of the revised income ceiling to be used to determine income eligibility for families at initial certification for subsidized child development services.

This MB supersedes MB 11-06.


Assembly Bill 99, Chapter 15, Statutes of 2017 amended, among other things, California Education Code (EC) sections 8263 and 8263.1 resulting in changes to the following requirements:

  • State Median Income (Initial Certification)
  • Graduated Phase-out (Recertification)
  • Updated Income Rankings
  • Revised Family Fee Schedule
  • Minimum Twelve-Month Eligibility

A separate MB will be issued for each of the requirements listed above. Please refer to the Other Relevant Information section below for more information.


Assembly Bill 99 amended EC Section 8263.1(a) to provide that, for purposes of establishing initial income eligibility for services, a family’s adjusted monthly income must be at or below 70 percent of the most recent State Median Income (SMI), adjusted for family size, as calculated by the California Department of Finance (DOF) pursuant to the formula set forth in EC Section 8263.1(c). 

Once determined and certified as income eligible for services, families remain income eligible until their adjusted monthly income exceeds 85 percent of the most recent SMI, adjusted for family size. The schedule of income ceilings to establish ongoing income eligibility are included in MB 17-09 (Graduated Phase-out [Recertification]). Pursuant to EC Section 8263(h)(2), once a family is certified or recertified as income eligible for services, they have an obligation to report increases in income that exceed the 85 percent threshold. After reporting, the contractor must redetermine the family’s ongoing eligibility for child care services, including eligibility for other state or federally funded child care programs. As explained below, contractors must notify parents at the time of initial certification, and at recertification, of the dollar amount that equals 85 percent of the SMI, based on their family size. Contractors must also inform the family of the requirement to report when their income exceeds this dollar amount.


Effective July 1, 2017, at initial certification, a family will be considered income eligible if that family’s adjusted monthly income is at or below 70 percent of the SMI, adjusted for family size. The SMI to be used is that calculated by the DOF pursuant to EC Section 8263.1(c).  

For Fiscal Year 2017­–­18, contractors must use the following chart when determining initial income eligibility.

Schedule of Income Ceilings (70 percent SMI) for Initial Certification Child Care and Development Programs*
Family Size Family Monthly Income Family Yearly Income






*Ceilings based on 2015 American Community Survey (ACS) information provided by DOF. Ceilings may be revised yearly to reflect most current ACS information.

When the family’s basis of eligibility is income, contractors must inform parents, at the time of initial certification and at recertification, of the requirement to report when their income exceeds the exit threshold. Specifically, contractors must inform the parent in writing of the maximum adjusted monthly income the family could earn, based on the family size most recently certified, before the family is no longer income eligible for services. To do this, the contractor must provide the family with a copy of the most recent Schedule of Income Ceilings (85 percent SMI) for Recertification, as published by the State Superintendent of Public Instruction, with the maximum adjusted monthly income the family may earn clearly identified on the table.

As will be detailed in future MB 17-14: Twelve Month Eligibility, a family that meets eligibility requirements at initial certification or recertification is considered eligible until the next recertification. A payment made by a child development program for a child during this period will not be considered an error or an improper payment due to a change in the family’s circumstances during that same period. (EC Section 8263[i]).

For example, the maximum eligibility amount (threshold) for a family of four receiving subsidized services would be an adjusted monthly income of $5,922. The contractor must provide a copy of the most recent Schedule of Income Ceilings (85 percent of the SMI) for Recertification clearly indicating the maximum adjusted monthly income of $5,922 for a family of four. Continuing this example, if eight months later, the family of four reports their adjusted monthly income is over $5,922, this triggers EC 8263(h)(2) requiring the contractor to recertify the family. If the family does not meet any other category of eligibility, the contractor must disenroll and issue a Notice of Action citing the family has exceeded the 85 percent of the SMI adjusted for family size. As a reminder, EC Section 8263 (c) provides that if a family is no longer eligible to receive services, but is eligible for another program, they may be able to continue to receive services if the contractor is able to transfer the family’s enrollment to another program.  

The Early Education and Support Division will provide Technical Assistance related to the implementation of program requirements impacted by the Budget Act throughout Fiscal Year 2017–18.

Other Relevant Information

For more information on the requirements, please see the associated management bulletins linked below:

If you have any questions regarding the information in this MB, please contact your assigned Early Education and Support Field Services Consultant via the CDE’s Consultant Regional Assignments Web page located at, or by phone at 916-322-6233.

Return to Top

Questions:   Early Education and Support Division | 916-322-6233
Last Reviewed: Wednesday, September 27, 2017
Recently Posted in Child Development
  • Management Bulletin 18-09 (added 29-Nov-2018)
    Management Bulletin 18-09 notifies contractors with alternative payment programs of new legislation regarding electronic banking.
  • Management Bulletin 18-13 (added 26-Nov-2018)
    Management Bulletin 18-13 Travel Requirements
  • CDMIS Electronic File Upload Webinar (added 24-Oct-2018)
    Materials for the Child Development Management Information System (CDMIS) Electronic File Upload Webinar held October 30, 2018.