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Changes in the Treatment of Motor Vehicles For the CalWORKS Program

Changes in the Treatment of Motor Vehicles For the CalWORKS Program. ACL 13-111 & CIT 0010-14. Current Vehicle Exemption Rules.

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Changes in the Treatment of Motor Vehicles For the CalWORKS Program

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  1. Changes in the Treatment of Motor Vehicles For the CalWORKS Program ACL 13-111 & CIT 0010-14

  2. Current Vehicle Exemption Rules • Prior to 1/1/2014 applicants and recipients were able to retain non-exempt vehicles that have an equity value of $1,500 or less after subtracting $4,650 and any encumbrances from the FMV. • Existing reasons for exempting the entire value of a vehicle: • It is used primarily for income producing purposes • It annually produces income consistent with its FMV. • Necessary for long distance travel, other than daily commuting, essential to the employment of a family member. • It is used as the family’s residence. • It would be exempt under any of subparagraphs above, but the vehicle is not in use due to temporary unemployment. • It is used to carry fuel for heating family’s home, when transported fuel or water is the primary source of fuel or water for the family.

  3. New Vehicle Exemption Rule 1 • As of 1/1/2014 applicants and recipients will be able to retain non-exempt vehicles that have an equity value of $9,500 or less after subtracting any encumbrances. This replaces the old calculation. • This amount may be increased annually based on the US Consumer Price Index (CPI). • Any equity value in excess of the $9,500 vehicle asset limit will be county toward the AU’s $2,000 (or $3,250 for families w/an aged or disabled member) maximum resource limit.

  4. New Vehicle Exemption Rule 2 • New reasons for exempting the entire value of a vehicle. This is in addition to old reasons. All exempt vehicles are not considered in the $9,500 equity value limit. • Any vehicle for which ownership has been transferred to the client as a gift, donation or family transfer as defined by the DMV will not count against the family’s maximum resource limit.

  5. New Verification Rule 1 • Applicants and recipients shall be allowed to self-certify the FMV of all vehicles in the AU, as well as any encumbrances. • To self-certify the Fair Market Value and/or encumbrances clients must submit a new form: CW8O Self-Certification Form for Motor Vehicles. This form must be used if a new, non-exempt vehicle is reported on SAR7 or at their annual redetermination.

  6. New Verification Rule 2 • If a client claims a vehicle was obtained as a gift, donation or family transfer they must obtain verification from the DMV (self-certification is not allowed for this exemption) showing the reported transfer reason. • To obtain verification from the DMV the client will need to request a copy of the original title transfer or bill of sale documentation from the DMV via mail. • Requesting this verification currently costs $5.00. We are reminded of our duty to assist the client in obtaining verification and payment of fees to DMV if they are unable or request assistance.

  7. Examples: • A household self certifies on CW8O that a non-exempt vehicle is valued at $3,500 and they still owe $1,540 on it. The equity value is $2,050 thus the entire vehicle does not count toward their property. • A household self certifies on CW8O that a non-exempt vehicle is valued at $14,000 and they still owe $3,000. The equity value is $11,000. This is $1,500 more than the $9,500 limit thus we would count $1,500 toward their property limit. • A household shows verification from DMV that a vehicle was given as a gift from her father. The entire value of the vehicle, regardless of it’s potential value, is exempt from being counted toward their property limit.

  8. Functionality • C-IV is currently working on putting functionality into the system to acknowledge the new exemptions and perform the calculations to determine how much of the value is exempt. At this time however, C-IV does not do the calculations for you. You will need to over-ride the value of these vehicles until the system is updated. • The CW8O is not yet in C-IV, but we can print it out and mail it manually until it is in the system.

  9. Override vehicles w/FMV under $9500 • To exempt a vehicle where FMV is less than $9500: • Add Motor Vehicle Property record. • On the Motor Vehicle Detail page complete all applicable fields. • On the Property History Detail page select “Exempt” from the Status drop-down box. *Selecting Exempt excludes the vehicle from CW property determination when running EDBC. • Complete all remaining fields and save. • Add a journal entry and note override reason for exempting vehicle.

  10. Override vehicles transferred to client as a gift, donation or family transfer • To exempt a vehicle which was transferred to client as a gift, donation or family transfer (verified w/DMV): • Add Motor Vehicle Property record. • On the Motor Vehicle Detail page complete all fields. • On the Property History Detail page select “Exempt” from the Status drop-down box. *Selecting Exempt excludes the vehicle from CW property determination when running EDBC. • Complete all remaining fields and save. • Add a journal entry. Note the reason for exemption.

  11. CW 8O

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