Will Unemployment Benefits and Stimulus Payments Impact Financial Aid?

Q: If a student receives unemployment benefits during COVID-19, do they need to report them as income on the FAFSA? What about other benefits like stimulus payments or emergency aid a student receives from their campus?

A: Unemployment benefits, including those received in connection with the Coronavirus pandemic, must be reported as income on the FAFSA.  Since the FAFSA is on a prior-prior year basis, this income, which will be reported on their 2020 federal income tax return,  and would be reported on the 2022-2023 FAFSA but would not impact their current financial aid award.

In contrast, Economic Impact Payments, or stimulus checks, are not considered taxable income and do not affect their financial aid eligibility, either now or in the future. These checks do not need to be reported on the FAFSA.

In addition, emergency financial aid grants to students and other financial aid received from the government in connection with the Coronavirus pandemic do not need to be reported as income on the FAFSA and do not affect students’ financial aid. Emergency aid from other than a governmental source, however, including emergency aid made available by a college campus not paid for by CARES Act funding, may be considered “Estimated Financial Assistance” and may reduce a student’s financial aid award. In this scenario, students should request that the financial aid office exercise professional judgment to increase the student’s cost of attendance to make room for the aid.

For further information on student emergency aid and taxation, refer to the U.S. Department of Education’s guidance.

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California Legislature Resumes

Q: Now that the California Legislature has resumed, what are key hearings, deadlines, and guidance for participation during the continued Covid-19 state of emergency? How will I know if a bill I care about is moving forward or held? 

A: After a legislative pause due to the coronavirus pandemic, the California State Assembly reconvened Monday, May 4, 2020 and the Senate will resume May 11, 2020. Due to the risk of spread of Covid-19, hearings are held virtually with telephonic access for public comment and in-person attendance is discouraged. Guidance to the public requests that people do not enter the Capitol if they have a cough or fever, or are monitoring Covid-19 symptoms. People are encouraged to watch and participate from home. Opportunities are provided to submit written testimony and to make public comment by phone. For anyone needing to attend in person there is a request to maintain a minimum six-foot distance from one another. Capitol restrooms are equipped with soap and people are asked to wash hands often and use hand sanitizer.

The Assembly and Senate Daily Files are updated to include the new hearing dates, agendas and information for how to view the hearings. There will be one hearing per committee in the month of May. Based on the ongoing financial impact of Covid-19 on the economy, legislators were asked to restrict their legislative items only to those issues related to addressing Covid-19, homelessness, and wildfire response. Many bills previously set to be heard will now be held and will not move forward this year. To learn the status of legislation, search by bill number here and click on the status tab.

Hearings important to transition age youth and foster youth are the following:

To learn more and support JBAY’s legislative advocacy, visit our take action page, here.

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Many More Youth are Entitled to Stimulus Checks

Q: Some of the college youth in my foster youth program have already received their COVID-19 stimulus payments from the government, but others have not. What accounts for this difference and what should I tell youth who have not yet received payment?

A: Many people are entitled to a stimulus payment but are unaware how to receive it. Youth who have a social security number, are not claimed as a dependent on anyone else’s tax form, and earn less than $75,000 gross annually (or within these parameters if they are married, head of household or parenting) qualify for funding. As of April 13, 2020, many people automatically received direct deposits in their bank accounts if they filed 2018 or 2019 tax returns and have a bank account on file with the IRS. Everyone falling outside of this scenario must either wait a bit longer or take action to receive their check.

If the youth filed 2018 or 2019 taxes but did not provide bank account information, they should expect to receive a physical check in the beginning of May. They can also visit the IRS website to update their bank account information. However, even if they did not file a tax return, they can still receive payment by filling out this IRS form. A youth who receives Social Security Insurance (SSI) or Social Security Disability Insurance (SSDI) with no dependents, will also automatically receive a payment.

In general, qualified single filers will receive $1,200, and potentially more, if they are married or parenting. Youth are encouraged to apply, even if they are unsure if they qualify. They can check the status of their check at any time here and refer to a Q&A by the Alliance for Children’s Rights for further information on eligibility and common scenarios.

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Expanded Eligibility and Timing for Unemployment Insurance

Q: Many of the youth who I work with are part-time workers or a part of the gig economy, and they have either lost their jobs or had their hours reduced, as a result of the coronavirus. Can they still file for unemployment? 

A:

Yes, and they should apply as soon as possible. California has expanded unemployment insurance eligibility to include self-employed workers, freelancers, independent contractors, and part-time workers for up to 39 weeksMany youth who work as Lyft or Uber drivers, babysitters, dog walkers, or tutors, among other jobs, are now protected. In addition, youth who still have a job and had their hours reduced are also protected.  

In general, to qualify for unemployment insurance in California, one must have lost their job or experienced reduced hours through no fault of their own; met certain earnings thresholds during a base period; and be actively seeking new employment. To check their eligibility, youth should register as soon as possible with the State of California Employment Development Department on their phone or computer or call 1-800-300-5616 for directions on how to apply by phone, mail, or fax. 

If they qualify, youth can receive weekly benefits from $40-450, depending on their previous earnings, and right now, if approved, they would get an additional $600 week until the end of JulyFunds will arrive approximately 2-4 weeks after approval, so youth are encouraged to apply as soon as possible and should be prepared to “recertify for benefits” every two weeks. 

For more information refer to this fact sheet created by the Alliance for Children’s Rights. 

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Infant Supplement Payment Eligibility

Q: I work with parenting youth, how do I know if they are eligible for the infant supplement payment? Can both parents receive the infant supplement payment for their child?

A: The Department of Social Services has issued an All County Information Notice clarifying infant supplement eligibility, ACIN NO. I-10-20. The department clarifies that the following parenting youth populations who are living with their non-dependent child are eligible:

  • Youth under delinquency jurisdiction who are residing in foster care.
  • Nonminor dependents (NMDs) in Extended Foster Care.
  • Youth in non-related legal guardianships receiving AFDC-FC payments.
  • Youth receiving Kin-Guardianship Assistance Payment (Kin-GAP) payments.
  • Youth receiving Approved Relative Caregiver (ARC) payments.

The department further clarified that either male or female parenting youth may be eligible for an infant supplement and that all eligible teens and nonminor dependents be screened for current or expectant parents. Only one infant supplement may be paid per eligible child. If both parents are eligible, the infant supplement must be paid to the parent with primary physical custody of the child.

See more question of the week answers related to the infant supplement here.

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Satisfactory Academic Progress

Q: Many of the students I work with lose their financial aid because of satisfactory academic progress (SAP) requirements. Are there any forms of financial aid that are not subject to SAP?

A: While all forms of state and federal financial aid have some form of academic progress standards, some have more flexibility than others. A new law (SB 150) that will take effect on January 1, 2020 will allow students to continue to receive a Chafee ETV grant for two years before they lose eligibility because of SAP. If a student does lose eligibility there are specific criteria that qualify the student for reinstatement that are broader than those used for other forms of aid. To read more about this new law, click HERE.

In addition, the Promise Grant, which covers tuition costs at community colleges, is subject to different standards than sources such as the federal Pell grant and state CalGrant. While this varies by campus, typically the requirements are less stringent, and students can often maintain the fee waiver even when they no longer qualify for other forms of aid.

Finally, if a student does lose financial aid, they should be encouraged to appeal to have aid reinstated. This process can be cumbersome, and they may need support to navigate their college’s SAP appeal process.

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2019 California Earned Income Tax

Q:  I understand that the California Earned Income Tax Credit was expanded last year and that it is now available to transition-age youth, age 18 to 21, regardless of their parenting status.  Is there a minimum amount that a youth has to earn to qualify for the CalEITC? What materials are available to share with youth in my county?

A: Yes, the California EITC (CalEITC) was expanded from $400 million to $1 billion annually in the 2019-20 budget. This expansion made the following changes:

  • Expanded eligibility to families that earn up to $30,000 annually;
  • Increased the maximum credit to $2,982 for CalEITC, plus a maximum credit of $6,557 for federal EITC
  • Added a Young Child Tax Credit, which is an additional credit of up to $1,000 for tax filers who meet CalEITC requirements and have a child under six years old by the end of the year.

The California Franchise Tax Board has updated its materials for the 2019 tax year. To download the updated materials, follow this LINK.

John Burton Advocates for Youth will host a website on strategies to help transition-age youth access the CalEITC on January 30, 2020 from 10:00 a.m. to 11:30 a.m. To register, follow this LINK.

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College Benefits for Homeless Students

Q: I know that homeless students can qualify for independent status on the FAFSA as well as priority registration. If a student qualifies as independent for the purposes of the FAFSA, based on their status as a homeless student, do they automatically qualify for priority registration as well? Is the reverse true?

A: As of January 1, 2020, AB 806 will expand the definition of homelessness used for priority registration to include students who become homeless after entering college as well as those who were homeless prior to college application. As such, most students who qualify as independent on the FAFSA based on homeless status will meet the eligibility criteria for priority registration. The one exception to this is that if a student qualifies on the FAFSA based on being “self-supporting and at-risk of becoming homeless” they may not qualify for priority registration.

Other than the “at-risk” qualification, both benefits rely on the McKinney-Vento definition of homelessness, namely that the student “lacks fixed, regular and adequate housing.” Key differences between the two benefits are as follows:

  • For FAFSA a student must be unaccompanied, whereas this is not the case for priority registration.
  • For FAFSA a student must have been homeless on or after July 1 of the year in which they are applying but for priority registration, a youth can have been homeless at any time during the 24 months prior to the college receiving their application or be currently homeless.
  • For FAFSA a student must reverify their status every year whereas for priority registration once a student is verified as homeless, they retain that status for a period of 6 years or until they reach age 25, whichever comes first.

Want to learn more about how to complete the FAFSA for a homeless student? Check out our recent webinar recording HERE.

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Q of the W: Credit Reports for Non-Minor Dependents

Q: I’m working with a Non-Minor Dependent (NMD) that is experiencing identity theft. I thought requirements were in place to prevent this type of thing from happening. Do NMDs receive assistance with checking their credit histories and addressing identity theft?

A: Yes, Non-Minor Dependents (NMDs) may receive assistance from their county social worker or probation officer with checking their credit histories and addressing identity theft, however because NMDs are adults who have the choice to request their credit reports just as any other adult can under federal law, the assistance they receive is at the discretion.

County agencies are required to inform NMDs of the advisability of requesting credit reports and provide annual assistance in doing so if the NMD desires. Specifically, the social worker or probation officer must ensure the NMD receives assistance in requesting and reviewing the reports. If a NMD needs help requesting their credit reports, counties can obtain written permission from the NMD to request their credit reports on their behalf. County agencies must refer NMDs to appropriate resources to aid in clearing their credit reports of inaccuracies.

If a NMD does not request their credit reports on an annual basis, the social worker/probation officer is encouraged to continue to discuss, at monthly visits or other opportunities, the importance of checking one’s credit reports and maintaining good credit as part of a healthy financial management strategy.

Citation: California Department of Social Services, All County Information Notice I-47-19 (2019); All County Letter 14-23 (2014)

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Funding for Homes Not Yet Approved as Resource Families

Q: Can a home that is not yet approved as a Resource Family provide foster care placement on an emergency basis and still receive funding for the placement?

A: Yes. Effective July 1, 2019, when a county places a child or non-minor dependent on an emergency or temporary basis or for a compelling reason with a relative or nonrelative extended family member prior to Resource Family Approval (RFA), that emergency caregiver will receive a payment equivalent to the basic level rate, which is $1,000 for Fiscal Year 2019-20. The emergency caregiver funding is first provided on the date of placement and is funded through either the Emergency Assistance (EA) Program or, for children who are determined to be ineligible for the EA Program, through a combination of state and county funding.

Extended family members of an Indian child pending approval as a Tribally Approved Home are also eligible if the child or youth is placed on an emergency or temporary basis, however not when placed for a compelling reason.

Citation:

California Department of Social Services. All County Letter 19-84 (September 4, 2019). https://gallery.mailchimp.com/73901133dd7ea1a5581344daf/files/86bfa1e9-cfcb-40c3-9fc7-9e9899310730/19_84_ES.pdf

California Welfare & Institutions Code § 309, 361.45 & 16519.5

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