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CAPS Policy – Income Calculations No.: CAPS/00-8 Effective Date: 10/01/2016 Revised: 10/06/2025 Revision Effective: 10/06/2025

CAPS Policy Manual

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LEGAL AUTHORITY: Federal Register: 45 Code of Federal Regulation (CFR) 98 and 99

Cross Reference/See Also: CAPS Family Unit Policy (CAPS/00-5), CAPS Eligibility Requirements Policy (CAPS/00-6)

Note: Definitions of words or phrases in bold are located in Definitions and Acronyms. Only the first occurrence of the defined words or phrases are bolded.

8 INCOME CALCULATIONS

Purpose Child care services are provided to families who meet eligibility criteria which include income guidelines. The purpose of this policy is to provide guidelines for (1) determining the types of applicable and non-applicable income, (2) obtaining validation of income, and (3) calculating household wages to ensure families meet the income requirements to participate in the Childcare and Parent Services (CAPS) program.

Scope This policy applies to all employees of the Department of Early Care and Learning (DECAL) all parties responsible for the administration of the CAPS program, parents, and child care providers who receive subsidies administered by DECAL on behalf of parents.

Gross Income The family’s gross applicable income must meet income guidelines to participate in the CAPS program. 8.3.1 When a family is initially approved for CAPS services, the gross applicable income of the family unit must be equal to or less than the current State Median Income (SMI) for initial eligibility as defined by CAPS. Refer to the CAPS Maximum Income Limits Chart (Appendix A).

8.3.2 During the eligibility period, if the family’s gross applicable income increases but remains at or below the maximum allowable federal limit of 85% SMI, the family will remain in the program with no impact to eligibility or family fee until redetermination.

8.3.3 At redetermination, if a family’s gross applicable income increases but remains at or below the maximum allowable federal limit of 85% SMI, the family will continue to be eligible for the program. The family fee will be calculated at redetermination based on the family’s most recent gross applicable income.

8.3.4 If at any point during the eligibility period the family’s gross applicable income exceeds 85% of the current SMI for a period of four or more consecutive weeks, the family is no longer eligible for CAPS. The family must be notified at least 14 calendar days prior to case closure, which is referred to as the adverse action period. Since this is a change in policy that affects entire populations, the closure of the CAPS case is not appealable. Refer to the CAPS Maximum Income Limits Chart (Appendix A).

8.3.5 Failure to provide verification of income for a family unit may result in a delay in processing or denial of the application.

Applicable Income 8.4.1 Income received by all adults in the family unit that is counted towards the maximum allowable income limit includes, but is not limited to: • Wages or Salary – gross income of all the adults (those 18 years of age and older) in the family unit. Refer to the CAPS Family Unit Policy (CAPS/00-5) for more information about the family unit. • Base pay for military personnel • Net income from self-employment • Unemployment Compensation