Intellect™
HOW IS SHARE OF COST DETERMINED?
Share of cost is calculated on a monthly basis by deducting a set amount called a 'maintenance need level' from the net income:
Share of Cost = Net Income - Maintenance Need
Net income is established by subtracting any allowable exclusions from the gross household income. Gross income includes earned income (earnings from a job), as well as other sources of income like disability payments or alimony. There are approximately 40 allowable exclusions from gross income, including deductions for educational expenses, dependent care, alimony payments, and an earned income deduction.
The earned income deduction is the amount deducted for earnings from a job; it is intended to encourage recipients to work. For aged, blind, and disabled, the main earned income deduction is determined by the 65 1/2 rule: The first $65 is deducted off the monthly gross earned income, and the balance is divided in half. For families, the first $90 of monthly gross earned income is deducted. Additional earned income deductions may apply depending upon individual circumstances.
The maintenance need level is determined by state law, subject to federal guidelines. California is required by federal law to set maintenance need levels that will permit medically needy persons to meet their basic needs for food, clothing, and shelter. However, federal law also limits maintenance need by establishing a maximum allowable level.