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Disaster assistance payments are payments for any catastrophic event designated as a qualifying disaster by federal, state or local agencies, or certain payments for other personal hardships. 

A “Qualified Disaster” is a disaster as a result of:

• An accident involving a common carrier, such as passenger aircraft, bus line, etc.;
• A terrorist or military action;
• An event that the Secretary of the Treasury determines as catastrophic; or
• A Presidentially declared disaster.

“Qualified Disaster Relief Payments” are payments received to meet the following expenses:

• Personal, family, living, or funeral;
• Repair or rehabilitation of a personal residence, either rented or owned; and/or
• Repair or replacement of the contents of a personal residence.

Non-MAGI Medi-Cal

Disaster and emergency assistance payments, regardless of the date of receipt, and any interest earned from such payments, shall not be counted as income or property.  This exemption applies only to such payments received from federal, state, local government agencies, or disaster assistance organizations.

MAGI Medi-Cal

Most disaster assistance payments received are not counted as income (exempt).  The income type/source will determine whether the income will be exempt.

Income Type/Source and Income Treatment

• Payments from Charitable Organizations (not employer sponsored) are exempt if received as a result of disasters or emergency hardships.  These payments are considered gifts and are excluded from the gross income of the tax household.
• Insurance payments for losses in federally declared disaster areas are exempt.
• Insurance payments for losses in non-federally declared disaster areas are exempt only if non-taxable.
• Disaster assistance payments from federal or state government agencies are exempt.

Disaster assistance funds exemptions are mandated by the Disaster Relief and Emergency Assistance Act of 1974 (Public Law 93-288), Public Law 95-171, and Public Law 101-707. 

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Refer to the Procedures section below.

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