BILL ANALYSIS
AB 22
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Date of Hearing: March 27, 2007
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall, Jr., Chair
AB 22 (Lieber) - As Introduced: December 4, 2006
SUBJECT : CalWORKs; maximum family grant.
SUMMARY : Repeals the rule denying incremental payments for
children born to a family which has received CalWORKs for 10
consecutive months. Specifically, this bill :
1)Makes finding and declarations:
a) Recounting the history of the Aid to Families with
Dependent Children (AFDC) program, efforts to reduce
welfare dependency, and the adoption of child exclusion or
"family cap" measures, known in California as "maximum
family grant" (MFG), denying benefits for children born
into families receiving aid;
b) Describing and refuting the rationale for child
exclusion policies;
c) Describing research on the link between child poverty
and poor health, developmental and social outcomes; and
d) Asserting that repeal of the MFG would simplify county
CalWORKs administration and costs.
2)Repeals the provision in state law eliminating a CalWORKs
payment on behalf of a child born into a family that has
received aid for 10 consecutive months prior to the child's
birth.
EXISTING LAW :
1)Provides for the California Work Opportunity and
Responsibility to Kids (CalWORKs) program, under which
counties provide cash assistance, welfare-to-work, child care
and other services to qualified low-income families.
2)Denies payment under CalWORKs on behalf of a child born into a
family that has received aid for 10 consecutive months prior
to the child's birth, subject to specified exceptions:
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a) The child was conceived as a result of rape or incest,
if reported to a law enforcement agency, medical or mental
health professional or social services agency prior to or
within three months after the birth of the child;
b) The child was conceived as a result of contraceptive
failure if the parent was using an intrauterine device,
Norplant or sterilization of either parent.
FISCAL EFFECT : According to previous estimates of the
Department of Social Services, restoration of eligibility would
affect an estimated 69,000 households. If the average cost per
case is in the range of $118-$139, the ongoing cost could exceed
$100 million per year. However, there would likely be some
administrative savings resulting from the elimination of the
implementation of the rule, as well as potential long-term
savings to the extent that the incidence of child poverty is
reduced.
COMMENTS : This bill repeals the state's "maximum family grant"
(MFG) rule, which denies CalWORKs cash assistance for the
additional needs of children born into a CalWORKs family that
has been receiving aid for 10 consecutive months. The rule is
variously known as a "family cap" or "child exclusion." Only in
California is the policy known as maximum family grant.
Nationally, it is most commonly called a family cap.
The author argues that child exclusion rules are premised upon
the false notion that assistance paid on behalf of all children
encourages low-income mothers to conceive and bear children they
cannot afford for the purpose of increasing the family's income.
She also asserts that "repealing child exclusion would simplify
county administration and eliminate costs associated with
notifying welfare recipients of this law and requiring social
service workers to determine the MFG status of a child through
evaluation and administrative hearings."
The bill's supporters cite research studies disputing the
premise, and argue further that the subsequent enactment of
federal and state welfare reform, with time limits and stricter
work requirements, has further undermined the original rule's
rationale. Moreover, the denial of the incremental assistance
deepens the poverty of affected children, resulting in poorer
health, developmental and social outcomes.
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The effect of the MFG is to freeze a family's benefit when a
child is born, forcing the family to subsist on the same cash
income despite the increasing needs of the newborn. A mother of
one child who gives birth continues to receive a maximum of $584
per month rather than $723 otherwise payable for a family of
three, a loss of $139 per month. The impact is slightly smaller
for larger families - a family of four into which a child is
born loses $118 per month. There is no MFG in the food stamp
program, so the family's food stamp allotment would increase
with the added member, and the newborn is categorically eligible
for Medi-Cal. Additionally, state law provides that child
support collected on behalf of an excluded child be paid
entirely to the family rather than to the state or county as
reimbursement for public assistance, and is not considered
income for purposes of public benefit calculations.
The effect of the MFG is similar to the impact of the 60-month
time limit or welfare-to-work sanction, although in those cases
the grant is reduced by eliminating the adults from the
assistance unit. As noted by Western Center on Law and Poverty,
"[m]ore than half the current CalWORKs cases in California
receive a reduced grant of some kind."
Sponsors cite prior estimates of the Department of Social
Services that the MFG results in a reduction in aid to 69,000
CalWORKs households per month.
Background and History of the Maximum Family Grant (MFG)
The current MFG rule was adopted as part of the 1994-95 state
budget agreement. AB 473 (Brulte), Chapter 196, Statutes of
1994. It has not been amended since its original enactment.
The early 1990's, prior to 1996 enactment of federal welfare
reform, witnessed a hotly contested debate over the existence
and nature of "intergenerational" welfare and the role of public
assistance in family formation patterns. The state's "maximum
family grant" (MFG) was modeled on the family cap policy adopted
in New Jersey in the 1992. Prior to enactment, it was a
component of Proposition 165, a welfare reform and budget powers
initiative placed on the ballot in 1992 by Governor Wilson. The
initiative was rejected by voters, 54-46%.
The MFG was passed three years before the state created the
CalWORKs program implementing the federal Personal
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Responsibility and Work Opportunity Reconciliation Act of 1996
(PRWORA). At the time AB 473 passed, the state still operated
an Aid to Families with Dependent Children (AFDC) program.
Since MFG was inconsistent with AFDC policies and regulations,
the state was required to seek a federal waiver, as New Jersey
had done to implement its family cap policy. The state's waiver
application was the subject of a vigorous opposition effort, and
was delayed due to differences with federal administrators over
the policy's coverage, until passage of PRWORA eliminated the
need for the state to obtain a waiver to implement it.
Fewer than half the states - 22 - currently apply a family cap.
Fifteen adopted it before the 1996 federal welfare reform act,
as did California, and nine adopted the policy afterwards. In
recent years, two states - Illinois and Maryland - have acted to
end the family cap. Illinois is phasing out the policy
statewide, and Maryland allowed localities to decide whether to
apply it, all of whom opted out since 2002.
Some states with family cap policies have adopted mitigating
features: two states apply a partial cap, another excludes
children with disabilities, four provide benefits through a
voucher payment to a third party, three exclude a larger share
of earned income when a child is excluded and one excludes
families where the woman was a victim of domestic violence
during the period of conception.
The MFG policy presumes that the incremental aid paid on behalf
of a child born to a family receiving assistance creates a
financial incentive for a mother to bear a child she cannot
afford. This is asserted to perpetuate intergenerational
welfare receipt, excessive fertility rates for low-income
mothers, and limit a family's ability to become self-sufficient
through employment. The MFG policy was intended to discourage
out-of-wedlock births among families receiving public aid.
Evidence and research on the impact of the family cap
While several studies have sought to determine the impact of
family cap policies on childbearing patterns among low-income
families, there is no conclusive evidence demonstrating its
effectiveness in reducing out-of-wedlock births. A 2001 General
Accounting Office report describing the experience with family
cap policies concluded, "Due to the limitations of the existing
research, we cannot conclude that family cap policies reduce the
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incidence of out-of-wedlock births, affect the number of
abortions, or change the size of the TANF caseload." The GAO
noted that most studies have been unable to isolate the impact
of family cap policies from other welfare reform measures
adopted simultaneously, or from the general societal decline in
birthrates among teenagers and for second children for women
aged 15-24 from 1991 to 1997.
A controversial 1998 Rutgers University study of the original
New Jersey experience found that the cap produced a 9-12 percent
lower birthrate for ongoing and new cases, but a 14 percent
higher abortion rate for new cases. However, that study's
methodology has been challenged due to confusion among
experimental and control group members as to whether or not
their benefits were affected by the cap; the GAO found its
evidence "weak." An Arkansas study from 1997 found no evidence
of any effects on births. Studies subsequent to 2001 have
similar failed to find that family cap policies produce lower
nonmarital births. A paper published by the National Bureau of
Economic Research in 2002 concluded, "[T]he widespread adoption
of family cap as a state welfare policy appears ineffective at
best and misguided at worst. Women are not responded by having
fewer births, and consequently, fewer resources are being
provided per child on welfare."
The GAO report also noted the absence of any research evaluating
the impact of child exclusion policies upon family poverty. It
recommended that Congress authorize further research using more
rigorous methodologies to examine the effects of the family cap.
Supporters of AB 22 cite research demonstrating the links
between child poverty and poor health, lower IQ, early school
failure, and increased rates of behavioral problems.
California's MFG Exceptions
The exceptions to the exclusion of children in California's MFG
rule are exceedingly narrow. As described above, they consist
only of (1) rape or incest documented by a report to a law
enforcement agency, mental health professional or social
services agency, and (2) conceptive failure caused when the
method of contraception was sterilization, Norplant or
intrauterine device (IUD).
While only a minority of states have adopted family cap
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policies, several include additional mitigating measures. These
include partial rather than full denials of additional aid,
exceptions for disabled children, use of third-party vouchers,
and additional exceptions, e.g., for victims of domestic
violence.
Additionally, the MFG was passed three years before the state
enacted legislation implementing the federal welfare reform law,
which included adoption of the Family Violence Option (FVO).
That provision gave states the option to "waive, pursuant to a
determination of good cause, other program requirements such as
time limits ?, residency requirements, child support cooperation
requirements, and family cap provisions, in cases where
compliance with such requirements would make it more difficult
for individuals receiving assistance under this part to escape
domestic violence or unfairly penalize such individuals who are
or have been victimized by such violence, or individuals who are
at risk of further domestic violence."
California adopted the FVO when it enacted AB 1542 and created
the CalWORKs program in 1997. Welfare & Institutions Code
11495 et seq. The law allows waiver of a program requirement
for a recipient who has been identified as a victim of abuse
when it is determined that good cause exists, i.e.,
participation is detrimental or unfairly penalizes the
individual or family. For many women, an abusive relationship
may result in conception of a child even though it may not have
been the result of rape or incest, or may not have been not
reported to authorities. Under the FVO, however, there may be a
basis for an exception to the MFG exclusion. However, neither
the state's FVO provisions nor the MFG statute recognize a
possible exception due to family violence.
Moreover, section 11495.25 provides that sworn statements by a
victim of past or present abuse be sufficient to establish abuse
"unless the agency documents in writing an independent,
reasonable basis to find the recipient not credible." The
section lists a variety of types of evidence to be considered,
including official government records and documents, evidence
from domestic violence programs, and statements from individuals
with knowledge of the circumstances of abuse. Verification
permitted under the FVO is thus more flexible than that required
for an exception to the MFG.
Potential amendments and alternatives
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Given the substantial cost (likely over $100 million) of a
complete repeal of the MFG rule, the author may wish to consider
less costly alternatives which would mitigate the impact of the
rule for a smaller number of families.
1)"Partial cap" - a reduction of half the increase otherwise
provided to the first additional child, but a full cap for
subsequent children born to a family on aid (as is currently
the policy in Florida).
2)Payment on behalf of a child with a physical or mental
disability (Indiana).
3)Give counties the option of covering children now excluded
(Maryland).
4)Add an exception for victims of family violence, and conform
the verification process for exceptions to that used for
family violence cases (Massachusetts).
5)Phase-out of the rule by initially only repealing it as to new
births after a date certain (e.g., July 1, 2009), gradually
applying the repeal to existing excluded children over a
defined period, e.g., three years, as was done in Illinois.
This reduces costs in the budget year, but not as to ongoing
long-term costs.
REGISTERED SUPPORT / OPPOSITION :
Support
East Bay Community Law Center, co-sponsor
Women of Color Resource Center, co-sponsor
ACCESS/Women's Health Rights Coalition
American Civil Liberties Union
American Federation of State, County and Municipal Employees
Asian Communities for Reproductive Justice
CA State University, Bakersfield, MSW Students (3)
California Catholic Conference of Bishops
California Church Impact
California Commission on the Status of Women
California Immigrant Policy Center
California National Organization for Women
California Partnership
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California Women's Law Center
Child Care Law Center
County Welfare Directors Association
Crystal Stairs, Inc.
Family Violence Law Center
JERICHO
Justice Now
Lambda Letters Project
Legal Services for Prisoners with Children
Mexican American Legal Defense Fund
Physicians for Reproductive Choice and Health
Western Center on Law and Poverty
Women's Foundation of California
Opposition
None on file
Analysis Prepared by : Casey McKeever / HUM. S. / (916)
319-2089