BILL ANALYSIS Ó
SENATE HUMAN
SERVICES COMMITTEE
Senator Leland Y. Yee, Chair
BILL NO: SB 672
S
AUTHOR: Leno
B
VERSION: February 22, 2013
HEARING DATE: April 9, 2013
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FISCAL: Yes
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CONSULTANT: Tepring Piquado
SUBJECT
CalFresh: eligibility guidelines
SUMMARY
This bill requires the Department of Social Services (DSS)
to issue guidance to simplify the verification of earned
income and child care expenses necessary for determining
CalFresh eligibility, as specified. This bill would impose
a state-mandated local program.
ABSTRACT
Existing Law :
1) Establishes the Supplemental Nutrition Assistance
Program (SNAP), formerly known as food stamps,
benefits. (7 U.S.C. 2011 et seq.)
2) Provides that any household with gross income below
130 percent of the poverty guidelines is eligible for
the SNAP program. (7 U.S.C. 2014 (c))
3) Provides that any household with net income below
100 percent of the federal poverty line is eligible
for the SNAP program. (7 CFR 273.9(a)(2))
4) Provides that households which contain an elderly
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or disabled member shall meet the net income
eligibility standards for the SNAP Program. Households
which do not contain an elderly or disabled member
shall meet both the net income eligibility standards
and the gross income eligibility standards for the
Food Stamp Program. Households which are categorically
eligible as defined in 273.2(j)(2) or 273.2(j)(4) do
not have to meet either the gross or net income
eligibility standards. (7 CFR 273.9)
5) Provides that the State agency shall verify, prior
to certification of the household, all other factors
of eligibility which the State agency determines are
questionable and affect the household's eligibility
and benefit level. (7 CFR 273.2(f)(2))
6) Provides that the State agency may establish its
own standards for the use of verification, provided
that, at a minimum, all questionable factors are
verified and that such standards do not allow for
inadvertent discrimination.
(7 CFR 273.2 (f)(3)(i))
7) Provides that in carrying out the supplemental
nutrition assistance program, a State agency shall not
be required to use an income and eligibility or an
immigration status verification system established
under section 1137 of the Social Security Act. (42
U.S.C. 1320b-7; 7 U.S.C. 2020p)
8) Provides that if the State agency chooses to use
the Income and Eligibility Verification System (IEVS),
it must notify all applicants for food stamp benefits
at the time of application and at each recertification
through a written statement on or provided with the
application form that information available through
IEVS will be requested, used and may be verified
through collateral contact when discrepancies are
found, and that such information may affect the
household's eligibility and level of benefits. (7 CFR
273.2 (b)(2))
9) Provides that if any adverse action is taken with
respect to any consumer that is based in whole or in
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part on any information contained in a consumer report
- the name, address, and telephone number of the
consumer reporting agency (including a toll-free
telephone number established by the agency if the
agency compiles and maintains files on consumers on a
nationwide basis) that furnished the report to the
person must be provided to the consumer orally, in
writing, or electronically. (15 U.S.C. 1681m
(a)(3)(A))
10) Provides that a household shall be entitled to a
dependent care (child care) deduction for the actual
cost of payments necessary for the care of a dependent
child if the care enables a household member to accept
or continue employment, or training or education that
is preparatory for employment.
(7 U.S.C. 2014(e)(3)(A))
Existing State Law:
1) Allocates federal Supplemental Nutrition Assistance
Program (SNAP) funds for low-income families through
the CalFresh program. Under this program, each county
provides assistance through SNAP funds. (WIC 18900)
2) Provides that the eligibility of households shall
be determined to the extent permitted by federal law.
(WIC 18901)
3) Provides that gross non-exempt income shall be
verified for all households prior to certification.
However, where all attempts to verify the income have
been unsuccessful because the person or organization
providing the income has failed to cooperate with the
household and the County Welfare Department (CWD) and
all other sources of verification are unavailable, the
CWD shall determine an amount to be used for
certification purposes based on the best available
information. Best available information may include
an applicant's affidavit. (MPP 63-300.5 (e))
This bill:
1) States that it is the intent of the legislature to
support an increase in CalFresh benefits up to 200% of
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the federal poverty line and to simplify the
verification of earned income and dependent care
expenses.
2) Requires that DSS issue guidance to clarify that
dependent care expenses be considered verified with a
monthly statement by the applicant or recipient of aid
with the federal taxpayer identification number of the
dependent care provider or other form of verification
allowed by federal law instead of verification with a
receipt from the care provider.
3) Requires DSS to issue guidance to require that
wages received in cash be considered verified upon
receipt of the statement by the applicant or recipient
of aid.
4) Require DSS to issue guidance to include that if a
county uses an electronic database for earned income
verification to determine eligibility, the county
shall:
a. Use the electronic data base to verify
income instead of requiring paper verification at
time of application or reapplication for
benefits; and
b. Inform applicants and recipients of their
right to request a copy of their electronic
employment and wage data maintained in the
database to correct errors in the database.
5) Imposes a state-mandated local program by requiring
DSS to issue guidance which imposes new duties on
counties that administer CalFresh.
FISCAL IMPACT
This bill has not yet been analyzed by a fiscal committee.
BACKGROUND AND DISCUSSION
Purpose of the bill
According to the author, SB 672 calls for the state to
maximize eligibility and enrollment in CalFresh among
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California's working families by requiring counties and
Administering Agencies to use existing employment databases
to assist and simplify the eligibility process for CalFresh
applicants, reducing the burden for CalFresh applicants to
report cash earnings, and simplifying the process to report
childcare expenses for working families. The author also
states that this bill ensures that applicants and
recipients are informed of their rights to request and
correct information in the databases, when possible.
CalFresh Benefits
Approximately 3 million low-income Californians receive
CalFresh benefits intended to improve the health and
well-being of individuals by providing a means to meet
their nutritional needs. The goal of the federal SNAP
Program, administered by the United States Department of
Agriculture (USDA), is "to alleviate hunger and
malnutrition ? by increasing food purchasing power for all
eligible households who apply for participation". The
average amount of CalFresh benefits received per household
is about $200 per month per adult.
While the federal government pays 100 percent of
SNAP/CalFresh program benefits to recipients, the federal
and state governments share administrative costs.
California, however, has had historically low participation
rates in the program. The state ranked last in 2010 among
states in use of benefits by eligible residents, and last
in use of benefits among eligible working poor families,
according to the USDA.
A November 2010 federal survey indicated that nearly 15
percent of U.S. households experienced food insecurity in
2008 and 2009, the highest number since food security
surveys were begun in 1995. Food-insecure households had
difficulty at some time during the year with providing
enough food for all household members due to a lack of
resources. Nearly 7 million Americans, or 6 percent of the
country, experienced a severe level of food insecurity in
which the food intake of some household members was reduced
and normal eating patterns were disrupted due to limited
resources. Ten percent of the country's families with
children experienced food insecurity at least once annually
during each of those years.
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Applying and Verifying
The CalFresh application process includes completing and
filing an application, being interviewed, and having
certain information verified. The County Welfare
Department is required to act promptly on all applications
and provides federally funded food stamp benefits
retroactive to the month of application to those households
that have completed the application process and have been
determined eligible.
This bill would simplify the process of applying and
receiving CalFresh benefits by establishing that child care
deductions will be considered verified when the applicant
or recipients of aid self-certifies the monthly expenses
and when the counties use electronic databases and/or 3rd
party reports to verify income.
Eligibility
According to DSS, CalFresh households, except those
containing an aged or disabled member or where all members
receive cash assistance, are subject to gross and net
income determination tests.
Gross income is defined as all non-excludable income from
any source. The maximum gross income allowed before any
deductions are considered is 130 percent of the federal
poverty line (FPL) or 165 percent of the FPL if the
household has an elderly or disabled person who qualifies
to be a separate household. If the household passes the
gross income test, then the net income test is computed.
After all deductions are assessed, the resultant amount
cannot exceed 100 percent of the FPL.
Childcare Deduction
One expense that a household may deduct from gross income
is dependent child care costs. A household shall be
entitled to a dependent care deduction for the actual cost
of payments necessary for the care of a dependent if the
care enables a household member to accept or continue
employment, or training or education that is preparatory
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for employment.
Other States
Federal laws and regulations give states the flexibility to
define the scope of allowable expenses for the dependent
care deduction. Illinois and Massachusetts accept a
beneficiary's statement of the amount paid for dependent
care. In Maryland, Minnesota, Missouri and New Hampshire
dependent care does not have to be verified unless it is
determined to be questionable. In California, DSS does not
define acceptable forms of verification of child care
expenses.
Electronic Income Verification Databases
Third-party sources of employment information, such as
National Directory of New Hire listing (NDNH) and Income
and Eligibility Verification System (IEVS), may be accessed
when additional employment verification is necessary. The
Work Number is a for-profit 3rd party resource that can be
used by counties to verify employment and income. Counties
are permitted to use the information obtained from this
source in the same manner as they would use information
provided by the employer. Therefore, no further
verification of employment is necessary.
Income and Eligibility Verification System
The Income and Eligibility Verification System (IEVS) was
established by Congress under the 1984 Deficit Reduction
Act to reduce errors in determining eligibility and benefit
levels. The implementing regulations require State agencies
to compare income reported by program applicants and
recipients with income from several sources including
Internal Revenue Service data, Social Security
Administration Data, State quarterly wage reports and
unemployment insurance benefits.
In California, county welfare departments use this
electronic database to determine eligibility and the
appropriate level of benefits by reviewing and comparing it
to case record information, and by verifying the
applicability of the matched data. The information obtained
through IEVS is used, to the extent possible, in the
determination of eligibility.
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New Employee Registry - California's New Hire Reporting
Program
All California employers must report all new employees or
those rehired within the previous last 20 days. The New
Employee Registry database can be used to provide
information on new or reinstated employment of applicants
or recipients of CalFresh. Matches are based on the Social
Security Number for the month of reported employment.
The Work Number
The Work Number is a user-paid employment and income
verification database created by TALX Corporation. TALX was
acquired by Equifax Inc. in February 2007. The Equifax
credit reporting agency, with the aid of thousands of human
resource departments around the country, has assembled The
Work Number database. It has been called the most powerful
and thorough private database of Americans' personal
information ever created, containing 190 million employment
and salary records covering more than one-third of U.S.
adults. Of the more 50,000 entities that use the service to
verify income are 6,000 social service agencies in all 50
states.
An All Counties Letter (02-22) from June 2002 specified
that counties are permitted to use The Work Number database
for employment verification in the same manner as they
would use information provided by the employer. Counties
may also use The Work Number database when required to
contact an employer for other income determinations, such
as verification of the regularity of receipt, the gross or
net amount, whether the income is excluded or exempt, or
when the county is unable to determine year-to-date
information, or the recipient is unable to provide the
necessary verification. However, DSS directs that The Work
Number should only be used as a secondary source of
verification and that counties should first contact the
recipient or applicant to request additional information or
records.
Related Legislation
AB 1970 (Skinner) 2011, would have required county human
services departments to maximize use of electronic means of
verifying applicant and recipient information. The bill was
held on the Suspense File of Senate Appropriations in
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August 2012.
Comments
1)Germane to this bill is increasing utilization of
CalFresh benefits by simplifying verification of child
care costs and wages. Staff recommends amending the
intent language to reflect the author's purpose.
SECTION 1. It is the intent of the Legislature to
support an increase in CalFresh benefits for
low-income working families by using state
options, including the option provided in Section
273.2 of Title 7 of the Code of Federal
Regulations, to increase eligibility for families
with earnings and income of up to 200 percent of
the federal poverty line and to by simplify ing
the verification of dependent care and wages. It
is also the intent of the legislature to educate
applicants and recipients of aid under this
chapter of their rights to receive a report and
to correct errors in a report issued by federally
regulated reporting agencies when the services of
those agencies are purchased by the State of
California or a County Human Services Agency to
determine eligibility or benefit level for
CalFresh.
2)The Manual of Policies and Procedures does provide
counties the ability to accept self-certification under
penalty of perjury as proof of income included in an
applicant's affidavit. Staff suggests removing this
language from the bill, as follows:
(b) Cash payment of wages shall be considered
verified upon receipt of a statement by the
employee.
3)The intent of the bill is to have the county notify
applicants and recipients of aid when an electronic
database or private vendor report is used to verify
income or employment information. DSS currently notifies
individuals when IEVS is used. Notification is not
required to be provided when counties use other
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electronic databases such as The Work Number database,
although The Work Number database does provide consumers
with a free annual Employment Data Report in accordance
with the Federal Credit Reporting Act. Other databases
that counties may use, however, are not required to
comply with the Federal Credit Reporting act. Because of
this conflicting language in law, staff recommends the
following amendment:
SEC. 2. Section 18901.1 is added to the Welfare and
Institutions Code, to read:
18901.1. (2) Inform applicants and recipients of their
right, if any , to request a copy of their electronic
employment and wage data maintained in the database and
to correct errors in the database. This notice shall be
provided when the information in the database is used to
determine eligibility or benefit level or to verify
income at any time.
POSITIONS
Support:
Western Center on Law & Poverty (Co-sponsor)
San Francisco Living Wage Coalition (Co-sponsor)
Alameda County Community Food Bank
Asian Law Alliance
California Alliance for Retired Americans
California Association of Food Banks
California Catholic Conference
California Food Policy Advocates
California National Organization for Women
(California NOW)
Coalition of California Welfare Rights
Organization, Inc.
San Diego Hunger Coalition
Mayor of San Francisco, Edwin M. Lee
Oppose:None received
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