BILL ANALYSIS �
SB 672
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Date of Hearing: August 13, 2013
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Mark Stone, Chair
SB 672 (Leno) - As Amended: August 5, 2013
SENATE VOTE : 33-6
SUBJECT : CalFresh: eligibility: guidelines
SUMMARY : Simplifies the process for reporting dependent care
expenses for purposes of calculating CalFresh benefits.
Specifically, this bill :
1)States the Legislature's intent to support an increase in
CalFresh benefits to low-income working families by
simplifying the verification of their dependent care expenses.
2)Requires the Department of Social Services (DSS) to issue
guidance to counties to simplify the verification of dependent
care expense deductions for purposes of determining a
household's eligibility for, or amount of, CalFresh benefits.
3)Requires the guidance from DSS to establish that dependent
care expenses shall be considered verified upon receipt of a
self-certified statement of monthly dependent care expenses
unless federal law or guidance requires additional
documentation.
4)Provides that a county agency may request additional
documentation to verify dependent care expenses if the
verification received is questionable.
5)Requires the Department of Social Service (DSS) to adopt
regulations to implement the changes to the process for
considering dependent care expenses by January 1, 2015 and
authorizes DSS to implement these changes by all-county
letters or similar instructions until January 1, 2015.
EXISTING LAW
1)Establishes, under federal law, the Supplemental Nutrition
Assistance Program (SNAP) pursuant to the Food Stamp Act of
1964 and establishes, in California statute, the CalFresh
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program to administer the provision of federal SNAP benefits
to families and individuals meeting specified criteria. (7
USC �2011 et seq., WIC 18900 et seq.)
2)Establishes, under federal law, eligibility requirements for
receipt of SNAP benefits, including income that is at or below
130% of the federal poverty level and is determined to be a
substantial limiting factor in permitting a recipient to
obtain a more nutritious diet, as specified. (7 CFR 273.9)
3)Limits SNAP benefits for an able-bodied adult without
dependents to three months of aid within a three-year period
unless that recipient works, or participates in an approved
work activity, for at least 20 hours per week, and authorizes
states to request a waiver of this requirement, as specified.
(7 USC �2015 (o))
4)Authorizes states to elect to mandate verification of certain
information that is used to establish SNAP program eligibility
or benefit levels, provided that the information furnished by
the applicant or recipient is not questionable, and authorizes
states to establish their own standards for verification of
such information, provided that the standard is applied
equally to all applicants or recipients and does not allow for
inadvertent discrimination. (7 CFR 273.2 (f)(3))
5)Requires state agencies to verify questionable factors that
would affect SNAP program eligibility or benefit levels prior
to accepting certification of such information from a
household. (7 CFR 273.2 (f)(2))
6)Requires certain deductions, under federal law, when
calculating a household's income for purposes of determining
SNAP eligibility or benefits level, including a deduction for
dependent care expenses, provided that the dependent care
enables a member of the household to accept or continue
employment, or training or education that prepares him or her
for employment. (7 U.S.C. �2014)
FISCAL EFFECT : According to the Senate Appropriations
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Committee:
1)One-time, minor increased DSS workload to issue guidance to
counties. Potential additional costs of about $150,000
(General Fund) to the extent the development and adoption of
revised regulations are required to implement the provisions
of this bill.
2)Potential near-term state-reimbursable costs to county
agencies for costs associated with implementation of the
revised eligibility process of verification of dependent care
expenses.
3)Potential administrative cost savings in future years to the
extent the provisions of this bill result in administrative
efficiencies.
4)Significant increase in the amount of CalFresh benefits
low-income families receive (potentially in the hundreds of
thousands to millions of dollars in Federal funds) due to
increased participation as a result of streamlining the
application process.
5)Increased administration (Federal/General Fund) costs for
newly eligible (not existing) cases would be offset in minor
part by increased sales tax revenue on the sales of taxable
goods.
COMMENTS : By simplifying the verification of dependent care
expenses when determining a household's eligibility for CalFresh
or the household's authorized benefit level, this bill seeks to
ensure California's working poor families have access to
necessary nutrition benefits. With this bill, some households
may become newly eligible for CalFresh benefits because they
will be able to more easily factor their dependent care costs
into their income calculations, whereas other households might
see an increase in their CalFresh benefit amounts, provided that
they don't already receive the maximum CalFresh allotment.
Background : CalFresh benefits, which are entirely funded by the
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federal government through the Supplemental Nutrition Assistance
Program (SNAP), are made available to eligible low-income
families on a monthly basis for food purchases. The United
States Department of Agriculture (USDA) sets specific
eligibility requirements for SNAP programs across the United
States, including a gross and net income asset test, work
requirements, and other documentation requirements. The maximum
allowable gross income is 130% of the Federal Poverty Level
(FPL). Households with elderly or disabled members are not
subject to gross income criteria but must have a net monthly
income at or below 100% of the FPL. Other households must meet
both gross and net monthly income tests. Additionally,
resources, such as cash on hand, generally cannot exceed $2,000,
or $3,250 for households in which there is a household member
who has a disability or is 60 years of age or older. CalFresh
is administered locally by county welfare departments, and the
federal, state, and county governments share in the cost of
administration of the program. Based on recent data from the
Department of Social Services, the average monthly CalFresh
benefit per household is $334 ($153 per person or $5.10 per
day), providing modest benefits to around 1.9 million households
in California. More than 60% of CalFresh households include
children.
Because the monthly CalFresh benefits provided to recipients are
funded with 100% federal dollars, increasing the distribution of
CalFresh benefits to eligible households results in a boost to
the local economy, which is especially important to low-income
areas. According to Moody's Analytics and the USDA, every
dollar of federal SNAP benefits spent results in $1.79 in
economic activity. Additionally, a 2012 policy brief released
by the National Poverty Center, titled "Extreme Poverty in the
United States, 1996 to 2011," found that SNAP benefits were
effective in reducing extreme poverty within that time period
and noted that expansion of SNAP programs could be particularly
beneficial in reducing extreme poverty in nonelderly households
with children.
CalFresh income and benefits calculations : When calculating a
CalFresh household's income, certain deductions are applied, the
amounts of which are prescribed in federal SNAP laws and are
sometimes adjusted based on the Consumer Price Index. These
include, for example, a standard deduction based on household
size, an earned income deduction, medical expense deductions for
households containing a disabled or elderly person, a utility
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allowance, and a dependent care deduction for the actual costs
paid for by a member of the household, provided that the
dependent care is necessary for a member of the household to
obtain or maintain employment, or an education or training
program that will lead to employment. The earned income
deduction (20% of earnings to account for work-related expenses
and payroll taxes) and the dependent care deduction provide a
direct benefit to CalFresh households with working adults,
thereby supporting their continuation in, or return to, the
workforce.
The USDA's Thrifty Food Plan is the basis for the formula used
to calculate SNAP benefits levels. This plan is based on
estimates of the cost of providing low-cost, nutritious meals to
a household, factoring in the age of each household member. As
of June 2013, the estimated cost of food prepared at home for a
family of three with two parents, ages 19 to 50 years, and a
child between 9 and 11 years of age is $497.30 ($16.57 per day
or $5.52 per meal for the entire household). While the Thrifty
Food Plan estimates are revised every year to keep pace with
changes in food prices, the anticipated costs of food under the
plan can still be prohibitive as families seek access to
sufficient amounts of healthier foods.
Once a household is deemed eligible for CalFresh based on
meeting citizenship, gross income and resource requirements, the
household's benefit level-or allotment-is calculated by
multiplying the household's adjusted net income by 30% (because
it is assumed a household will spend around 30% of its net
income on food) and subtracting that number from the maximum
monthly SNAP allotment. The current federally-established
maximum monthly SNAP allotment for a household of two is $367
($12.23 per day, per household), which increases to $526 per
month for a household of three ($17.53 per day, per household).
This means, for example, that a household of two with an
adjusted net monthly income of $1,000, after applicable
deductions are applied, would receive a CalFresh benefit of $67
($1,000 x .3 = $300, and $367-$300 = $67). While it is assumed
that this household of two will spend $367 per month on food
(the CalFresh allotment plus 30% of the adjusted net monthly
income), it does not fully factor in some other out-of-pocket
expenses a family may have (e.g., clothing and transportation).
Allowable purchases : Strict requirements are in place for
purchases that can be made with CalFresh benefits, which are
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provided through an ATM-like electronic benefits transfer (EBT)
card. Unlike other types of benefits that may be accessed
through an EBT card, CalFresh benefits cannot be withdrawn in
cash at point-of-sale terminals or at ATM machines. Benefits
can be used to purchase food items to be prepared and consumed
at home, as well as seeds and plants that can produce food for a
household. CalFresh benefits cannot be used to purchase
non-food items, such as alcohol and tobacco products, medicine,
household supplies, vitamins, or soaps and paper products
necessary for personal hygiene.
CalFresh and California's low-income workforce : According to
the US Census Bureau's 2011 American Community Survey, 34% of
California's working families were deemed low-income, meaning
their wages put them below 200% of federal poverty. Nationwide
data from the Center on Budget and Policy Priorities reveals
that 62% of SNAP households with children have at least one
adult that's working while the household is receiving benefits.
This translates to over 700,000 low-income, working households
with children receiving CalFresh benefits in California. While
work training and education programs can greatly improve
opportunities for sustained, gainful employment for parents in
the workforce, access to supports like dependent care for their
children is an essential component in allowing parents to take
full advantage of those employment opportunities.
Need for the bill : Existing federal law and guidance already
provide states with flexibility in how they verify certain
factors that influence a household's SNAP program eligibility or
benefit levels. Within this flexibility, states are allowed to
simplify their verification processes by permitting
self-certification of certain income deduction information from
applicants or recipients, such as out-of-pocket dependent care
costs. However, the author and supporters of this bill assert
that because the DSS Manual of Policies and Procedures allows
each county to choose to mandate verification of dependent care
expenses, there is inconsistency throughout the state in how the
verification requirements are applied. By standardizing a
simplified verification process in state law, this bill will
prevent counties from implementing requirements that are more
stringent than federal requirements.
According to the author, "SB 672 continues California's efforts
to maximize the participation of working families in CalFresh by
simplifying the process to report child care expenses.
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According to FNS (USDA Food and Nutrition Service) surveys, in
FY 2010 only 7.7% of SNAP families used the [dependent] care
deduction, and of those families, the average deduction was
$224, which probably does not reflect the full cost of child
care.
Federal guidance now allows for a simplification of the
dependent care deduction, including self-certification of
expenses. SB 672 would require California to use this
simplified process when verifying child care expenses for
low-income, working CalFresh applicants and recipients. This
bill will connect thousands of working families with more
adequate CalFresh benefits, helping them get the healthy food
they need."
Simplifying the process for determining dependent care
deductions will further streamline access to CalFresh benefits
for needy households in which adults are working to support
their families. Additionally, through increasing participation
in the CalFresh program and potentially increasing benefits
levels for current CalFresh recipients, more federal dollars
will flow into the state, thereby promoting economic growth and
improvement in local communities.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees
(AFSCME), AFL-CIO
California Catholic Conference, Inc.
California National Organization for Women (California NOW)
California WIC Association
Coalition of California Welfare Rights Organizations, Inc.
First 5 LA
LIUNA Locals 777 & 792
Professional Association for Childhood Education (PACE)
St. Anthony Foundations
Violence Prevention Coalition of Greater Los Angeles
Western Center on Law and Poverty
Opposition
None on file.
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Analysis Prepared by : Myesha Jackson / HUM. S. / (916)
319-2089