BILL ANALYSIS Ó
SENATE COMMITTEE ON HUMAN SERVICES
Senator McGuire, Chair
2015 - 2016 Regular
Bill No: AJR 35
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|Author: |Brown |
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|Version: |June 1, 2016 |Hearing |June 28, 2016 |
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|Urgency: | |Fiscal: |Yes |
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|Consultant|Taryn Smith |
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Subject: Supplemental Nutrition Assistance Program: cash-out
policy
SUMMARY
This joint resolution requests the federal government to change
its policy in order to allow California to equitably end the
federal Supplemental Nutrition Assistance Program (SNAP)
cash-out policy, administered through the Supplemental Security
Income (SSI) and the State Supplementary Payment (SSP) programs,
in a way that would maximize benefits to, and participation
among, newly eligible individuals and mitigate or eliminate harm
to low-income families.
ABSTRACT
Existing law:
1) Establishes under federal law the Supplemental Nutrition
Assistance Program (SNAP) within the US Department of
Agriculture (USDA) to promote the general welfare and to
safeguard the health and wellbeing of the nation's
population by raising the levels of nutrition among
low-income households. It establishes SNAP eligibility
requirements, including income that is at or below 130
percent of the federal poverty level and is a substantial
limiting factor in permitting a recipient to obtain a more
nutritious diet. (7
CFR 271.1; 7 CFR 273.9)
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2) Establishes in California statute the CalFresh program
to administer the provisions of federal SNAP benefits to
families and individuals meeting specified criteria. (WIC
18900 et seq.)
3) Establishes in the Electronic Benefits Transfer (EBT)
Act a system for the distribution and use of public
assistance benefits, such as CalFresh, and requires EBT
access to be provided through automated teller machines
(ATMs), point-of-sale devices and other devices that accept
EBT transactions. (WIC 10065 et seq.)
4) Establishes in California law the SSP, which supplements
federal SSI payments in order to provide persons who are
aged, blind or disabled with assistance and services that
help them meet basic needs and maintain or increase
independence. (WIC 12000 et seq.)
5) Provides that eligibility requirements for state SSP
match federal SSI criteria, and requires a minimum level of
SSP benefits be provided in order to maintain federal
Medicaid funding, as specified. (WIC 12000 et seq.)
6) Defines the California Necessities Index (CNI) to be the
weighted average of changes for food, clothing, fuel,
utilities, rent, and transportation for low-income
consumers, and specifies the methods of computing annual
adjustments to the CNI. (WIC 12201)
7) Requires annual adjustments, based on the CNI, to
SSI/SSP payment schedules to reflect increases or decreases
in the cost of living, as specified, but further stipulates
that such adjustments shall not be made, unless otherwise
required by statute, for the 2011 calendar year and each
calendar year thereafter. (WIC 12201)
8) Establishes in federal law the national SSI program,
which provides supplemental security income to individuals
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who have attained age 65 or are blind or disabled. (42
U.S.C. 1381 et. seq.))
9) Prohibits an individual who receives SSI and/or SSP
benefits as a resident of California from receiving food
stamp benefits. (7 CFR § 273.20 (a))
10) Requires that the income and resources of certain
defined SSI recipients living in a household shall not be
considered in determining eligibility or level of benefits
of the household, as specified. (7 CFR § 273.20 (c))
This resolution:
1) Makes a series of legislative findings and resolutions
regarding the effects of California's cash-out policy for
SNAP benefits, which makes SSI/SSP recipients ineligible
for SNAP, as follows:
a) The federal SNAP offers nutrition assistance
to millions of eligible, low-income individuals and
families and provides economic benefits to
communities. Nevertheless, many low-income seniors and
people with disabilities in California, who have
difficulties obtaining sufficient food, cannot receive
assistance through SNAP.
b) SNAP, known as CalFresh in California,
supports millions of low-income Californians who meet
income, resource, and other tests. This program
provides monthly benefits through an EBT card,
analogous to a debit card that can be used to purchase
food.
c) SNAP benefits, which are available to most
households living with incomes at, or below, 130
percent of the FPL, are provided on a sliding scale
based on income, household size, and certain household
expenses.
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d) The federal SSI program provides income
support to the elderly, blind, or disabled who meet
income, resource, and other tests, and the SSP program
supplements SSI benefits.
e) The estimated average in supplemental
nutrition assistance for an SSI/SSP recipient is $135
per month, but 1.3 million SSI/SSP recipients in
California are ineligible for SNAP due to a policy
known as cash-out.
f) California's cash-out policy was established
in 1974, when the federal government began the
combined federal-state SSI/SSP program. Under the
cash-out policy, California chose the option of
cashing out SNAP benefits to SSI/SSP recipients by
including the estimated value of SNAP benefits,
approximately $10 per month in California as set in
1974, within SSI/SSP benefits.
g) By adding the $10 amount into existing SSI/SSP
payments, California reduced state administrative and
other expenditures associated with the high costs of
delivering a small amount of CalFresh benefits to each
SSI/SSP recipient on a monthly basis. The
incorporation of the SNAP benefit into the SSI/SSP
payment prevented SSI/SSP recipients in California
from being eligible for SNAP.
h) California is the only state in which SSI/SSP
recipients are ineligible for SNAP under this policy.
i) In 1974, many elderly, blind, or disabled
SSI/SSP participants were only eligible for minimal
SNAP benefit amounts, and the combined SSI and SSP
income received by participants was high enough that
it limited the amount of SNAP benefits for which
SSI/SSP recipients were eligible.
j) California's SSI/SSP recipients are now living
much closer to, or below, the FPL than they were when
the program began. In 1980, for example, an SSI/SSP
benefit put a recipient's income threshold at 128% of
the FPL. In 2016, an SSI/SSP benefit put a recipient's
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income threshold at about 91% of the FPL.
aa) Over the years, California's SSI/SSP benefits
have risen and fallen, and the annual, automatic
cost-of-living adjustment (COLA) for SSI/SSP was
repealed in California in 2009.
bb) SSI/SSP recipients in California, on average,
would be eligible for far more CalFresh benefits today
than the $10 monthly amount that they have been
receiving since 1974 as food assistance in their
SSI/SSP checks.
cc) Technology has advanced to a point where
electronic benefits could be made available to an
SSI/SSP recipient if the state developed a method of
activating an EBT card by asking questions
telephonically, or through other efficient means, to
determine if the automatically calculated benefits are
correct.
dd) California's cash-out policy hurts many
low-income seniors and people with disabilities.
Continuing the cash-out policy at this time poses many
significant risks to these individuals' health and
well-being.
ee) California's cash-out policy benefits some
mixed SSI/SSP households, where some members of the
household receive SSI/SSP benefits and other members
do not, resulting in greater CalFresh benefits overall
for the household. California could provide mixed
SSI/SSP households with alternative benefits to
replace the reduced or eliminated CalFresh benefits
resulting from an end to the cash-out policy.
1) Resolves that the Legislature requests the federal
government to change federal policy in order to allow
California to equitably end the SNAP cash-out policy in a
way that would maximize benefits to, and participation
among, newly eligible individuals and mitigate or eliminate
harm to low-income families and the approximately 60,000
medically needy children who could be made ineligible for
certain benefits under a program without the cash-out
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policy.
2) Resolves that the Chief Clerk of the Assembly transmit
copies of the resolution to the President and Vice
President of the United States, to the Speaker of the House
of Representatives, to the Majority Leader of the Senate,
to each Senator and Representative from California in the
Congress of the United States, and to the author for
appropriate distribution.
FISCAL IMPACT
According to an analysis prepared by the Assembly Appropriations
Committee, there would be ongoing costs of approximately $135
million (federal funds) for increased CalFresh benefits to the
approximately one million individuals who would become eligible
for CalFresh benefits by the elimination of the cash-out policy.
There would also be unknown potential savings to the state due
to a reduction in SSP benefits to 1.3 million SSI/SSP
recipients. Additionally, unknown costs/savings (federal funds)
associated with the approximately 300,000 SSI/SSP recipients in
mixed households where there would be a simultaneous gain in
eligibility and potential loss of CalFresh benefits within the
household due to the loss of the SSI/SSP income disregard.
BACKGROUND AND DISCUSSION
Purpose of the bill:
According to the author, after decades of budget and fiscal
changes, the $10 cash-out policy for SSI/SSP recipients is
causing them to live much closer to, or below, the federal
poverty level (FPL) than when the program began in 1974. For
example, in 1980, an SSI/SSP grant put a recipient at 128% of
FPL. In 2016, the SSI/SSP grant puts a recipient about 91% of
the federal poverty level, the author states.
In California, SSI/SSP recipients are ineligible for CalFresh
benefits because of the "cash-out" policy. California is the
only state in which SSI/SSP recipients are ineligible for these
benefits. Unfortunately, ending the cash-out without changing
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federal policy would reduce benefits for approximately 60,000
medically dependent children, per the author.
AJR 35 urges the federal government to change federal policy in
order to allow California to equitably end the SNAP cash-out
policy in a way that would maximize benefits to, and
participation among seniors, and mitigate or eliminate harm to
low income families and medically needy children.
Poverty
According to the FPL, an individual must earn at least $981 per
month to make ends meet, and avoid "poverty." In 2013, the US
Census Bureau issued a report<1> that indicates that nearly 25
percent of California's 38 million residents (8.9 million) were
living in poverty. Using a slightly different methodology, the
Public Policy Institute of California (PPIC) issued a report<2>
that placed the statewide poverty rate at 22 percent. The same
PPIC report indicates that 19 percent of adults over 65 years of
age were living in poverty. According to PPIC, some of the
highest poverty rates were in the San Francisco Bay Area and
coastal communities. At 27 percent, Los Angeles had the highest
poverty rate in the state, followed by Napa at 25.5 percent.
In a March 2015 Joint Hearing of the Assembly Committee on Aging
and Long Term Care and the Assembly Committee on Human Services
titled Who Can Afford to Get Old? Senior Poverty in the Golden
State, numerous aged individuals and individuals with
disabilities provided public comment about the financial
---------------------------
<1>
http://www.census.gov/content/dam/Census/library/publications/201
4/demo/p60-251.pdf?eml=gd&utm_medium=email&utm_source=govdelivery
<2> http://www.ppic.org/content/pubs/report/R_1013SBR.pdf
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hardship they and people they know were facing due, in part, to
the low SSI/SSP grant amount.
The California Elder Economic Security Index (EESI) measures the
minimum income necessary to cover basic expenses for people age
65 years and older in each of California's counties. The EESI
factors in housing, food, health care, and transportation costs.
According to the EESI, a single renter living alone in a
one-bedroom apartment in Kern County needs $1,565 per month to
pay for basic expenses, which increases to $2,193 needed for a
couple renting that same apartment.
SSI/SSP
The SSI/SSP program provides a monthly cash benefit to qualified
individuals and couples in order to help them pay for basic
living expenses, such as food, clothing and shelter. In order
to be eligible for SSI/SSP, a person must be at least 65
years-old, blind or disabled (including disabled children) and
meet certain income and resource requirements. A qualified SSI
recipient is automatically qualified for SSP. SSI is a
federally funded benefit. The SSP benefit is funded with the
state's General Fund and California sets its own SSP rates. The
estimated SSI/SSP caseload for FY 2016-17 is 1.31 million cases.
The current SSI/SSP maximum grant levels are $889.40 per month
for an individual and $1,496 per month for couples, which places
individuals at 90 percent of poverty and couples at 112 percent
of FPL.
Changes in SSI/SSP Benefits
The federal Social Security Administration (SSA) provides an
annual COLA to the SSI which is based on the Consumer Price
Index. While the federal government has regularly increased its
SSI contribution since 2011, the state has frozen or decreased
its SSP contribution in recent years. Specifically, the
state-funded COLAs for SSP was suspended periodically throughout
the 1990s and into the 2000s as a cost-savings strategy during
the Great Recession.
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SSI/SSP maximum payments were as high as $907 in January 2009
(before the recession) and decreased to a low of $830.40 in June
2011. The state's SSP contribution was at its lowest level in
June 2011 at $156.40 and has not increased since then. The SSP
COLA was permanently repealed in 2009 through statute.
AB 1603, which enacts the human services budget for Fiscal Year
2016-17, includes a one-time increase to the SSP (calculated at
2.76% of CNI) beginning January 1, 2017. This will give
individuals an increase of $4.32 and couples an increase of
$10.94 per month. As of January 1, 2017, SSI/SSP for an
individual will be $893.72, couples will receive $1,107.14. With
this increase, SSI/SSP benefit level still falls short of its
highest level of $907 for individuals and $1,579 for couples,
which was in place in January 2009.
Cash-out policy
California's cash-out policy started in 1974 when the federal
government began the combined SSI/SSP program in order to
complement various state programs supporting the blind, elderly,
and disabled populations. At that time, California chose to
provide SSI/SSP recipients with a $10 cash benefit instead of a
$10 food-stamp benefit. California chose the option of cashing
out SNAP benefits, which was approximately $10 per month in
California at the time, for SSI/SSP recipients due to the high
administrative costs of delivering the $10 food-stamp benefit.
Since 1974, the minimum CalFresh benefit has increased from $10
to about $16. Therefore, if the cash-out policy were
terminated, some SSI/SSP recipients would be eligible for a
CalFresh benefit of at least $16.
By combining the SNAP benefits into the SSI/SSP payment, SSI/SSP
recipients were made ineligible for SNAP. However, in a "mixed"
household, in which some members receive SSI benefits and other
members do not, the SSI/SSP income is disregarded when
determining the household's CalFresh eligibility and level of
benefits, making these households potentially eligible for SNAP
benefits. For example, if a disabled child receives SSI/SSP and
his or her household applies for CalFresh, the SSI/SSP income of
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this child doesn't count toward the family's CalFresh benefit
calculation. In this case, the entire household receives higher
overall benefits than it would have otherwise.
This means that ending the cash-out policy could create
"winners" and "losers." SSI/SSP recipients would stand to gain
higher levels of food assistance by becoming eligible for
CalFresh. They would continue to receive SSI/SSP and, if they
apply for CalFresh, they could receive at least $16 increase in
benefits. On the other hand, mixed households could see their
nutrition assistance reduced or eliminated if the SSI/SSP income
is counted for purposes of determining household CalFresh
eligibility and benefit levels.
Past efforts to change cash-out implementation
In 2010, California applied for a federal waiver that would have
allowed California to treat the state's SSI/SSP population
uniformly. The waiver would have permitted California to
maintain the cash-out for mixed SSI/SSP households, while ending
cash-out for SSI/SSP-only households. If the waiver had been
approved, the SSI/SSP income for mixed-SSI/SSP households would
not count when determining the household CalFresh benefit.
Additionally, SSI/SSP-only households would have been eligible
for CalFresh. The waiver was rejected because the U.S.
Department of Agriculture did not believe the agency has the
authority to end cash-out for some, but not all, households.
Related legislation:
AB 1584 (Brown, 2016) reinstates the COLA for SSP for the aged,
blind and disabled and indexes the maximum SSI/SSP benefit to
the FPL.
AB 1603 (Assembly Committee on Budget, 2016) enacts the human
services budget for Fiscal Year 2016-17 and includes a one-time
increase to the SSP (calculated at 2.76% of CNI) beginning
January 1, 2017.
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PRIOR VOTES
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|Assembly Floor: |80 - |
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|Assembly Appropriations Committee: |20 - |
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|Assembly Human Services Committee: |6 - |
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POSITIONS
Support:
Coalition of California Welfare Rights Organizations
(Sponsor)
California Alliance for Retired Americans
California Association of Public Authorities
Mercy Brown Bag Program
Resources for Independent Living
San Francisco Senior and Disability Action
St. Mary's Center
The Personal Assistance Services Council of Los Angeles
County
Oppose:
None.
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