BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AJR 35|
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CONSENT
Bill No: AJR 35
Author: Brown (D), et al.
Amended: 6/1/16 in Assembly
Vote: 21
SENATE HUMAN SERVICES COMMITTEE: 5-0, 6/28/16
AYES: McGuire, Berryhill, Hancock, Liu, Nguyen
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 80-0, 6/1/16 - See last page for vote
SUBJECT: Supplemental Nutrition Assistance Program: cash-out
policy
SOURCE: Coalition of California Welfare Rights Organizations
DIGEST: This 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.
ANALYSIS:
Existing federal law:
1)Establishes under federal law the SNAP program within the US
Department of Agriculture to promote the general welfare and
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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 (FPL) and is a substantial limiting
factor in permitting a recipient to obtain a more nutritious
diet. (7 CFR 271.1; 7 CFR 273.9)
2)Establishes the national SSI program, which provides
supplemental security income to individuals who have attained
age 65 or are blind or disabled and requires that the income
and resources of certain SSI recipients shall not be
considered in determining eligibility or level of benefits of
the household, as specified. (42 U.S.C. 1381 et. seq.) (7 CFR
§ 273.20 (c))
3)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))
Existing state law:
1)Establishes California's CalFresh program to administer
federal SNAP benefits to families and individuals that meet
specified criteria. (WIC 18900 et seq.)
2)Establishes 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.)
3)Provides that eligibility requirements for state SSP match
federal SSI criteria, and requires a minimum level of SSP
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benefits be provided in order to maintain federal Medicaid
funding, as specified. (WIC 12000 et seq.)
1)Requires annual adjustments, based on the California
Necessities Index (CNI), as defined, to SSI/SSP payment
schedules to reflect increases or decreases in the cost of
living, as specified. Further stipulates that such adjustments
shall not be made, unless otherwise required by statute for
the 2011 calendar year and each year thereafter. (WIC 12201)
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,
including:
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) CalFresh 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 household income, size
and expenses.
d) The federal SSI program provides income support to
elderly, blind, or disabled individuals who meet income,
resource, and other tests, and the SSP program supplements
SSI benefits.
e) The estimated average in supplemental nutrition
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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 to cash 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.
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.
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cc) 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.
dd) 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 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.
Background
California is the only state in which SSI/SSP recipients are
ineligible for CalFresh benefits because of the "cash-out"
policy. AJR 35 urges the federal government to change policy 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.
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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, a person must be at least 65 years-old, blind or
disabled (including disabled children) and meet 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 SSP rates. The SSI/SSP caseload for FY
2016-17 is 1.31 million.
The federal Social Security Administration provides an annual
Cost of Living adjustment (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 were suspended
periodically throughout as a cost-savings strategy during the
Great Recession.
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 the FPL and couples at 112 percent of
the FPL. SSI/SSP maximum payment for individuals was 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.
AB 1603 (Committee on Budget, Chapter 25, Statutes of 2016),
which enacts the human services budget for Fiscal Year 2016-17,
includes a one-time increase to the SSP 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.
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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.
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
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 per month
increased 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.
In 2010, California requested to waive the federal requirement
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. The waiver was rejected because the USDA did not
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believe the agency had authority to end cash-out for some, but
not all, households.
Related legislation
AB 1584 (Brown, 2016) reinstates the COLA for SSP for aged,
blind and disabled individuals and indexes the maximum SSI/SSP
benefit to the FPL.
AB 1603 (Assembly Committee on Budget, Chapter 25, Statutes of
2016) enacted the human services budget for FY 2016-17 and
includes a one-time increase to the SSP (calculated at 2.76% of
CNI) beginning January 1, 2017.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
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, the analysis identified 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.
SUPPORT: (Verified8/2/16)
Coalition of California Welfare Rights Organizations (source)
California Alliance for Retired Americans
California Association of Public Authorities
Mercy Brown Bag Program
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Personal Assistance Services Council of Los Angeles County
Resources for Independent Living
San Francisco Senior and Disability Action
St. Mary's Center
OPPOSITION: (Verified8/2/16)
None received
ARGUMENTS IN SUPPORT: 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 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. Yet, ending the cash-out policy without
changing federal policy would reduce benefits for approximately
58,000 medically dependent children, per the author.
ASSEMBLY FLOOR: 80-0, 6/1/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,
Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,
Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
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Prepared by:Taryn Smith / HUMAN S. / (916) 651-1524
8/3/16 18:36:28
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