BILL ANALYSIS Ó AB 371 Page 1 Date of Hearing: April 15, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 371 (Mullin) - As Introduced February 17, 2015 ----------------------------------------------------------------- |Policy |Human Services |Vote:|7 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: Yes SUMMARY: This bill streamlines the California Work Opportunity and Responsibility to Kids (CalWORKs) eligibility standards for two-parent families by requiring that aid be granted to a family AB 371 Page 2 that meets applicable eligibility requirements, without regard to the employment status of the parent. Specifically, this bill: 1)Deletes the eligibility requirement for CalWORKs benefits: a. That either parent be unemployed b. That a child be deprived of parental support due to unemployment c. That a parent work less than 100 hours per month 1)Deletes the eligibility requirement that a child must be deprived of parental support or care due to the death, physical or mental incapacity or incarceration of a parent, the unemployment of one or both parents or the continued absence of a parent from the home due to divorce, separation, desertion, or any other reason. 2)Replaces that language with the requirement that aid, services, or both be granted under this chapter, and subject to the regulations of the department, to families with related children under 18 years of age, with exemptions already stated in statute, if the family meets the eligibility requirements including income and work requirements. 3)Establishes that the absence of a parent is not a condition of eligibility to receive benefits, and defines absence of a parent to mean the continued absence of a parent from the home due to divorce, separation, desertion, or any other reason. FISCAL EFFECT: Ongoing increase in CalWORKs grant, services, and administrative costs in the range of $1million to $2 million (GF) to the extent this bill results in additional eligible cases and fewer cases discontinued from the CalWORKs program. This will be partially AB 371 Page 3 offset to the extent the newly eligible cases will no longer receive a CalFresh stipend available only to non-assistance households. COMMENTS: 1)Purpose. According to the author, "The CalWORKs Family Unity Act of 2015 is a modest effort to strengthen the safety net for low-income working families of California, who today endure the highest poverty rate in the Nation. By improving economic opportunities for low-income two-parent homes, we will also strengthen family unit. " Current state law prevents a poor two-parent family from receiving aid if the primary wage earner has worked more than 100 hours in a month regardless of income. This "deprivation standard" was originally enacted to comply with the now outdated AFDC rules (repealed in 1996) which required that two-parent families take additional steps to prove deprivation in order to receive aid. Now in direct conflict with the TANF goal of two-parent family maintenance, many states began modifying or removing special requirements for two-parent units shortly after the 1996 repeal of AFDC. By 2001, just 14 states still had laws in place with restrictions on two-parent households. As of 2011, California was one of just four states that retained the 100-hour working limit for two-parent families. This bill repeals the 100-hour standard while maintaining all resource and income eligibility requirements. AB 371 Page 4 2)Background. In 1996, federal legislation repealed the Aid to Families with Dependent Children (AFDC) and created the block-granted Temporary Assistance for Needy Families (TANF) program. The new approach emphasized integrating parents into the workforce, and encouraged the formation and maintenance of two-parent families. In California, TANF funds are administered through the CalWORKs program. CalWORKs: The California Work Opportunity and Responsibility to Kids (CalWORKs) program provides monthly income assistance and employment-related services aimed at moving children out of poverty and helping families meet basic needs. Federal funding for CalWORKs comes from the Temporary Assistance for Needy Families (TANF) block grant. The average 2015-16 monthly cash grant for a family of three on CalWORKs (one parent and two children) is $506.55. According to recent data from the California Department of Social Services, over 540,000 families rely on CalWORKs, including over one million children. Nearly 80% of the children are under age twelve and 40% are under age five. Average grant amounts of $506.55 per month for a family of three puts the annual household income at $6,078 per year. The poverty level for a family of three is $20,090 per year according to the 2015 Federal Poverty Guidelines. Two parent families make up about 8.6% of total CalWORKs cases. Two parent families with a wage earner working 100 or more hours per week at minimum wage are unlikely to qualify for a CalWORKs grant (especially if the family size is smaller than four) or will qualify for a reduced amount ($124 - $165/month), even with the $225 income disregard. They are AB 371 Page 5 also unlikely to be using welfare-to-work activities beyond employment and are less likely to use child care services than the average recipient. They may, however, use other CalWORKs supportive services such as transportation. Assuming a monthly average of 320 newly eligible cases and 400 cases no longer discontinued, and based on utilization rates reasonable for two parent households, total annual costs under this bill would be in the range of $1million to $2 million (GF). This cost will be partially offset to the extent the newly eligible cases will no longer receive a CalFresh stipend available only to non-assistance households. 3)Prior Legislation. AB 1502 (Mullin), 2014, was similar to this bill. It included removal of the deprivation standard, but also included changes to work requirements for relative caregivers within the CalWORKS program. The latter changes are not included in this bill. AB 1502 was held on the Senate Appropriations Committee Suspense File. Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081