BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 371 (Mullin) - CalWORKs Family Unity Act of 2015
          
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          |Version: June 29, 2015          |Policy Vote: HUMAN S. 5 - 0     |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: July 13, 2015     |Consultant: Jolie Onodera       |
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          This bill meets the criteria for referral to the Suspense File. 

          

          Bill  
          Summary:  AB 371 would revise and expand eligibility for the CalWORKs  
          program, as follows: 
               Deletes the consideration of child deprivation as a factor  
              in determining eligibility, and enables eligibility without  
              regard to the employment status of a parent (current law  
              requires the principal earner to be unemployed or working  
              less than 100 hours per month) if the family meets all other  
              eligibility requirements.
               Provides that the absence of a parent, as defined, is not  
              a condition of eligibility to receive CalWORKs benefits, and  
              expands the definition of "absent parent" to include parents  
              absent solely by reason of the performance of active duty in  
              the armed forces.
               Revises work participation requirements for assistance  
              units (AUs) currently based on the average number of hours  
              worked per week during the month to a specified minimum  
              number of hours required to be worked each week. 
               Reduces work requirements for pregnant women from 30 hours  
              to 20 hours per week during the welfare-to-work 24-month  
              clock, and aligns work requirements for two-parent AUs for  






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              all families including two adults, as specified.


          Fiscal  
          Impact:  
           Ongoing major increase in CalWORKs grant, services, and  
            administrative costs of $15.7 million to $18.5 million  
            (General Fund) per year to the extent removing the child  
            deprivation rule results in additional eligible cases and  
            fewer cases discontinued from the CalWORKs program.
           One-time costs potentially in excess of $150,000 (General  
            Fund) for automation changes required to effectuate the  
            eligibility changes imposed under this measure.
           Potential increase in CalWORKs sanctions and resulting  
            reduction in grant costs to the extent requiring a specific  
            minimum number of work hours per week makes it more difficult  
            for participant compliance in lieu of the existing requirement  
            of an average number of work hours per week per month.
           Unknown net increase/decrease in CalWORKs program costs  
            (General Fund) resulting from the changes to hourly work  
            requirements for AUs with two adults, which could result in  
            increased employment services costs, offset to some degree by  
            grant cost savings resulting from increased earnings or higher  
            rates of sanction.    


          Background:  Existing federal law under the Temporary Assistance for Needy  
          Families (TANF) program provides aid and welfare-to-work  
          services to eligible families, and in California, provides that  
          TANF funds for welfare-to-work services are administered through  
          the California Work Opportunity and Responsibility to Kids  
          (CalWORKs) program.

          Existing state law provides that CalWORKs aid and services be  
          granted to families with related children under the age of 18  
          years, with exceptions, who are considered to be deprived of  
          parental support or care due to the following circumstances:

                 The death, physical or mental incapacity, or  
               incarceration of a parent;
                 The unemployment of a parent or parents;
                 Continued absence of a parent from the home due to  
               divorce, separation, or, desertion, or any other reason,  
               except absence occasioned solely by reason of the  
               performance of active duty in the uniformed services of the  







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               United States.

          Under existing law, "unemployment of a parent" means a natural  
          or adoptive parent with whom the child is living and works less  
          than 100 hours in the preceding four weeks and meets specified  
          federal definitions of an unemployed parent. Existing law  
          provides that a family receiving CalWORKs benefits with a child  
          who is considered to be deprived of parental support due to  
          unemployment may continue to receive assistance regardless of  
          the number of hours his or her parent works provided the family  
          does not exceed the applicable gross or net income limits and is  
          otherwise eligible for assistance.

          Under existing law, CalWORKs recipients are required to  
          participate in welfare-to-work activities for an average of a  
          specified number of hours per week during the month as a  
          condition of eligibility for aid. Existing law provides for an  
          exemption for a person with a disability, as specified, from  
          participation in welfare-to-work activities. 


          Proposed  
          Law:  This bill would enact the CalWORKs Family Unity Act of  
          2015, which would revise and expand eligibility for the CalWORKs  
          program, as follows: 
               Deletes consideration of child deprivation as a factor in  
              determining eligibility by providing that CalWORKs aid be  
              granted to a family with a related child who is under 18  
              years of age if the family meets applicable eligibility  
              requirements, without regard to the employment status of the  
              parent (current law requires the principal earner to be  
              unemployed or working less than 100 hours per month).
               Provides that the absence of a parent, as defined, is not  
              a condition of eligibility to receive CalWORKs benefits.
               Expands the definition of "absent parent" to include  
              parents absent solely by reason of the performance of active  
              duty in the uniformed services of the United States.
               Revises work participation requirements for AUs currently  
              based on the average number of hours worked per week during  
              the month to a straight minimum number of hours required to  
              be worked each week. 
               Reduces work requirements for pregnant women from 30 hours  
              to 20 hours per week during the welfare-to-work 24-month  
              clock.
               Aligns work requirements for two-parent AUs to all  







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              families including two adults (such as stepparents and  
              registered domestic partners).
               Requires the DSS to implement the provisions of the bill  
              through an all-county letter or similar instructions, and  
              shall adopt regulations no later than July 1, 2018.


          Related  
          Legislation:  AB 1502 (Mullin) 2014 was substantially similar to  
          this measure. This bill was held on the Suspense File of this  
          Committee.


          Staff  
          Comments:  By removing the consideration of child deprivation as  
          a factor in determining CalWORKs eligibility, this bill will  
          result in both newly eligible cases as well as cases that will  
          no longer be discontinued from the CalWORKs program. 
          Based on DSS reports (CA 255CW and CA 253CW) indicating the  
          annual number of cases denied eligibility due to not meeting the  
          child deprivation requirement and the number of cases  
          discontinued due to no longer meeting the child deprivation  
          requirement, and discounting for those cases that would have  
          been found ineligible under existing law due to excess  
          income/resources or other reasons, results in a monthly average  
          of about 900 newly eligible cases and about 1,000 cases that  
          would no longer be discontinued. Total annual costs for grants,  
          services, administration, and child care (for newly eligible  
          cases), based on applicable utilization rates would result in  
          costs of about $18.5 million. To the extent 15 percent of cases  
          denied or discontinued due to not meeting the child deprivation  
          requirement would have successfully reapplied at a later date  
          and would otherwise have been found eligible, results in annual  
          costs of $15.7 million. 

          This bill reduces work requirements for pregnant women from 30  
          hours to 20 hours per week during the welfare-to-work 24-month  
          clock. Based on MEDS data, it is estimated approximately 2,000  
          new cases could be impacted under this provision. However, as  
          existing program rules provide for a work exemption for pregnant  
          women, it is estimated that this change in hourly work  
          requirements will have a minimal impact on overall program  
          costs.   

          This bill additionally revises work participation requirements  







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          by aligning the hourly work requirement of an average of at  
          least 35 hours per week for two-parent families to all AUs  
          including two adults, such as step-parents, registered domestic  
          partners, and same-sex spouses. This change may result in an  
          increase in employment services costs to the extent the second  
          adult participates and contributes to the hourly work  
          requirement. Additionally, this change may result in offsetting  
          cost savings in CalWORKs grant costs due to increased earnings,  
          or alternatively, due to a higher rate of sanction to the extent  
          participants are unable to meet the higher work requirement. The  
          net fiscal impact would be dependent on various factors specific  
          to each case and the number of cases impacted each year.

          This bill revises existing work participation requirements for  
          AUs currently based on the  average  number of hours worked per  
          week during the month to a specified minimum number of hours  
          required to be worked each week. To the extent requiring a  
          specific minimum number of work hours per week makes it more  
          difficult for participants to comply with work requirements  
          could result in a higher rate of sanction and a resulting  
          reduction in grant costs. 


          Recommended  
          Amendments:  To retain consistency with existing law, staff  
          recommends an amendment to specify that hourly work requirements  
          can be met through an average of a minimum number of hours per  
          week during the month as a condition of eligibility for aid. 


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