BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1584


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          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          1584 (Brown)


          As Amended  August 15, 2016


          2/3 vote


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          |ASSEMBLY:  |76-0  |(June 2, 2016) |SENATE: |38-0  |(August 18,      |
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          Original Committee Reference:  HUM. S.




          SUMMARY:  Reinstates, as of January 1, 2018, the cost-of-living  
          adjustment (COLA) for the State Supplementary Program for the  
          Aged, Blind and Disabled (SSP).  


          The Senate amendments:


          1)Delay the reinstatement of the SSP COLA to January 1, 2018.


          2)Reinsert language, found in current law, requiring the  
            pass-along of federal benefits, as specified, to be effective  
            on January 1 of each calendar year.










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          3)Delete provisions indexing, in 2017 and 2018, the maximum  
            Supplemental Security Income (SSI)/SSP aid payments to  
            specified percentages of the federal poverty level.


          4)Make technical amendments.


          EXISTING LAW:


          1)Establishes the State Supplementary Program for Aged, Blind  
            and Disabled, which is intended to supplement SSI and provide  
            persons whose need results from age, blindness or disability  
            with assistance and services that help them meet basic needs  
            and maintain or increase independence.  (Welfare and  
            Institutions Code Section (WIC) 12000 et seq.)


          2)Provides that eligibility requirements for SSP match federal  
            SSI criteria, and requires a minimum level of SSP benefits to  
            be provided in order to maintain federal Medicaid funding, as  
            specified.  (WIC 12000 et seq.)


          3)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 with which the computation of annual  
            adjustments to the CNI shall be made.  (WIC 12201)


          4)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)


          FISCAL EFFECT:  According to the Senate Appropriations Committee  
          on August 11, 2016, this bill could result in estimated costs to  








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          the Department of Social Services (DSS) of $75 million to $100  
          million for fiscal year 2017-18 and ongoing costs of $150-200  
          million per year to apply a COLA to the SSI/SSP grant. These  
          estimates assume the COLA would raise the grant by a CNI of  
          3.62%.


          COMMENTS:  


          SSI/SSP:  The SSI/SSP program provides a monthly cash benefit to  
          needy aged, blind, and disabled individuals and couples to help  
          them pay for basic living expenses, such as food, clothing and  
          shelter.  In order to be eligible for SSI/SSP, an individual  
          must be 65 years of age or older, blind, or have disabilities  
          (children who are blind or have disabilities can qualify), and  
          must meet certain federal income and resource requirements.  The  
          SSI portion of the benefit is federally-funded and only provided  
          through an approved application to the Social Security  
          Administration (SSA), while the SSP portion is paid for with  
          General Fund dollars, and a qualified SSI recipient is  
          automatically qualified for SSP.  The SSI portion of the grant  
          is meant to provide an income floor for qualifying low-income  
          individuals and couples.


          SSI/SSP grants are adjusted based on whether a recipient is  
          aged, blind or disabled, the individual's or couple's living  
          arrangement, a recipient's marital status, and a recipient's  
          status as a minor.  The current SSI/SSP maximum grant levels are  
          $889.40 per month for an individual ($156.40 SSP) and $1,496 per  
          month for couples ($396.20 SSP), which places individuals at 90%  
          of poverty and couples at 112% of poverty based on federal  
          guidelines.  The estimated SSI/SSP caseload for 2016-17 is 1.31  
          million cases (including 1.51 million people), which is  
          comprised of 28% aged persons, 1% blind persons and 71% persons  
          with disabilities.  Over 81% of SSI/SSP cases are individual  
          cases.


          The SSA applies an annual COLA to the SSI portion of the grant  
          pursuant to annual increases in the Consumer Price Index (CPI).   








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          This federal COLA is passed through to SSI/SSP recipients in  
          California, which allows SSI/SSP grants to remain at the minimum  
          level allowed under federal law for individuals and couples,  
          thereby allowing the state to maintain its federal Medicaid  
          funding.  During the state's economic downturn, the SSI/SSP  
          program was one of many safety net programs negatively impacted.  
           The COLA California once applied to the SSP amount was made  
          inoperative as part of the 2009-10 Budget Act.


          The 2016-17 State Budget included a one-time cost-of-living  
          increase to the SSP on January 1, 2017, that is equal to the  
          CNI, estimated to be 2.76%.  


          Need for this bill:  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 hardship they and people they know were facing  
          due, in part, to the low SSI/SSP grant amount, which is the sole  
          source of income for many of them.  In addition to pointing out  
          how the SSI/SSP grant amount has not kept up with inflation,  
          many members of the public spoke about how too many aged  
          individuals and individuals with disabilities had to make tough  
          decisions about which expenses they were going to be able to pay  
          each month, understanding that their SSI/SSP grant amounts  
          weren't high enough to meet even their most basic needs.  More  
          specifically, a presentation prepared for the hearing by the  
          California Budget & Policy Center revealed that the current Fair  
          Market Rent for a studio apartment exceeds the maximum SSI/SSP  
          grant level for an individual in 15 counties, and exceeds 50% of  
          the maximum SSI/SSP grant for an individual in all 58 counties.   



          The California Elder Economic Security Index (EESI) is a  
          county-specific measure of the minimum income necessary to cover  
          basic expenses for people age 65 years and older.  Factoring in  
          housing, food, health care, and transportation costs, the EESI  
          illustrates the shortcomings of the current SSI/SSP grant amount  








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          for seniors.  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.  In San Diego  
          County, the amount needed is $2,031 for a single elderly renter  
          and $2,629 for a couple.  The minimum income is even higher in  
          Alameda County at $2,170 for a single elderly renter and $2,888  
          for a couple.  By reinstating the COLA in order to increase the  
          monthly SSI/SSP grant amount, the author of this bill seeks to  
          eventually better align the income of individuals who are unable  
          to work with the actual costs of their needs.


          According to the author, "Aged, Blind and disabled Californians  
          need our help.  Eye-watering recession-era cuts to the SSI/SSP  
          program plunged over 1 million Californians into poverty, and  
          their only way 'out' is through the actions of the Governor and  
          the Legislature.  There is no 'Do-Over' for SSI/SSP recipients  
          whom due to age, blindness or disability are unable to enter the  
          work-force, or re-train to acquire new skills.  They are at the  
          mercy of state policy.  [This bill] advances a first-step toward  
          total restoration of recession era cuts.  By increasing the  
          state portion of the SSI/SSP grant, California's eligible aged,  
          blind and disabled adults will have financial resources to  
          manage California's unusually high costs of living, while  
          stimulating needed economic activity in communities hit hardest  
          by the recession." 


          PRIOR LEGISLATION:


          AB 474 (Brown) of 2015, would have, beginning with the 2015-16  
          fiscal year, required the state maximum SSP grant to be annually  
          adjusted such that the maximum SSI/SSP combined payment would  
          have equaled 112% of the federal poverty level.  It died in the  
          Assembly Budget Committee pursuant to the Constitution Article  
          IV, Section 10(c).












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          Analysis Prepared by:                                             
                          Daphne Hunt / HUM. S. / (916) 319-2089 FN:   
          0004735