BILL ANALYSIS Ó AB 1584 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1584 (Brown) As Amended August 15, 2016 2/3 vote -------------------------------------------------------------------- |ASSEMBLY: |76-0 |(June 2, 2016) |SENATE: |38-0 |(August 18, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- 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. AB 1584 Page 2 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 AB 1584 Page 3 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). AB 1584 Page 4 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 AB 1584 Page 5 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). AB 1584 Page 6 Analysis Prepared by: Daphne Hunt / HUM. S. / (916) 319-2089 FN: 0004735