BILL ANALYSIS Ó
AB 1742
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Date of Hearing: April 27, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1742 (Mark Stone) - As Introduced February 1, 2016
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Urgency: No State Mandated Local Program: YesReimbursable:
Yes
SUMMARY: This bill increases the time limit for cash aid to
adults through the California Work Opportunity and
Responsibility to Kids (CalWORKs) program from 48 months to 60
months and increases the CalWORKs earned income disregard (EID).
Specifically, this bill:
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1)Increases the time limit on aid for CalWORKs recipient parents
and caretaker relatives from a cumulative total of 48 months
to 60 months, thereby aligning with federal time limits for
the federal Temporary Assistance for Needy Families (TANF)
program.
2)Increases the amount of income disregarded when calculating
CalWORKs eligibility and aid amounts from $225 plus 50% of the
remaining earned income to $450 and 70% of the remaining
earned income, as specified.
FISCAL EFFECT:
1)Estimated overall total cost of approximately $264.9 million
($13.7 million GF) in FY 2016-17 and approximately $513.9
million ($27.8 million GF) in FY 2017-18 and $504.2 million
($27.6 million GF) on-going, based on an average monthly
CalWORKs caseload of just under 500,000. Increasing the time
limit to 60 months accounts for approximately 43% of the total
cost increase, while increasing the EID limit accounts for
approximately 57%.
2)Automation costs of approximately $1 million to the Department
of Social Services (DSS) resulting from required changes to
the Statewide Automated Welfare System.
COMMENTS:
1)Purpose. The author states: "According to the Federal
Supplemental Poverty Measure, nearly a quarter of Californians
live in poverty. While California as a whole has recovered
from the Great Recession, the recovery has been uneven, and
many impoverished Californians continue to struggle.
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According to the Public Policy Institute of California, the
2014 post-recession poverty rate in the state was 16.4%, a 4%
increase from the prerecession levels of 2007. Poverty,
particularly childhood poverty, results in a variety of
negative short- and long-term outcomes for families. It is in
the state's interest to pursue a multi-pronged approach to
reduce poverty amongst Californians. A restoration of the
CalWORKs lifetime limit to its pre-recession level and an EID
increase are necessary strategies to pursue in the fight
against poverty."
2)Background. The CalWORKs program provides monthly income
assistance and employment-related services for qualified
families. The average 2016-17 monthly cash grant for a family
of three on CalWORKs (one parent and two children) is $497.35,
and the maximum monthly grant amount for a family of three, if
the family has no other income and lives in a high-cost
county, is $704. According to recent data from DSS, around
497,000 families rely on CalWORKs, including over one million
children. Nearly 60% of cases include children under 6 years
old.
Under the federal TANF program, an adult may receive aid for
60 months in a lifetime, but the program provides flexibility
to states in implementing their respective programs, including
the ability to establish more truncated time limits than the
60-month lifetime limit. In 1997, when the federal TANF
program was created, California adopted the 60-month lifetime
limit. As of January 1, 2013, adult CalWORKs recipients are
limited to 48-month lifetime aid.
In 2011, the Legislature enacted a number of cuts to the
state's safety net programs, including CalWORKs grant
reductions and reductions in the EID. The 2011 Human Services
Budget Trailer Bill, SB 72 (Chapter 8, Statutes of 2011),
reduced the EID to $112 plus 50% of the remaining earned
income, causing more of a family's monthly income to count
against the maximum grant amount and thereby reducing a
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family's total monthly income. A year later, SB 1041
(Committee on Budget and Fiscal Review) Chapter 47, Statutes
of 2012, another Budget Act trailer bill, restored the EID to
the first $225 and 50% of remaining countable income.
This bill seeks to restore the 60-month lifetime aid limit and
to further increase the EID in order to facilitate families'
ability to increase earnings and build financial stability.
3)Earned Income Disregard (EID). By allowing a certain amount of
income to be retained and excluded from grant calculations,
the EID is intended to facilitate and encourage paid
employment. The EID facilitates working adults' ability to
work more hours and seek higher wages that don't fully offset
the grant amount they could otherwise receive without any
income. Under current law, the first $225 of an adult
recipient's gross earned income is disregarded from CalWORKs
grant calculations, then 50% of the remaining income is
disregarded, with the other 50% directly reducing the grant
amount the recipient would otherwise receive. For example, a
recipient with a monthly income of $700 will have the first
$225 disregarded, leaving $475 from which another 50% will be
disregarded. This will leave $237.50 in income that will be
counted toward reducing the family's grant amount.
In 2013, approximately 4.7 percent of the CalWORKs caseload
left aid due to exceeding the EID limit and would have
remained eligible due to the increase in the income disregard.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081
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