BILL ANALYSIS Ó
SENATE COMMITTEE ON HUMAN SERVICES
Senator McGuire, Chair
2015 - 2016 Regular
Bill No: AB 1742
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|Author: |Mark Stone |
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|Version: |May 31, 2016 |Hearing |June 28, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Taryn Smith |
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Subject: CalWORKs: eligibility
SUMMARY
This bill increases the amount of exempted disability-based
unearned income and other earned income in calculating CalWORKs
eligibility and benefit amounts, as specified.
ABSTRACT
Existing law:
1)Establishes the federal Temporary Assistance for Needy
Families (TANF) program, which permits states to implement the
program under a state plan. (42 USC § 601 et seq.)
2)Establishes in state law the CalWORKs program to provide cash
assistance and other social services for low-income families
through the federal TANF program. Under CalWORKs, each county
provides assistance through a combination of state, county and
federal TANF funds. (WIC 10530)
3)Establishes income, asset and real property limits used to
determine eligibility for the program, including net income
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below the Maximum Aid Payment (MAP), based on family size and
county of residence, which is around 40 percent of the Federal
Poverty Level. (WIC 11150 to 11160, 11450 et seq.)
4)Exempts the following when calculating a family's income for
the purpose of determining CalWORKs eligibility. If the
family's disability-based unearned income does not exceed
$225, both of the following amounts are exempt:
a. All disability-based unearned income, plus any
amount of not otherwise exempt earned income equal to the
amount of the difference between the amount of
disability-based unearned income and $225
b. Fifty percent of all not otherwise exempt earned
income in excess of the amount applied to the difference
between the amount of disability-based income and $225.
If the family's disability-based unearned income exceeds
$225, both of the following amounts are exempt:
a. All of the first $225 in disability-based unearned
income.
b. Fifty percent of all earned income. (WIC 11451.5
(a))
5)Defines earned income as gross income received as wages,
salary, employer-provided sick leave benefits, commissions, or
profits from activities such as a business enterprise or
farming in which the recipient is engaged as a self-employed
individual or as an employee. (WIC 11451.5 (b)(1))
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6)Defines disability-based unearned income, within the CalWORKs
program, to include state disability insurance benefits,
private disability insurance benefits, temporary workers'
compensation benefits, social security disability benefits,
and any veteran's disability compensation. (WIC 11451.5
(b)(2))
7)Defines unearned income to mean any income not described in
WIC 11451.5 (b)(1) or (b)(2). (WIC 11451.5 (b) (3))
This bill:
1)Increases the 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 IMPACT
According to the Assembly Appropriations Committee, this bill
may result in an estimated overall cost of approximately $151
million ($7.8 million General Fund) in Fiscal Year (FY) 2016-17
and approximately $292.9 million ($15.8 million General Fund) in
FY 2017-18 and $287.4 million ($15.7 million General Fund)
on-going, based on an average monthly CalWORKs caseload of just
under 500,000.
There also likely will be automation costs in the hundreds of
thousands of dollars to the California Department of Social
Services (CDSS) resulting from required changes to the Statewide
Automated Welfare System.
BACKGROUND AND DISCUSSION
Purpose of the bill:
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According to the author, while California as a whole has
recovered from the Great Recession, the recovery has been
uneven, and many impoverished Californians continue to struggle.
According to the Public Policy Institute of California, the
2014 post-recession poverty rate in the state was 16.4 percent,
a 4 percent increase from the prerecession levels of 2007. The
author states that 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
and an EID increase is a necessary strategy to pursue in the
fight against poverty, per the author.
Poverty
California has the highest poverty rate in the nation - just
under one-quarter of residents are living at or below the
federal poverty level (FPL) according to the national
Supplemental Poverty Measure. According to California Public
Policy Institute,<1> 23.9% of California's children were living
in poverty in 2013. These families earn no more than $20,160 per
year for a family of three. During and after the Great
Recession, California saw growing rates of childhood deep
poverty - those living below 50 percent of the federal poverty
line.
Recovery from the recession has been unequally distributed, with
Black and Latino communities living in poverty at higher rates
than the total state population. In addition, 78 percent of
impoverished families have an adult working full time,
indicating that having a job does not ensure economic security.
CalWORKs
CalWORKs implements the federal TANF program in California.
CDSS is charged with program supervision at the state level.
The counties are responsible for administering the caseloads at
the local level. The CalWORKs program is funded with a mix of
federal, state and county funds. According to data from CDSS,
around 497,000 families rely on CAlWORKs, including more than
one million children. Nearly 60 percent of CalWORKs cases
include children under 6 years of age.
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<1> http://www.ppic.org/main/publication_show.asp?i=261
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CalWORKs seeks to address poverty through an array of services
designed to assist families in various states of need and to
address the facets of need for each family. CalWORKs provides
temporary cash assistance to help qualified low income families
meet their basic needs, such as rent, clothing, utility bills,
food and other items needed to ensure children are cared for at
home and safely remain with their families. In addition to cash
assistance, CalWORKs provides education, employment and training
programs for adult CalWORKs recipients that are designed to help
remove barriers to work.
State law provides for a cumulative 48-month lifetime limit on
CalWORKs cash aid for adults. During those 48 months, adults
may receive a total of 24 months of Welfare-to-Work (WTW)
services, which are provided to help adult CalWORKs recipients
address issues that may prevent or make it difficult to obtain
employment. These WTW activities include subsidized and
unsubsidized employment, community service, adult basic
education, job skills, training, mental health counseling,
substance abuse treatment and other activities necessary to
assist recipients in obtaining employment. Once the 24 months of
WTW activities have been exhausted, adults must meet stricter
federal work participation requirements that may include
increased weekly hours and participation in fewer qualifying
activities. For example, substance abuse treatment is not a
qualifying activity under the federal requirements.
Children of adults who exhaust the 48-month lifetime limit may
continue to receive cash aid, if otherwise eligible, until they
reach 18 years of age. However, if an adult CalWORKs recipient
who is not exempt from participation does not meet his or her
welfare-to-work requirements, the adult recipient is sanctioned
for noncompliance, and that recipient's portion of the family's
grant subtracted from the amount provided to the family to meet
basic needs.
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Earned Income Disregard (EID)
The EID is the amount subtracted from a CalWORKs recipients'
income in order to determine eligibility for assistance and
monthly grant amounts. Assistance grants are calculated based on
household size and income, and, per the EID, some income is not
counted for this purpose. The EID allows working adults' to
work more hours and seek higher wages without offsetting the
grant amount they could otherwise receive without any income.
During the Great Recession, the Legislature enacted a number of
cuts to the state's safety net programs, including CalWORKs
grant reductions and reductions in the EID. SB 72 (Budget and
Fiscal Review Committee, Chapter 8, Statutes of 2011) reduced
the EID from $225 to $112 plus 50 percent of the remaining
earned income, causing more of a family's monthly income to
count against the maximum grant amount and thereby reducing a
family's total monthly income. A year later, when other changes
were enacted within the CalWORKs program, the EID was restored
to the first $225 and 50 percent of remaining countable income.
Under current law, $225 is disregarded (subtracted) from an
adult CalWORKs recipient's gross income. Then, 50 percent of
the remaining income is disregarded (subtracted). The remaining
50 percent is subtracted from the Maximum Aid Payment, which
determines the recipients' actual monthly grant amount.
CalWORKs Family of Three (one adult and two children)
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<2> Region 1 Counties: Alameda, Contra Costa, Los Angeles,
Marin, Monterey, Napa, Orange, San Diego, San Francisco, San
Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz,
Solano, Sonoma and Ventura.
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Region 1<2> Region 2<3>
Gross Earned Income $ 800 $800
EID - 225 - 225
Subtotal 575 575
Less 50% - 287.50 - 287.50
Total Countable Income $ 287.50 $ 287.50
Maximum Aid Payment $ 704 $ 670
Total Countable Income -287.50 - 287.50
Monthly Grant Amount $416.50 $ 382.50
As shown above, the maximum monthly grant for a family of three,
if the family has no other income and resides in a high cost
county, is $704. The maximum grant for the same family living in
Region 2 would receive $670. However, the average monthly cash
grant for a family of three on CalWORKs (one parent and two
children) is $497.35. The difference between the maximum cash
grant and the average cash grant is due to the fact that grant
amounts are reduced per the EID. The EID facilitates and
encourages paid employment by allowing a certain amount of
income to be retained and excluded from grant calculations.
Related legislation:
AB 371 (Mullin, Statutes of 2015) would have streamlined
California Work Opportunity and Responsibility to Kids
(CalWORKs) eligibility standards for two-parent families, as
specified. The bill was vetoed by the Governor.
AB 1094 (Brown, Chapter 554, Statutes of 2013) expanded the
definition of disability-based unearned income to include
veteran's disability compensation for purposes of the income
disregard under CalWORKs.
COMMENTS
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<3> Region 2 Counties: Alpine, Amador, Butte, Calaveras, Colusa,
Del Norte, El Dorado, Fresno, Glenn, Humboldt, Imperial, Inyo,
Kern, Kings, Lake, Lassen, Madera, Mariposa, Mendocino, Merced,
Modoc, Mono, Nevada, Placer, Plumas, Riverside, Sacramento, San
Benito, San Bernardino, San Joaquin, Shasta, Sierra, Siskiyou,
Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Yolo and
Yuba
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Per SB 3 (Leno, Chapter 4, Statutes of 2016), the state's
minimum wage is scheduled to increase year-over-year topping out
at $15 per hour in 2023. The new minimum wage has the potential
to seriously impact the amount of aid that families receive from
CalWORKs, meaning that they would receive less support on their
way to exiting poverty. Increasing the EID would allow
recipients to keep more of their earnings before the CalWORKs
grant is reduced based on the increased income.
PRIOR VOTES
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|Assembly Floor: |71 - |
| |6 |
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|Assembly Appropriations Committee: |15 - |
| |2 |
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|Assembly Human Services Committee: |6 - |
| |0 |
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POSITIONS
Support:
Western Center on Law and Poverty (co-sponsor)
Coalition of California Welfare Rights Organizations
(co-sponsor)
Alameda County Board of Supervisors
American Heart Association/American Stroke Association
California Alternative Payment Program Association
California Association of Food Banks
California Catholic Conference
California Food Policy Advocates
California Immigrant Policy Center
Children's Defense Fund
City and County of San Francisco
County Welfare Directors Association
Courage Campaign
Feeding America San Diego
Hunger Action Los Angeles
iFoster
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National Association of Social Workers
Santa Clara County Board of Supervisors
St Anthony's Foundation
The Ella Baker Center
1 individual
Oppose:
None.
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