BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1742 (Mark Stone) - CalWORKs: eligibility
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|Version: May 31, 2016 |Policy Vote: HUMAN S. 5 - 0 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: August 1, 2016 |Consultant: Debra Cooper |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1742 would increase the amount of exempted income
when calculating CalWORKS eligibility and benefit amounts, as
specified.
Fiscal
Impact:
Significant costs of $141.6 million in fiscal year 2016-17 and
ongoing costs of $281.6 million per year due to increased
caseload and associated grant and supportive service costs.
(TANF/GF)
An estimated $3.6 million in fiscal year 2016-17 and $12.6
million in fiscal year 2017-18 in additional grant amounts to
accommodate for statutory minimum wage increases. (see Staff
Comments)
AB 1742 (Mark Stone) Page 1 of
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One-time costs of $0.8 million for sending mailers to each
CalWORKs household and eligibility workers contacting safety
net cases informing CalWORKs recipients of changes to
eligibility associated with the bill.
Approximately $1 million in costs to the Department of Social
Services (DSS) for automation changes to the Statewide
Automated Welfare System
Background: According to the national Supplemental Poverty Measure, just
under a quarter of Californians are living at or under the
federal poverty level (FPL). The CalWORKs program, which
implements the federal TANF program, is a welfare program that
gives cash aid and employment-related services to eligible
California families. The average monthly cash grant for a family
of three on CalWORKs (one parent and two children) for 2016-17
is $497.35 and the maximum monthly grant if the family has no
other income and lives in a high-cost county is $704. According
to recent data from DSS, approximately 497,000 families rely on
CalWORKs.
The Earned Income Disregard (EID) is the amount subtracted from
a CalWORKs recipients' income to determine eligibility for
assistance and monthly grant amounts. Assistance grants are
calculated based on household size and income, some of which is
not counted per the EID. In 2011, the Legislature enacted a
number of cuts to the state's safety net programs, including
CalWORKs grant reductions and reductions in EID. SB 72 (Budget
and Fiscal Review Committee, Chapter 8, Statutes of 2011)
reduced the EID from $225 to $112 plus 50% of the remaining
earned income. The following year, SB 1041 (Budget and Fiscal
Review Committee, Chapter 47, Statutes of 2012) restored the EID
to the first $225 plus 50% of remaining countable income.
Under current law, the first $225 of an adult CalWORKs gross
income is disregarded from CalWORKs grant calculations, then 50%
of the remaining income is disregarded. The other 50% directly
reduces the grant amount that the recipient would otherwise
receive. For example, a recipient with a monthly income of $800
will have the first $225 disregarded, leaving $575. Another 50%
AB 1742 (Mark Stone) Page 2 of
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($287.50) will be disregarded from that amount, leaving $287.50
in countable income subtracted from the Maximum Aid Payment.
Based on the FFY 2013 Research and Development Enterprise
Project (RADEP) sample data, approximately 4.7% of the CalWORKs
caseload left aid due to exceeding the CalWORKs
earned/disability-based income limit and would have remained
eligible due to an increase in EID.
Proposed Law:
This bill would increase the income disregarded when
calculating CalWORKs eligibility and aid amounts from $225 plus
50% of the remaining earned income to $450 plus 70% of the
remaining earned income, as specified.
Related
Legislation: SB 3 (Leno, Chapter 4, Statutes of 2016) increases
the state's minimum wage year-over-year reaching $15 per hour in
2023.
Staff
Comments: The new minimum wage has the potential to impact the
amount of aid that families receive from CalWORKs; however
increasing the EID would allow more recipients to remain
eligible and would allow recipients to keep more of their
earnings before the CalWORKs grant is reduced based on the
increased income. According to DSS, the minimum wage increase to
$10.50 per hour on January 1, 2017, would potentially decrease
the number of CalWORKs recipients who are no longer eligible for
CalWORKs benefits from 2,036 to 458. Similarly, the minimum wage
increase to $11 per hour starting January 1, 2018 would result
in a decrease from 2,035 to 259.
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