BILL ANALYSIS Ó
AB 1809
Page 1
ASSEMBLY THIRD READING
AB
1809 (Lopez)
As Amended April 6, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Human Services |5-1 |Bonilla, Calderon, |Maienschein |
| | |Lopez, | |
| | | | |
| | | | |
| | |Mark Stone, Thurmond | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |14-6 |Gonzalez, Bloom, |Bigelow, Chang, |
| | |Bonilla, Bonta, |Gallagher, Jones, |
| | |Calderon, Daly, |Obernolte, Wagner |
| | |Eggman, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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AB 1809
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SUMMARY: Eliminates the asset limit test as a requirement for
California Work Opportunity and Responsibility to Kids
(CalWORKs) program eligibility and participation. Specifically,
this bill:
1)Makes a number of Legislative findings and declarations
relating to the establishment of CalWORKs, the asset test as a
requirement for eligibility, and estimated cost savings to the
State if it were to repeal the CalWORKs asset limit.
2)States Legislative intent to repeal the asset test for the
CalWORKs program, thereby, among other things, improving
program efficiency and increasing the capacity of poor
families to exit poverty.
3)Repeals various sections of the Welfare and Institutions Code
that stipulate the allowable value and nature of personal
property, savings, and motor vehicles for purposes of
determining eligibility for CalWORKs, as specified.
4)Makes technical changes.
EXISTING LAW:
1)Establishes under federal law the Temporary Assistance for
Needy Families (TANF) program to provide aid and
welfare-to-work services to eligible families and, in
California, provides that TANF funds for welfare-to-work
services are administered through the CalWORKs program. (42
United States Code Section (U.S.C.) 601 et seq., Welfare and
Institutions Code Section (WIC) 11200 et seq.)
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2)Establishes income, asset, and real property limits used to
determine eligibility for the CalWORKs, including net income
below the Maximum Aid Payment (MAP), based on family size and
county of residence, which is around 40% of the Federal
Poverty Level. (WIC 11454, 11322.85)
3)Imposes limits on the amount of income and personal and real
property an individual or family may possess in order to be
eligible under aid for the CalWORKs program, as specified.
(WIC 11155 et seq.)
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill may result in the following costs:
1)Increased CalWORKs grants, services, child care, and
administrative costs potentially in the millions of dollars
(TANF/MOE [Maintenance of Effort]) for increased CalWORKs
caseload, both new as well as existing cases that would have
otherwise become ineligible. To the extent the CalWORKs
budget exceeds available TANF/MOE funds, any increased costs
above the base MOE requirement would be funded with General
Fund. For a caseload increase of 520 cases, the estimated
total costs would be $3.1 million ($0.2 million General Fund)
in Fiscal Year 2016-17 and $6.3 million ($0.4 million General
Fund) in Fiscal Year 2017-18 and on-going.
2)Potential savings due to reduced county administrative
workload. It is estimated that a county eligibility worker
spends approximately 30 minutes per case on average
determining the value of a family's assets. The scope of this
task varies by county, but this process takes a substantial
amount of time because it must be completed for every CalWORKs
case. Counties receive a single allocation to administer
their CalWORKs programs. While this bill will save time and
reduce workload for county eligibility workers, the state will
only achieve actual savings if a county's single allocation is
further reduced. This action is unlikely given that this work
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is currently underfunded and county welfare departments have
sustained hundreds of millions of dollars in cuts over the
past several years.
3)Potentially substantial future and indirect savings. The
aggregate amount of time saved by eligibility workers will be
substantial. This bill could sufficiently reduce county
workload to allow these employees to be redirected to
providing employment services, resulting in transitioning
recipients to work more quickly, thereby potentially reducing
grant costs and time on aid, resulting in significant future
CalWORKs cost savings.
COMMENTS:
CalWORKs: The California Work Opportunity and Responsibility to
Kids (CalWORKs) program provides monthly income assistance and
employment-related services aimed at moving children out of
poverty and helping families meet basic needs. Federal funding
for CalWORKs comes from the Temporary Assistance for Needy
Families (TANF) block grant. The average 2015-16 monthly cash
grant for a family of three on CalWORKs (one parent and two
children) is $506.55, 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 the
California Department of Social Services, over 497,000 families
rely on CalWORKs, including over one million children. Nearly
60% of cases include children under 6 years old.
Maximum grant amounts in high-cost counties of $704 per month
for a family of three with no other income means $23.46 per day,
per family, or $7.82 per family member, per day to meet basic
needs, including rent, clothing, utility bills, food, and
anything else a family needs to ensure children can be cared for
at home and safely remain with their families. This grant
amount puts the annual household income at $8,448 per year, or
42% of poverty. Federal Poverty Guidelines for 2016 show that
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100% of poverty for a family of three is $20,160 per year.
Asset tests for CalWORKs: In the early 1980s, social welfare
policy shifted towards the elimination of wealth accumulation
while on public assistance. However, in the last decade, there
has been increased attention given to the role that assets
development plays in facilitating the improved economic security
of low-income individuals and their families. Asset limits in
public assistance have been associated with low savings rates
among low-income families, which may hinder families seeking to
transition off of public assistance.
Currently California's asset test for CalWORKs requires families
to have no more than $2,250 in specified assets ($3,250 if there
is a person over 60 years old in the household), and requires a
family's vehicle, if they have one, to have a value of no more
than $9,500. Eight states, including Ohio, Virginia, Hawaii,
Louisiana, Alabama, Maryland, Illinoi, and Colorado, have
eliminated asset tests for TANF in order to reduce
administrative costs. The elimination of asset tests was
initially met with concerns about increases in caseload to
unmanageable levels. However, according to data presented in a
2015 report prepared by the Howard University Center on Race and
Wealth in collaboration with Californians for Shared Prosperity,
"The Cost of Asset Testing for the CalWORKs Program," states
that eliminated asset tests for TANF did not experience an
increase in caseload, with the exception of Alabama, for which
the study did not have enough data to be conclusive.
Need for this bill: The CalWORKs asset limits currently in
place can cause some families to be dependent on less-reliable
modes of transportation, and prevent them from being able to
save up sufficient funds to cover important and common costs
such as paying the deposit and the first month's rent on an
apartment, making necessary car repairs, or dealing with
unforeseen emergencies. Indeed, the discouragement of asset
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development is arguably counter to core goals of CalWORKs aimed
at offering short-term aid and services to facilitate long-term
self-sufficiency.
According to the author, "[This bill] gives families a
meaningful and more realistic financial foundation needed for
survival within CalWORKs and better ensures economic mobility
after they leave CalWORKs. [This bill] is a cost effective way
to streamline the CalWORKs application process and achieve an
estimated $6.4 million in administrative savings and
subsequently realize a decrease in cases, which would be similar
to other states."
PRIOR LEGISLATION:
AB 197 (Stone), of 2013, would have eliminated the requirement
that county welfare departments assess the value of a vehicle
when determining eligibility for CalWORKs participation. This
bill died in the Assembly Appropriations Committee.
AB 2352 (Hernández), of 2012, would have eliminated the
requirement that county welfare departments assess the value of
a vehicle when determining eligibility for CalWORKs
participation. This bill died in the Assembly Appropriations
Committee.
AB 1182 (Hernández), of 2011, would have eliminated the
requirement that county welfare departments assess the value of
a vehicle when determining eligibility for CalWORKs
participation. This bill was vetoed by the Governor.
AB 1058 (Beall), of 2009, would have eliminated the use of a
motor vehicle valued at more than $4,500 when determining
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eligibility for CalWORKs. This bill died in the Senate
Appropriations Committee.
AB 2368 (Fuentes), of 2008, would have eliminated the vehicle
asset test as a condition of eligibility for CalWORKs benefits.
This bill died in the Assembly Appropriations Committee.
AB 167 (Bass), of 2007, would have repealed the asset test for
CalWORKs eligibility if a household contained a member who is
aged or has a disability. This bill died in the Senate
Appropriations Committee.
Analysis Prepared by:
Kelsy Castillo / HUM. S. / (916) 319-2089 FN: 0003208