BILL ANALYSIS Ó AB 2448 Page 1 GOVERNOR'S VETO AB 2448 (Burke) As Enrolled August 26, 2016 2/3 vote -------------------------------------------------------------------- |ASSEMBLY: |76-0 |(April 25, |SENATE: |38-0 |(August 15, | | | |2016) | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- -------------------------------------------------------------------- |ASSEMBLY: |78-0 |(August 22, | | | | | | |2016) | | | | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: HUM. S. SUMMARY: Changes certain California Work Opportunity and Responsibility to Kids (CalWORKs) requirements regarding permissible welfare-to-work activities in order to facilitate a recipient's completion of a high school equivalency program by: AB 2448 Page 2 including participation in a high school equivalency program among the list of permissible welfare-to-work activities a CalWORKs participant is required to engage in after orientation and appraisal, as specified; stipulating that any month in which a CalWORKs recipient participates in a high school equivalency program, as specified, shall be prohibited from counting against that recipient's "24-month clock"; permitting a CalWORKs recipient to participate in a high school equivalency program, as specified, if it is determined during the appraisal that he or she has not yet received his or her high school diploma or its equivalent; and exempting a CalWORKs recipient who is determined to not have yet received his or her high school diploma or its equivalent from having to participate in an assessment prior to, or as a condition of, participation in a high school equivalency program. The Senate amendments: 1) Stipulate that, in order to be exempt from the 24-month clock due to participation in a high school equivalency program, a recipient must have already been participating in a high school equivalency program for at least six months but not yet obtained a certificate of high school equivalency. 2) Limit exemption from the 24-month clock due to participation in a high school equivalency program to no more than six cumulative months which may be extended for up to an additional six cumulative months based on a likelihood that the recipient will obtain his or her certification of high school equivalency during that time period. 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 AB 2448 Page 3 United State Code Section 601 et seq., Welfare and Institutions Code Section (WIC) 11200 et seq.) 2)Establishes income, asset and real property limits used to determine eligibility for the program, 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 11150 to 11160, 11450 et seq.) 3)Establishes a 48-month lifetime limit of CalWORKs benefits for eligible adults, including 24 months during which a recipient must meet federal work requirements in order to retain eligibility. (WIC 11454, 11322.85) 4)Requires all individuals over 16 years of age, unless they are otherwise exempt, to participate in specified welfare-to-work activities as a condition of eligibility for CalWORKs. (WIC 11320.3, 11322.6) 5)Stipulates the sequence of employment-related activities a CalWORKs participant must engage in subsequent to the receipt of aid. (WIC 11320.3) 6)Establishes the number of weekly hours of welfare-to-work participation necessary to remain eligible for aid, including requirements for an unemployed parent in a two-parent assistance unit, as specified. (WIC 11322.8) FISCAL EFFECT: This bill is keyed non-fiscal by the Legislative Counsel. COMMENTS: AB 2448 Page 4 CalWORKs: The 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 TANF block grant. 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 the California Department of Social Services, around 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 100% of poverty for a family of three is $20,160 per year. Welfare-to-Work requirements: Welfare-to-work activities within the CalWORKs program include public or private sector subsidized or unsubsidized employment; on-the-job training; community service; secondary school, adult basic education and vocational education and training when the education is needed for the recipient to become employed; specific mental health, substance abuse, or domestic violence services if they are necessary to obtain or retain employment; and a number of other activities necessary to assist a recipient in obtaining unsubsidized employment. AB 2448 Page 5 Unless they are exempt, single parent adults must participate for at least 30 hours per week in welfare-to-work activities, whereas the minimum participation requirement for two-parent families is 35 hours per week. After receiving aid for up to a maximum of 24 months, adults without an exemption must meet federal work requirements, with more restrictive employment settings and allowable employment activities. If a CalWORKs recipient who is not exempt from participation does not meet his or her welfare-to-work requirements, the 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. CalWORKs time limits: Passage of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), which was the final piece of federal welfare reform legislation, marked the end of the previous Aid to Families with Dependent Children (AFDC) program and the beginning of the block-granted TANF program, under which CalWORKs was established in California state law. Among the numerous programmatic changes included within the TANF program was a requirement that eligible parents work or participate in work training or other activities that lead to employment. The TANF program provides a great deal of flexibility in how states implement their respective programs, including the ability for states to establish more truncated time limits than the 60-month lifetime limit on aid for adult recipients authorized within it. As of 2011, California has limited aid to adult CalWORKs recipients to a lifetime limit of 48 months. Need for this bill: In Federal Fiscal Year 2013, it was reported that only 52.3% of heads-of-household in single-parent CalWORKs families had completed high school or the equivalent, and only 56.1% of heads-of-household in two-parent families had. The impact of having a high school diploma or its equivalent on employment and income is well-documented. For example, the United States Bureau of Labor Statistics reports that, in 2015 AB 2448 Page 6 for adults ages 25 and over, those without a high school diploma or equivalent saw median weekly earnings of $493, compared to their counterparts with a high school diploma whose median weekly earnings were $678. Amongst the same population, the unemployment rate for those without a high school diploma was 8.0%, compared to 5.4% for those with a high school diploma. According to the author, "The ultimate goal of the CalWORKs program is to provide support to recipients who need assistance making the transition to work and this bill makes sure high school equivalency is obtained without the 24-month time limit being reached first. This effectively ensures they have enough time to get the education and training needed before entering the workforce full time, increasing their odds of avoiding chronic unemployment and other obstacles in the way of self-sufficiency." Related Legislation: AB 1994 (Lopez) of 2016, creates the CalED program to provide a one-time $500 supplement to eligible CalWORKs participants upon successful completion of a high school equivalency examination. The bill has been referred to the Assembly Appropriations Committee's suspense file. AB 2058 (Mayes) of 2016, creates the CalWORKs Educational Opportunity and Attainment Program and awards grant increases to CalWORKs recipients upon completion of educational milestones, as specified. The bill has been referred to the Assembly Appropriations Committee's suspense file. GOVERNOR'S VETO MESSAGE: AB 2448 Page 7 I am returning Assembly Bill 2448 without my signature. This bill suspends the CalWORKs 24-month time clock for up to 12 months for recipients actively seeking their high school diploma or equivalent. There is flexibility in this program which allows counties to extend the 24-month clock on a case-by-case basis for recipients making progress toward their high school diploma. I am not convinced that a state level suspension as called for in this bill is necessary. Analysis Prepared by: Daphne Hunt / HUM. S. / (916) 319-2089 FN: 0005144