BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular
SB 23 (Mitchell) - CalWORKs: repeal of the maximum family grant
rule
Version: December 1, 2014 Policy Vote:Human Services 4-0
Urgency: No Mandate: Yes
Hearing Date: April 7, 2015Consultant:Jolie
Onodera
This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 23 would expressly prohibit the denial of aid or the denial
of an increase in the maximum aid payment for a child born into
the family of a CalWORKs recipient, and would not entitle
increased benefit payments for months prior to January 1, 2016.
This bill would prohibit the conditioning of eligibility for
CalWORKs aid based on an applicant's or recipient's disclosure
of information about being a victim of rape, incest, or
contraception failure, as specified.
Fiscal
Impact:
Major increase in CalWORKs grant costs in the range of $188
million to $220 million (General Fund) annually based on
data from county consortia indicating 13.3 percent of all
children in CalWORKs households (134,900 children) are
currently impacted by the MFG rule.
Potential future additional CalWORKs grant costs of $3.5
million to $4.1 million (General Fund) for every 2,500
children born into CalWORKs families each year who otherwise
would have been subject to the MFG rule, with annual costs
cumulatively increasing in subsequent years.
Potential reduction in CalFresh benefits (Federal Fund) for
a percentage of families due to the increase in CalWORKs
grant levels under the repeal of the MFG rule. While many
families may not experience a reduction due to their limited
or lack of income, for every 10 percent of families that are
impacted, CalFresh benefits could decline by up to $5.6
million to $6.6 million annually.
Ongoing potential cost savings in averted administrative
hearings related to challenges to MFG determinations. At an
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estimated cost of $1,025 per hearing, elimination of 250
hearings per year would result in cost savings of over
$250,000 (General Fund) per year.
Potential minor offset to CalWORKs grant cost increases due
to child support payments considered countable income in
lieu of being provided to the CalWORKs family under the MFG
rule.
One-time costs likely significant and in excess of $150,000
(General Fund) for automation changes necessary to implement
eligibility changes.
Background: Existing law establishes guidelines for determining a family's
maximum aid payment under the CalWORKs program, including all
eligible family members, as well as the level of aid to be paid.
Existing law under the maximum family grant (MFG) rule, which
was established in California by AB 473 (Brulte) Chapter
196/1994, prohibits an increase in CalWORKs aid based on an
increase in the number of needy persons in a family due to the
birth of an additional child, if the family has received aid
continuously for the 10 months prior to the birth of the child,
as specified. Existing law exempts the following circumstances
from this prohibition:
Any child who was conceived as a result of an act of
rape if the rape was reported to a law enforcement agency,
medical or mental health professional or social services
agency prior to, or within three months after, the birth of
the child.
Any child who was conceived as a result of an incestuous
relationship if the relationship was reported to a medical
or mental health professional or a law enforcement agency
or social services agency prior to, or within three months
after, the birth of the child, or if paternity has been
established.
Any child who was conceived as a result of contraceptive
failure if the parent was using an intrauterine device, a
Norplant, or the sterilization of either parent.
If the family does not receive aid for two consecutive
months during the 10 months prior to the child's birth.
Children born on or before November 1, 1995.
Any child who would qualify for the MFG cap if the
family did not receive aid for 24 consecutive months while
the child was living with the family.
Any child conceived when either parent was a non-needy
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caretaker relative.
Any child who is no longer living in the same home with
either parent.
According to the U.C. Berkeley Law Center on Reproductive Rights
and Justice article, Bringing Families Out of 'Cap'tivity: The
Need to Repeal the CalWORKs Maximum Family Grant Rule (April
2013), "Since the early 1990's, 24 states have implemented a
child exclusion, or family cap, rule in their welfare programs,
the majority of which exclude all cash benefits for a newborn.
Today, California is one of 16 states where a family cap remains
in place. Maryland and Illinois eliminated their programs in
2002 and 2003, respectively, leading the way for other states."
Subsequent to the article's publication, legislation was enacted
in Minnesota in May 2013, removing its family cap policy,
thereby leaving California as one of 15 states to maintain such
a policy.
Proposed Law:
This bill repeals Welfare and Institutions Code (WIC) §
11450.04, which establishes and defines the MFG rule, including
exclusions for families in which a mother reports she is a
victim of rape, incest, or specified methods of contraception
failure. In addition, this bill:
Prohibits an applicant for, or recipient of, CalWORKs
aid from being required as a condition of eligibility to do
any of the following:
o Divulge any member of the assistance unit's
(AU's) status as a victim of rape or incest.
o Share confidential medical records related to
any member of the AU's rape or incest.
o Use contraception, choose a particular method
of contraception, or divulge the method of
contraception that any member of the assistance unit
uses.
Prohibits an applicant for or recipient of CalWORKs
benefits from being denied aid, or denied an increase in
the maximum aid payment, for a child born into the family
during a period in which the family is receiving CalWORKs
aid.
Specifies that applicants for or recipients of aid are
not entitled to increased benefit payments for any month
prior to January 1, 2016, as a result of the repeal of the
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MFG rule.
Makes uncodified legislative findings and declarations that this
legislation is necessary to protect the reproductive and privacy
rights of all applicants for, and recipients of, aid under
CalWORKs.
Prior
Legislation: SB 899 (Mitchell) 2014 was virtually identical to this
measure. This bill was held on the Suspense File of this
Committee.
AB 271 (Mitchell) 2013 was virtually identical to this measure.
This bill was held on the Suspense File of this Committee.
Elimination of the MFG rule was part of the 2013-14 Budget
Conference Committee package of proposals that was ultimately
rejected by the Legislature.
AB 22 (Lieber) 2007 was substantially similar to this measure.
This bill was held on the Suspense File of the Assembly
Committee on Appropriations.
AB 473 (Brulte) Chapter 196/1994 established California's MFG
rule and required California to obtain a federal waiver to
implement the rule. This bill was enacted prior to the
establishment of the state's CalWORKs program which implemented
the federal Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA).
Staff
Comments: Based on information provided by the Department of Social
Services (DSS) of data collected from the county consortia, 13.3
percent of total children in CalWORKs families are currently
subject to the MFG rule. This equates to 134,900 children.
Assuming a per child CalWORKs grant increase ranging from $116
to $136 per month, annual costs to provide CalWORKs grant
payments to the 134,900 impacted children in existing CalWORKs
families would be in the range of $188 million to $220 million
(General Fund). Future annual costs for existing cases
thereafter could potentially be greater due to increases in
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CalWORKs grant levels to the extent permitted under AB 85
(Committee on Budget) Chapter 24/2013, which specifies
additional annual grant increases subject to projected
expenditure and revenue thresholds.
It is unknown how many additional children would be impacted
prospectively under the provisions of this bill, as
comprehensive statewide data was unavailable at the time of this
analysis on the caseload trend of the number of children
affected by the MFG rule. Based on point-in-time data for Los
Angeles County, although the percentage of cases affected by the
MFG rule has declined since 2006, the overall number of MFG
children has increased and the percentage of MFG children to the
total number of CalWORKs children has remained relatively
stable. For every 2,500 children born into CalWORKs families
each year that otherwise would have been subject to the MFG
rule, additional annual costs in the range of $3.5 million to
$4.1 million would be incurred, with annual costs cumulatively
increasing in subsequent years.
Some CalWORKs families would potentially experience a reduction
in CalFresh benefits (Federal Funds) due to the higher CalWORKs
grant payments received under the repeal of the MFG rule. Under
federal SNAP benefit calculation formulas, for every $100
increase in a CalFresh household's monthly net income (after
various deductions), the amount of the food benefit decreases by
up to $30. While there are many CalWORKs families with little to
no income that would still receive the maximum CalFresh benefit,
there would likely be some percentage of families who would
experience a CalFresh benefit reduction. For every 10 percent of
CalWORKs families impacted, CalFresh benefits could decline by
up to $5.6 million to $6.6 million annually.
To the extent repealing the MFG rule results in the elimination
of administrative hearings related to contested MFG
determinations could result in administrative cost savings of
over $250,000 per year, assuming approximately 250 MFG-related
hearings conducted annually at a cost of $1,025 per hearing
would no longer be required.
Under existing law, child support collected on behalf of an
excluded child is required to be paid entirely to the family,
rather than to the state or county as reimbursement for public
assistance, and is not considered income for purposes of public
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benefit calculations. To the extent the provisions of this bill
decrease the number of child support payments paid directly to
the family could result in a minor offset in CalWORKs program
costs for a number of child support payments that would be
counted as income in the absence of the MFG rule.
According to the Urban Institute study, The Effect of Specific
Welfare Policies on Poverty (McKernan and Ratcliffe, 2006), the
family cap policy increases the deep poverty rate of mothers by
12.5 percent and increases the deep poverty rate of children by
13.1 percent. While the near-term costs of eliminating the MFG
rule are significant, more broadly, the long-term effects of its
repeal are unknown but could significantly reduce the costs of
the projected lifetime physical, mental, and social impacts
related to children raised in poverty and the long-term economic
and societal effects linked to this policy.
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