BILL ANALYSIS
SENATE HUMAN
SERVICES COMMITTEE
Senator Carol Liu, Chair
BILL NO: AB 1058
A
AUTHOR: Beall
B
VERSION: June 1, 2009
HEARING DATE: June 23, 2009
1
FISCAL: To Appropriations
0
5
CONSULTANT:
8
Lane
SUBJECT
CalWORKs eligibility: asset limits
SUMMARY
Reforms the California Work Opportunity and
Responsibilities to Kids' (CalWORKs) asset tests that
county welfare workers use to determine benefit
eligibility.
ABSTRACT
Current law
1.Establishes the California Work Opportunity and
Responsibility to Kids (CalWORKs) program to provide
welfare-to-work services to qualifying persons.
2.Imposes limits on the amount of income and personal and
real property an individual or family may possess in
order to be eligible for aid under the CalWORKs program,
including that assets shall not exceed the following:
a. $2,000 in savings and $3,000 for a family
Continued---
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with a member age 60 or above,
b. One residence that the family lives in,
and
c. One car with a fair-market value of
$4,650.
3.Savings and interests in restricted federally qualified
accounts for the purpose of saving for college,
retirement, starting a business, purchasing a home, or
overcoming an episode of homelessness.
This bill
1.Makes findings and declarations about the CalWORKs
program, asset limits, and efforts in other states to
stimulate savings in welfare-to-work households.
2.Eliminates, for both applicants and recipients, the
eligibility requirement that each family have a vehicle
worth no more than $4,650.
3.Permits a recipient of CalWORKs benefits to build assets
to limits permitted by federal law.
4.Permits an applicant for CalWORKs benefits to have
savings of $2,000, adjusted annually in accordance with
changes in the California Necessities Index.
FISCAL IMPACT
According to the Assembly Appropriations Committee, the
bill results in net savings of approximately $3 million per
year: The committee reaches this figure after subtracting
savings by no longer requiring county eligibility workers
to determine the worth of an applicant's vehicle and adding
the costs of a slight increase in caseload.
BACKGROUND AND DISCUSSION
Purpose
The author states that the intention of this bill is to
help CalWORKs families build the necessary assets for them
to stabilize their personal financial situation by
maintaining a reliable car and sufficient savings in order
to become self-reliant and end their dependence on
government assistance. A secondary goal is to reduce
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county administrative costs by streamlining the application
process.
TANF background
The Temporary Assistance for Needy Families program
replaced Aid for Families with Dependent Children in 1996.
The TANF program allowed states some flexibility in
establishing eligibility rules for families applying to
TANF for cash assistance and employment services.
Specifically, states can decide the income level and
property or asset levels that an applicant or recipient
must meet in order to be eligible. In California, an
applicant (and recipient) can have a vehicle worth no more
than $4,650 and cash on hand of no more than $2,000.
Asset building for CalWORKs
The sponsor of this bill, the New America Foundation,
encourages low-income families to save. They state, "For
families making the difficult transition from
welfare-to-work, developing assets is critical to achieving
true economic independence. In order to prevent a complete
backslide to public assistance, low income working families
must begin to develop their own safety nets through
personal saving for use in the event of an unexpected
income shock due to illness or temporary employment. As
personal saving is essential to achieving self-sufficiency,
the stated goal of the CalWORKs program, saving should be
encouraged, not penalized, by welfare policy and social
service agencies."
The vehicle test
According to the author, the vehicle test was last
increased thirteen years ago. According to the sponsor,
California is currently tied with Texas and Idaho in having
the most restrictive asset test for vehicles of any state
in the country. Currently, 12 states exclude all vehicles
owned by the household in the eligibility criteria, 15
states exclude at least one vehicle per household, and 20
have increased the value of the vehicle exclusion.
The $2,000 resource test
According to the author, the resource test was last
increased in 1985. The author argues the state's policy
should be to encourage work, encourage use of the federal
earned income tax credit, and encourage savings.
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For applicants, the bill adjusts the resource test annually
as specified by the California Necessities Index.
Related legislation
AB 1078 (Lieber, Chapter 622, Statutes of 2007) excluded
funds in specified retirement and educational accounts
authorized under federal law from being considered as
income or resources for purposes of CalWORKs benefits for
applicants.
AB 2466 (Daucher and Arambula, Chapter 781, Statutes of
2006) excluded funds in specified retirement and
educational accounts authorized under federal law from
being considered as income or resources for purposes of
CalWORKs benefits for current recipients, not for new
applicants. In addition, it added financial management
education as an allowable welfare-to-work activity for
adults receiving CalWORKs benefits.
Previous votes
Assembly Floor 48-30
Assembly Appropriations 12-5
Assembly Human Services 5-2
POSITIONS
Support: Catholic Charities of California (sponsor)
New America Foundation (sponsor)
California Catholic Conference of Bishops
California State Association of Counties
California Welfare Directors' Association
Commission on the Status of Women
Insight Center
Western Center on Law and Poverty
Oppose: None received
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