BILL ANALYSIS �
AB 479
Page 1
Date of Hearing: January 10, 2012
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall Jr., Chair
AB 479 (Nestande) - As Amended: January 4, 2012
SUBJECT : CalWORKs: benefits for safety net children
SUMMARY : Eliminates children from receiving California Work
Opportunity and Responsibility to Kids program (CalWORKs)
benefits once a parent reaches the 48-month time limit on aid.
Specifically, this bill :
1)Denies:
a) CalWORKs aid to children whose parents or caretakers
have reached the 48-month time limit on aid, unless the
parents are complying with federal work requirements under
42 USC 607 (c) that generally requires a one-parent family
work a minimum of 30 hours per week and for a two-parent
family a minimum of 35 hours per week.
b) General Assistance (GA) aid to children whose parents or
caretakers have reached the 48-month time limit on aid
until the children reach age 18.
c) Counties the option to provide welfare-to-work services,
such as subsidized employment of community service, to
CalWORKs parents when they have reached the 48-month time
limit on aid and are no longer eligible for the full
breadth of services under this program.
EXISTING LAW :
1)Establishes, under federal law, the Temporary Assistance for
Needy Families (TANF) program to provide cash grants to
eligible persons as part of a welfare-to-work program.
Personal Responsibility and Work Opportunity Reconciliation
Act (PRWORA) (Public Law 104-193).
2)Establishes, under state law, CalWORKs (the state name for
TANF) to provide eligible persons cash assistance and
employment services. AB 1542 (Thompson, Maddy, Ducheny,
Ashburn) Chapter 270, Statutes of 1997.
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3)Requires every county and every city to relieve and support,
via GA, all incompetent, poor, indigent persons, and those
incapacitated by age, disease, or accident, lawfully resident
therein, when such persons are not supported and relieved by
their relatives or friends, by their own means, or by state
hospitals or other state or private institutions.
4)Limits parents and caretakers who receive CalWORKs to
48-months of aid.
5)Provides cash assistance from the county GA program for very
low-income single adults.
FISCAL EFFECT : Unknown
COMMENTS : According to the author,
The Legislature needs to make some very difficult
fiscal decisions to provide an economically stable
future for the next generation. We cannot keep
avoiding our financial problems with temporary
solutions year after year. Reducing General Fund
spending is a critical aspect of that solution and
this measure is one small step towards that goal.
Thus, it appears that the author seeks to balance the state's
ongoing budget deficit, in part, by reducing the CalWORKs
caseload. Based on June 2011 data provided by the Department of
Social Services, approximately 121,000 children are in the
Safety Net program, and their ability to continue to receive aid
would be dependent on their parents or caregivers complying with
work requirements.
Background on TANF and CalWORKs
Welfare was reformed in 1996 at the federal level. Under
PRWORA, the Aid to Families with Dependent Children (AFDC) was
replaced with the TANF program and ended "welfare as we know
it." California calls its program CalWORKs.
This reform meant the program went from an open-ended
entitlement to a block grant that provided states with a fixed
amount of funding and required the state to match the block
grant through a Maintenance of Effort level of funding. In
general, TANF set a maximum of five years that a family could
receive cash assistance and employment services and set a
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minimum number of hours that a family must work in order to
remain eligible in the program.
TANF gave states extensive flexibility over program eligibility
and ongoing requirements. CalWORKs has set eligibility
requirements, cash grant levels, work participation levels and
exemptions, time limits, and sanctions. For example, California
recently reduced the number of months a family can stay on
CalWORKs from 60 to 48 months, limits the value of an applicant
and recipient's vehicle to $4,650, and requires that an
applicant or recipient's cash on hand be no more than $2,000.
The County Welfare Directors' Association (CWDA) indicates that
CalWORKs is a successful model for increasing work and
self-sufficiency, while maintaining a safety-net for low-income
children. More than 400,000 families across the state (almost
half the caseload) have left aid and become self-sufficient
since welfare reform began in 1997. More adults on aid are
working, and they are earning more under CalWORKs, than under
the old AFDC program. Today, due to the prolonged economic
decline and 11.3% unemployment rate in California, the CalWORKs
caseload as of July 2011 is just under 590,000 households, or
almost 1.5 million individuals, of which approximately 1.25
million are children.
Summary of federal and state work rules and sanctions
Under federal law, with few exceptions, recipients must work as
soon as they are job-ready or no later than two years after
coming on assistance in order to count toward the state's Work
Participation Rate (WPR). Federal work requirements call for
single parents to participate in work activities for an average
of 30 hours per week, or an average of 20 hours per week if they
have a child under age six. Two-parent families must
participate in work activities for an average of 35 hours a week
or, if they receive federal child care assistance, 55 hours a
week. California currently requires more hours of participation
from CalWORKs household with one parent (32 hours). Work
activities that count toward a state's participation rates
include:
unsubsidized or subsidized employment;
work experience;
on-the-job training;
job search and job readiness assistance;
community service;
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vocational educational training - not to exceed 12
months;
job skills training related to work;
education directly related to employment;
satisfactory secondary school attendance; and,
providing child care services to community volunteers.
Federal work participation rate
Federal law requires states to annually submit to the federal
government case-level data on participation in TANF work
activities and requires states to meet two separate minimum work
participation requirements-one for All Families and another for
Two-Parent Families receiving TANF. Due to the recent economic
downturn, the reasons stated above, and changes to the WPR
calculation rules, California has failed to meet the All
Families Rate for the past two periods that it was measured,
2007 and 2008.
CWDA points out that the WPR, because it is a point-in-time
measure, does not provide an accurate picture of program
engagement. For example, the WPR is an all-or-nothing measure
that does not give states any credit for part-time employment.
If someone works for just one hour less than the requirement,
the state gets zero credit for them. As well, just because a
client is not participating in a given month does not mean they
are disengaged. For example, they could be between jobs,
employed part time, participating in activities that the federal
government does not recognize, exempt from participation, or
waiting for a training program to begin.
The most recent cuts to CalWORKs
On March 24, 2011, Governor Brown signed SB 72 (Committee on
Budget and Fiscal Review), Chapter 8, Statutes of 2011, the
human services budget trailer bill, enacting several deep cuts
to vital human services programs. These cuts will impact the
ability of low-income families to meet basic needs and result in
long-term detrimental impacts on a million of our state's most
vulnerable children. These included:
1)Reduction in lifetime limit on aid
CalWORKs eligibility for adult household members is reduced from
60 months to 48 months. For a household of three with one
parent, this new limit will result in an additional cut in the
maximum benefit of $122 per month after the 48th month. The
months are counted retroactively, starting with January 1,
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1998.
2)Cut to Maximum Grant
An 8% benefit cut to all CalWORKs households, the largest cut in
at least 25 years. This will reduce the Maximum Grant for a
household of three from $694 to $638. The cut brings the
Maximum Grant to below 1984 levels, and reduces the Average
Grant for the same size family from $509 to $468 a month.
3)Reduction in Earned Income Disregard
Reduces the Earned Income Disregard from $225 to $112, which
studies have shown reduces the incentive to work because the
reduction does not allow families to keep as much of their
earned income.
4)Reduction in county administrative funding
Cuts, again, the County Single Allocation (CSA) by $426 million
for 2011-12. Counties report that, cumulatively, their CSA,
which is used to pay for such things as employment services,
has been reduced by over $1.2 billion since 2001. The effect
is less support to assist families overcome barriers to work
such as employment training, job search, domestic violence
services, psychiatric evaluations, alcohol and drug treatment
services, transportation reimbursement, and case management
from eligibility workers-services that are critical to
removing barriers to employment for CalWORKs parents that face
these challenges.
5)Temporary suspension of CalLearn
Suspends, for one year, case management services otherwise
available under the CalLearn program for pregnant and
parenting teenagers. These teenagers will instead be eligible
for regular welfare-to-work services that are available in
their counties.
Studies
According to the Center on Budget and Policy Priorities
(CBBP), time limits are often determined arbitrarily-some
families simply need more time to make the transition into
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employment. CBBP cites many studies that highlight the
barriers that face these families in obtaining employment.
Barriers such as lack of employment history and persistent
personal and family challenges such as a severe mental
health diagnosis or chemical dependency all present serious
challenges from moving from welfare to work.
The author states that the state cannot afford to spend
money it does not have on benefits for CalWORKs
participants. While it is true that the state is in a
fiscal crisis it is important to weigh the costs and
benefits of the expenditures. Indeed, studies have shown
that expenditures on human services programs, such as
CalWORKs, stimulate the economy and relieve cost pressure
on other state-funded programs such as foster care,
corrections, and homelessness.
In an April 2009 report by the County Welfare Directors'
Association and the California State Association of
Counties, Human Services in a Time of Crisis: An
examination of California's safety-net programs and related
economic benefits for communities , the authors cited a
report from Beacon Economics that found that human services
provide a 32% boost to the economy. This economic
"multiplier" effect is possible because of the activity
generated by every dollar spent by low-income families is
likely to be spent quickly.
The report also highlighted that the long-term effects of
reduced and delayed human services is costly to the state.
These costs are borne through the consequences of poverty,
child maltreatment, homelessness, domestic violence, and
substance abuse. The report notes that "a group of 117
economists that span the ideological spectrum state that
steep budget cuts will? only exacerbate an economic
downturn."
Opposition
The Western Center on Law & Poverty (WCLP) opposes this bill on
the grounds that it ignores the following "blatant realities":
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Difficulty of recipients to obtain a job and meet
requirements : California's unemployment rate is one of the
highest in the country and higher than it has been in many
years. Currently, all but eleven California counties have
unemployment rates that are higher than the national
average and in those counties.
Self-sufficiency out of reach : Research shows that job
training that ends in a certificate or degree is more
likely to increase the earnings potential of welfare
recipients. Cutting families off earlier will not allow
them to achieve academic and or employment goals or
increase their likelihood of achieving economic
self-sufficiency.
Already deep cuts to CalWORKs : In July, the new maximum
monthly grant for a family of three will be $638 (the same
as 1984), pushing families below 40% of the federal poverty
level. To consider further cuts to this program now is
both insensitive and out of touch with the gravity of the
cuts currently being implemented in CalWORKs and across the
spectrum of health and human services.
WCLP concludes that "AB 1140 would place families deeper into
poverty that would assuredly result in serious harm to children,
but it doesn't even begin to tell the real story of the
qualitative hardships that children and their parents will
experience when, in the worst economic recession of our time, we
further cut basic needs grants to our state's poorest children."
CWDA likewise points out that, "such reductions in basic
support would likely lead to a substantial increase in
homelessness among these children and their families" and notes
that studies show "children who grow up in poverty are more
likely to become homeless, struggle in school, battle poor
health and face poor life outcomes into and throughout
adulthood."
Verification of work requirement
Under the provisions of this bill, parents who are no longer
eligible for CalWORKs cash aid or welfare-to-work services must
meet federal requirements or risk losing the cash aid for their
children. Mechanically speaking, it is unclear, how counties
would verify this requirement when the parents are no longer
part of the CalWORKs program. The California State Association
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of Counties notes in opposition, that "�c]ounties have concerns
about the workload associated with documenting and adjusting
grants on a monthly basis for these parents, as it would direct
resources away from administering the program for all
recipients."
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
California State Association of Counties (CSAC);
County Welfare Directors Association (CWDA)
Service Employees International Union (SEIU)
Western Center on Law & Poverty (WCLP)
Analysis Prepared by : Frances Chacon / HUM. S. / (916)
319-2089