BILL ANALYSIS �
AB 924
Page 1
Date of Hearing: April 26, 2011
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall Jr., Chair
AB 924 (Logue) - As Amended: April 11, 2011
SUBJECT : CalWORKs: eligibility
SUMMARY : Terminates aid, in child-only households, if the
parent or caretaker relative is not meeting the federal work
participation requirements. Specifically, this bill makes the
following provisions operative 90 days from the day the bill is
enacted:
a) Terminates the California Work Opportunity and
Responsibility to Kids (CalWORKs) cash grant assistance
that supports the child in child-only households if the
parent or caretaker relative is not meeting federal works
participation requirements but exempts specified categories
of parents and caretakers such as mothers with very young
children, elderly, and disabled persons; and
b) Deletes a county welfare office option to provide
additional CalWORKs employment services to a former
recipient who has exhausted her 48 months of aid in
California, or 60 months of aid from any state.
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.
(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.
3)Provides, under state law, grants for certain child-only cases
will be reduced by five, 10, and 15% at months 61, 73 and 85,
respectively. The cases subject to Incremental Grant
Reductions (IGRs) are: Safety Net families and families with
a non-needy caretaker relative or a caretaker relative who is
an undocumented non-citizen, drug or fleeing felon, or is in
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sanction status. Child-only cases in which the parent or
caretaker relative is unaided due to their SSI/SSP status are
not subject to these IGRs. (SB 72 (Budget and Fiscal
Committee), Chapter 8, Statutes of 2011)
4)Defines terms, as follows:
a) "Safety Net" is a term that refers to the group of
children whose parents have timed-out of their CalWORKs
lifetime limit on aid but where the children are still
receiving their portion of the cash assistance (does not
include sanctioned cases).
b) "Sanctioned" means that the parent has not satisfied the
state work participation requirements for up to three
months and s/he is no longer receiving the adult portion of
the grant but the children are still receiving their
portion.
c) "Child-only cases" is an umbrella term for all CalWORKS
cases where the adult portion of the grant has been
eliminated due to: 1) timed-out parent; 2) sanctioned
parent for not meeting the work requirements; 3) parent
receiving SSI-SSP; 4) parent is a drug or fleeing felon; 5)
parent is an undocumented non-citizen; or, 6) Non-needy
caretaker relative.
FISCAL EFFECT : Unknown
COMMENTS : The author indicates that he has introduced this
legislation as a means to create a work incentive for parents
who are not working but still receive CalWORKs cash assistance
for their children (i.e., child-only cases). He states:
Current law provides a perverse incentive to
low-income families with children, in that when a
parent's eligibility for CalWORKs aid times out, they
are still eligible to receive aid on behalf of their
children regardless of whether or not they are
satisfying federal work requirements. While this may
be intended to keep children out of poverty, it may
also be perpetuating poverty in families receiving
aid. If a parent who is not meeting federal work
requirements can receive cash benefits on behalf of
their child, there is less incentive for the parent to
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seek full-time employment and better the family's
financial situation.
This bill requires that these parents satisfy the federal
work requirements or the cash assistance to their children
will be terminated. The bill also terminates a county's
option to provide employment and support services for
parents who have exhausted their maximum lifetime on aid if
they participate in community service.
Background on TANF and CalWORKS
Welfare was reformed in 1996 at the federal level. Under the
Personal Responsibility and Work Opportunity Reconciliation Act
the Aid to Families with Dependent Children (AFDC) was replaced
with the Temporary Assistance for Needy Families program (TANF)
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
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 from these requirements, time limits, and sanctions.
For example, California recently chose to reduce 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
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decline and 12% unemployment rate in California, CalWORKs'
caseload as of December 2010 is just over 590,000 households.
This analysis will focus solely on the CalWORKs Child-Only cases
and the WPR as it relates to this program.
Child-only definition
California made a policy decision when it designed its TANF
program in 1997 to maintain cash aid for the child until 18
years of age for child-only households. This determination was
based on the belief that the child should not suffer because the
parent is not meeting work requirements.
Child-only is a category within the CalWORKs caseload that
indicates that the adult who is caring for the child is not
included in the cash grant calculation. The policy rationale
behind this is that the parent or caretaker is ineligible for
aid because she or he: 1) has been sanctioned for lack of
compliance; 2) has exceeded the program life time limits on aid;
3) has a previous drug felony conviction; 4) does not have a
legal immigration status; 5) is receiving SSI-SSP; or 6) no
parent is present and the child is living with a relative or
other legal guardian. In brief, the parent receives the grant
on behalf of and in support of the child. Approximately half of
the CalWORKs 590,000 households consist of child-only cases.
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 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
Each year, states 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.
WPR Penalties
Under the penalty structure, the first year in which a state
fails to meet the All Families WPR can result in the state's
block grant being reduced by up to 5%. This maximum penalty can
be reduced based on the severity of noncompliance. The penalty
can also be waived under "corrective compliance" procedures for
states with approved corrective compliance plans, and the
federal government may also choose to waive penalties upon
determining that a state has "reasonable cause" for failing to
meet the work rates. In subsequent years of noncompliance, the
maximum penalty amount increases. California had its penalty
waived for Fiscal Year 2007.
The most recent cuts to CalWORKs
For the last four budget cycles, CalWORKs time limit proposals
have been part of budget negotiations in search for a means to
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create cost savings for the state and increase work
participation. On March 24, 2011, Governor Jerry Brown signed
Senate Bill 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 negatively 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.
Of important note, graduated sanctions were implemented for the
child-only program. Cuts included the following:
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 retroactive starting with January 1, 1998.
2)Cut to Maximum Grant
An 8% benefit cut to all CalWORKs households, the largest in at
least 25 years. This will reduce the Maximum Grant for a
household of three from $694 to $638. This 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)Additional cuts to Child-Only families
a) 5% when they reach the 61st cumulative month on aid.
b) 10% when they reach the 73rd cumulative month on aid.
c) 15% when they reach the 85th cumulative month on aid.
The months are counted retroactively to January 1, 1998.
Grants for two-children cases will be cut by 8% reducing the
Maximum Grant from $565 a month to $520. The additional grant
cuts outlined above are taken from the lower amount listed.
For example, cases at month 85 will have their grants reduced
to $442.
4)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 as their
earned income.
5)Reduction in county administrative funding
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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
and 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. All services that are
critical to removing barriers to employment for CalWORKs
parents that face these challenges.
6)Temporary suspension of CalLearn
Suspends for one year supportive services for teenage parents
and includes these young mothers in the CalWORKs program.
This change has the effect delaying eligibility until their
third trimester, well beyond the time when critical pre-natal
vitamins and care are needed.
Time-limit and child-only studies
It appears that the author introduced this bill based on the
findings of an April 2009 report by the Public Policy Institute
(PPIC), Sanctions and Time Limits in California's Welfare
Program .
There are numerous studies on CalWORKs sanctions and time limits
but very few on their effects on the child-only program. The
PPIC report examined the likely effects increasing the severity
of sanctions and time limits would have on the welfare caseload,
the state's work participation rate, and the economic
circumstances of vulnerable families. PPIC found that states
with stricter sanction policies have substantially higher work
participation rates and lower caseloads than states with a
California-like sanction and that the states that adopted
grant-elimination time limits did not see increased child
poverty as a result. However, PPIC also did not find that grant
elimination time limits increased single mothers' employment.
Further, PPIC acknowledged that there were limitations to their
findings. The period they studied was one of "major economic
growth followed by a short recession," which may suggest that
the increased work participation may have otherwise been less
and the effect on child poverty may have been negative. As
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well, it should be noted that the period was also during the
first seven of the 13 years that TANF/CalWORKs had been
implemented where the caseload consisted of participants who had
fewer barriers to employment. Indeed, the CalWORKs and TANF
caseloads were almost halved by the end of the period studied.
In a discussion with one of the report's authors, she noted that
the report was a macro-analysis of sanctions and time limit
policies done with averages and not based solely on TANF single
mothers but all single mothers who might be eligible for TANF.
One of two recent studies on child-only cases discuss the
barriers to work for this group that now makes up half of the
CalWORKs caseload. Barriers to Work: CalWORKs Parents Timed-out
or Sanctioned in Five Counties , March 2008, makes disturbing
findings for the 143 single mothers that were interviewed. Some
of the study findings are:
The vast majority of mothers in child-only cases face
multiple barriers to employment;
89% of mothers had more than one barrier. While zero to
one barrier is associated with a 69% chance of current
employment, having two or more is associated with a 24%
chance of current employment; and
Barriers that have the greatest negative association
with past-week employment are, in order of importance: 1)
lack of recent (last three years) full-time experience, 2)
alcohol or other drug problems, 3) mental health problems,
4) partner control, 5) child care problems, and 6) domestic
violence.
The study states that child-only cases mothers' limited
educational background and work experience in the last three
years suggests that substantial investment in human capital will
be required before they successfully enter-and remain in-the
workforce. Interestingly, one study advisor described these
women's lives as a "soup of problems?their will-power will not
resolve most of their problems."
Deletion of county services provision
This bill deletes a county welfare office's option to provide
additional CalWORKs employment services to a former recipient
who has exhausted the 48 months of aid in California, or 60
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months of aid from any state. CWDA states that deletion of this
provision eliminates an important part of their subsidized
employment program because the authority enables them to engage
safety net parents in subsidized employment. In fact, this
committee recently held an oversight hearing on the success of
counties' ability to use federal stimulus dollars and create
subsidized employment positions in a time of high unemployment
and scarce jobs. Deleting this requirement would have the
unintended consequence of eliminating an important tool that may
help a parent comply with the provisions of this bill in
satisfying the federal work requirements and bettering the
family's financial situation.
Opposition
CWDA in its opposition letter states that this bill would
jeopardize counties' successful efforts to provide subsidized
employment programs for unemployed CalWORKs parents. It also
goes beyond the agreement recently enacted as part of the budget
trailer bill, SB 72, which made substantial changes to the
CalWORKs program rules, time limits on aid, and substantially
cut counties' welfare-to-work service allocations. The counties
are currently working with state officials to implement these
changes. This implementation should be allowed to take place,
and the effects observed, before more detrimental changes are
made to the program.
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REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
California Coalition for Women Prisoners (CCWP)
California Immigrant Policy Center (CIPC)
County Welfare Directors Association (CWDA)
Legal Services for Prisoners with Children (LSPC)
Western Center on Law and Poverty (WCLP)
Analysis Prepared by : Frances Chacon / HUM. S. / (916)
319-2089