BILL ANALYSIS �
SB 1391
Page 1
Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1391 (Liu) - As Amended: August 6, 2012
Policy Committee: Human
ServicesVote:4 - 2
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill institutes a new process for the collection of
CalFresh over-issuances. Specifically, this bill:
1)Establishes a $125 or greater collection threshold in
accordance with federal law when the over-issuance was caused
by administrative error, and allows DSS to establish a higher
threshold if necessary.
2)Requires CalFresh monthly benefits for active recipients to be
reduced for over-issuances as follows:
a) For over-issuances caused by administrative error,
monthly benefits shall be reduced by no more than 5% or
$10, whichever is greater.
b) For over-issuances caused by household error, monthly
benefits shall be reduced by no more than 10% or $10,
whichever is greater.
c) For over-issuances caused by household error, monthly
benefits shall be reduced by no more than 20% or $20,
whichever is greater.
3)Requires the collection of over-issuances for former CalFresh
benefit recipients as follows:
a) For over-issuances caused by administrative error
totaling $125 or less, collection of the over-issuance
shall not be attempted.
b) For over-issuances caused by household error totaling
$35 or less, collection of the over-issuance shall not be
attempted.
SB 1391
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c) Over-issuances caused by intentional fraud, shall be
collected in accordance with federal law.
4)Restricts the reduction or recovery of over issued CalFresh
benefits, unless the household has been properly notified of
the over-issuance.
FISCAL EFFECT
1)One-time costs of approximately $150,000 if this bill results
in changes to the Statewide Automated Welfare System (SAWS).
Those costs may be absorbable within the existing SAWS
Maintenance and Operations budget.
2)Potential ongoing administrative cost savings due to raising
the over-issuance recovery threshold, however, due to county
budget constraints, administrative savings may be difficult to
realize. Additionally, the conversion to semi-annual reporting
(SAR) may result in minimal administrative impact due to
increasing the over-issuance threshold.
COMMENTS
1)Purpose . According to the author, this measure is needed to
align California with other states in setting the threshold
for collecting administrative errors at $125, as many states
already have done. It would relieve counties of the time and
expense required to pursue collections from clients who have
relatively small amounts of overpayments
According to the Western Center on Law and Poverty, sponsors
of this measure, over-issuances and the collection of
over-issuances can cause hardship and confusion among CalFresh
recipients and families that have recently transitioned off of
the CalFresh program. By preventing confusion among recipients
who receive a request for payment of an over-issuance caused
by administrative error, SB 1391 will improve the perception
of the program.
According to the California State Association of Counties and
the County Welfare Directors Association, raising the
threshold for recovering CalFresh over-issuances to $125 will
allow eligibility workers to focus on more egregious instances
and provide more time for caseload work.
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2)Background . Currently, the structure and processes for
collection of CalFresh over-issuances are delineated in DSS
regulations. Under federal statute, a state agency may opt not
to establish and subsequently collect an overpayment that is
not cost effective. States are eligible to follow the federal
Food and Nutrition Service (FNS) threshold or follow their own
cost effectiveness plan subject to federal approval.
Under federal statute, states may opt not to establish a claim
if the overpayment is $125 or less unless the household is
currently participating in CalFresh or the claim has already
been established or discovered in a quality control review.
Currently, the state's over-issuance recovery threshold for
over-issuances resulting from administrative error is $35.
Federal law requires 100% of recouped benefits due to an
administrative error claim be returned to the federal
government. For inadvertent household error claims, the state
retains 20% (or 35% if reducing unemployment compensation
benefits) of the amount collected and for intentional program
violation claims, the state retains 35%. In California, cash
collections and benefit reductions are retained at the county
level and reconciled quarterly to provide the federal and
state portion of collections.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081