BILL ANALYSIS �
AB 1613
Page 1
Date of Hearing: April 29, 2014
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Mark Stone, Chair
AB 1613 (Stone) - As Amended: April 21, 2014
SUBJECT : CalWORKs: benefits overpayment
SUMMARY : Establishes cost-effective thresholds for the
collection of CalWORKs overpayments.
Specifically, this bill :
1)Prohibits a county from establishing an overpayment if the
amount of the overpayment is less than $125 or a higher
threshold established by the Department of Social Services
(DSS), as specified, or if the costs of collecting the
overpayment are expected to exceed the average amounts to be
recovered by the county.
2)Authorizes DSS to establish a minimum cost-effectiveness
threshold for collecting CalWORKs overpayments that is greater
than $125 and requires counties to implement the new threshold
developed by DSS.
3)Clarifies that administrative actions cannot be commenced
against any person based on alleged unlawful or erroneous
application for or receipt of CalWORKs aid once the case
record has been destroyed after the expiration of the
three-year retention period, as specified.
EXISTING LAW
1)Establishes under federal law the Temporary Assistance for
Needy Families (TANF) program to provide aid and
welfare-to-work services to eligible families and, in
California, provides that TANF funds for welfare-to-work
services are administered through the CalWORKs program. (42
U.S.C. 601 et seq., WIC 11200 et seq.)
2)Establishes income, asset and real property limits used to
determine eligibility for the program, including net income
below the Maximum Aid Payment (MAP), based on family size and
county of residence, which is approximately 40% of the Federal
Poverty Level. (WIC 11450, 11150 et seq.)
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3)Establishes a 48-month lifetime limit of CalWORKs benefits for
eligible adults, including 24 months during which a recipient
must meet federal work requirements in order to retain
eligibility. (WIC 11454, 11322.85)
4)Requires all individuals over 16 years of age, unless they are
otherwise exempt, to participate in welfare-to-work activities
as a condition of eligibility for CalWORKs. (WIC 11320.3,
11322.6)
5)Establishes the number of weekly hours of welfare-to-work
participation necessary to remain eligible for aid, as
specified. (WIC 11322.8)
6)Authorizes counties to reduce current and future CalWORKs
grant amounts due to prior overpayments, and requires grant
payments to be reduced by 5% of the maximum aid payment of the
assistance unit if the overpayment is due to county error and
10% for any other reason. (WIC 11004 (c))
7)Requires a county to advise a CalWORKs recipient of the
proposed grant reduction and of his or her entitlement to a
state hearing on the propriety of the reduction prior to
effectuating any grant reduction. (WIC 11004 (e))
8)Prohibits the recovery of overpayments to a former CalWORKs
recipient if the amount of the outstanding overpayment is less
than $35, and requires that reasonable cost-effective efforts
at collection be implemented if the amounts owed are $35 or
more. Requires every effort to be made to collect the
overpayments regardless of the amount in cases involving
fraud. (WIC 11004 (g))
9)Provides that any applicant for or recipient of public social
services can request a state hearing, as specified, if he or
she is dissatisfied with any action of the county relating to
his or her application for or receipt of public social
services. (WIC 10950)
FISCAL EFFECT : Unknown
COMMENTS : This bill seeks to improve administrative efficiency
with respect to the establishment and collection of CalWORKs
overpayments due to error while reducing undue hardship for
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needy families receiving CalWORKs benefits.
CalWORKs : The California Work Opportunity and Responsibility to
Kids (CalWORKs) program provides monthly income assistance and
employment-related services aimed at moving children out of
poverty and helping families meet basic needs. Federal funding
for CalWORKs comes from the Temporary Assistance for Needy
Families (TANF) block grant. CalWORKs cash aid and services are
provided to low-income families with children and needy
caretaker relatives of children in, or at risk of placement in,
the foster care system, with the goal of lifting children out of
deep poverty. According to recent data from the California
Department of Social Services, 554,292 families rely on
CalWORKs, including over one million children. Nearly 80% of
the children are under age twelve and 40% are under age five.
The average monthly cash grant for a family of three on CalWORKs
(one parent and two children) is $463. Average grants of $463
per month for a family of three means $15.43 per day, per
family, or $5.14 per family member, per day to meet basic needs,
including rent, clothing, utility bills, food, and anything else
a family needs to ensure children can be cared for at home and
safely remain with their families. This average grant amount
puts the annual household income at $5,556 per year. The
maximum monthly grant for a family with no other income is $638,
resulting in an annual household income of $7,656. Federal
Poverty Guidelines show that 100% of poverty for a family of
three is much higher at $19,790 per year.
Overpayments : Under current law, overpayments of CalWORKs aid
due to administrative errors made by a county agency are
required to be collected through a 5% reduction in maximum aid
payment (MAP) the family could receive based on family size, for
each month until the full amount of the overpayment is recouped.
However, once the overpayment has been established and the
county begins collection of the overpaid amount, the family's
grant is no longer augmented, and the reduction is based on an
amount that is often far greater than what the family receives.
This means, for example, that a family of three receiving a
grant of $463 per month that experiences an unnoticed
overpayment of $100 over a two-month period will experience a
$33.15 grant reduction each month until the $100 is recouped.
(Because the grant reduction percentage is applied to the MAP,
it is based on a $663 monthly grant rather than the $463 monthly
grant the family of three actually receives.) If the family
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chooses to contest the overpayment through a state hearing, the
county could spend around $1,025 on the hearing, regardless of
whether the administrative law judge rules in favor of the
county or rules in favor of the recipient if, for example,
overpayment recovery would cause the family hardship.
Need for this bill : California continues to experience high
levels of unemployment and corresponding high levels of poverty,
making the minimal benefits received through the CalWORKs
program more essential than ever as parents seek consistent,
gainful employment to avoid homelessness and hunger, and to
ensure stability for their children. For former CalWORKs
recipients, counties only seek to recover overpayments that
exceed $35, but there is no such statutory threshold for
currently-aided cases. Furthermore, county administrative costs
around notifying a family of an overpayment, collecting the
overpayment through reducing future grants, and potentially
going to a state hearing if the overpayment is contested all
likely exceed the low threshold for former CalWORKs cases. By
establishing a statutory threshold for the collection of
overpayments and requiring that counties not spend more to
recover the overpayment than the overpaid amount is actually
worth, this bill seeks to reduce further hardship for families
and ensure counties waste less money on hearings.
In support for the bill, the Western Center on Law and Poverty
writes:
"Forfeiting 5% of monthly income would be disappointing for any
family, but for a family living at 40% of the federal poverty
line, it is downright dangerous. [This bill] recognizes the
significance of this hardship and our responsibility to the
wellbeing of these families and to ensure administrative
efficiencies in our program."
RECOMMENDED AMENDMENT :
The actual cash aid amounts provided to needy families were much
closer to the maximum aid payment (MAP) amount for each family
size when the 5% and 10% MAP reduction policy was put into place
for county collection of overpayments. In line with the spirit
of this bill to reduce unnecessary hardship to needy families
when an error leads to an overpayment, the author should
consider amending the bill to clarify that the monthly reduction
percentage is based on a family's monthly grant amount and not
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on the MAP, which is based on the family's size. This amendment
would reduce hardship and encourage stability for the family,
but would not reduce the overall overpayment amount to be
collected by the county through the grant reduction.
REGISTERED SUPPORT / OPPOSITION :
Support
National Association of Social Workers, CA Chapter (NASW-CA)
Public Interest Law Project (PILP)
Western Center on Law and Poverty
Opposition
None on file.
Analysis Prepared by : Myesha Jackson / HUM. S. / (916)
319-2089