BILL ANALYSIS �
AB 1613
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Date of Hearing: May 21, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1613 (Stone) - As Amended: May 7, 2014
Policy Committee: Human
ServicesVote:5 - 0
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill 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), 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.
FISCAL EFFECT
1)Minor revenue loss (GF) to DSS from the reduced ability to
collect overpayments, likely offset by efficiencies gained
through reduced workload associated with not pursuing all
overpayments.
2)One-time costs for changes to the Statewide Automated Welfare
System (SAWS). These costs should be minor and absorbable
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within the existing SAWS Maintenance and Operations budget.
3)Potential GF savings to the extent there is corresponding
reduction in the requests for state hearings regarding
overpayments.
COMMENTS
1)Purpose . Advocates note that 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 amount of overpayment being sought. 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 improve administrative efficiency
regarding the collection of CalWORKs overpayments due to error
while reducing undue hardship for needy families receiving
aid.
2)Background . Under current law, overpayments of CalWORKs aid
due to administrative errors made by a county agency are
collected through a 5% reduction in maximum aid payment the
family could receive based on family size (not what they
actually receive), for each month until the full amount of the
overpayment is recouped. This approach results in a reduction
amount that often exceeds 5% of what the family receives and
can result in undue hardship for families. If the family
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.
3)Prior Legislation . SB 1391 (Liu), Chapter 491, Statutes of
2012, instituted a similar new process for the collection of
CalFresh over-issuances.
Analysis Prepared by : Jennifer Swenson / APPR. / (916)
319-2081
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