BILL ANALYSIS �
AB 1613
Page 1
ASSEMBLY THIRD READING
AB 1613 (Stone)
As Amended May 7, 2014
Majority vote
HUMAN SERVICES 5-0 APPROPRIATIONS 12-5
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|Ayes:|Stone, Ammiano, Ian |Ayes:|Gatto, Bocanegra, |
| |Calderon, Garcia, Hall | |Bradford, |
| | | |Ian Calderon, Campos, |
| | | |Eggman, Gomez, Holden, |
| | | |Pan, Quirk, |
| | | |Ridley-Thomas, Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Bigelow, Donnelly, Jones, |
| | | |Linder, Wagner |
| | | | |
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SUMMARY : Establishes cost-effective thresholds for the
collection of the California Work Opportunity and Responsibility
to Kids (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)Requires counties to collect overpayments for current CalWORKs
cases through a reduction in the assistance unit's future
grants based on the actual monthly aid payment and not the
maximum aid payment based on family size.
4)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
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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
United States Code Section 601 et seq., Welfare and
Institutions Code (WIC) Section 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 Sections 11450 and 11150 et seq.)
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 Sections 11454 and 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 Sections
11320.3 and 11322.6)
5)Establishes the number of weekly hours of welfare-to-work
participation necessary to remain eligible for aid, as
specified. (WIC Section 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 MAP of the assistance unit
if the overpayment is due to county error and 10% for any
other reason. (WIC Section 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 Section 11004 (e))
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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 Section 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 Section 10950)
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Minor General Fund (GF) revenue loss 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
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 : 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
needy families receiving CalWORKs benefits.
CalWORKs: The 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 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 DSS, 554,292 families rely on CalWORKs,
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including over one million children. Nearly 80% of the children
are under age 12 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 $663,
resulting in an annual household income of $7,956. 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 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 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
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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."
There is no opposition on file.
Analysis Prepared by : Myesha Jackson / HUM. S. / (916)
319-2089
FN: 0003530