BILL ANALYSIS �
AB 1654
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Date of Hearing: April 1, 2014
ASSEMBLY COMMITTEE ON JUDICIARY
Bob Wieckowski, Chair
AB 1654 (Bonilla) - As Introduced: February 11, 2014
PROPOSED CONSENT
SUBJECT : CHILD SUPPORT: CALWORKS PASS-THROUGH AND DISREGARD
KEY ISSUE : IN ORDER TO HELP LOW-INCOME CHILDREN AND ENCOURAGE
NONCUSTODIAL PARENTS TO SUPPORT THEIR CHILDREN, SHOULD THE
AMOUNT OF CHILD SUPPORT COLLECTED AND PASSED THROUGH TO FAMILIES
RECEIVING CALWORKS BE INCREASED FROM $50 PER MONTH TO $100 PER
MONTH FOR FAMILIES WITH ONE CHILD AND $200 PER MONTH FOR
FAMILIES WITH TWO OR MORE CHILDREN?
SYNOPSIS
When families apply for CalWORKs they are required to assign to
the state their rights to any child support owed during the
assistance period and to cooperate with the child support
program in enforcement efforts. Under federal and state law,
states withhold the child support payments for these families to
reimburse the state and federal governments for the assistance
costs. The child support program was originally designed as a
cost-recovery program to reimburse state and federal governments
for public assistance paid to children. However, since the
implementation of welfare reform in 1996, the program has
focused on family self-sufficiency and getting more child
support dollars directly to families. To encourage states to
pass more child support through to families, the federal
government has agreed to share the cost of passing through that
child support to families on assistance, up to $100 for families
with one child, and $200 for families with two or more children.
California currently only passes through the first $50
collected per month. In an effort to increase financial
stability and improve the general well-being of children and
families on CalWORKs, this bill increases the amount of child
support passed through to families on CalWORKs, up to $100 for
families with one child, and $200 for families with two or more
children. The bill is sponsored by the Western Center for Law
and Poverty, and is supported by, among others, California
Catholic Conference of Bishops, California State Association of
Counties, Children's Defense Fund- California, Coalition of
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California Welfare Rights Organizations, Inc., and County
Welfare Directors Association of California. It has no
opposition. It passed out of the Human Services Committee last
week on a unanimous vote of 7-0.
SUMMARY : Increases the amount of child support passed through
to families on CalWORKs and disregards that amount when
calculating their CalWORKs grants. Specifically, this bill :
1)States the intent of the Legislature to increase payments of
child support obligations, improve the health and well-being
of low-income children in single-parent homes, and strengthen
family unity by authorizing the maximum amount of child
support permitted under federal law to be passed through to
children who receive CalWORKs basic needs assistance.
2)Requires that CalWORKs recipients receive the first $100 of
child support collected each month for one child and $200 for
two or more children, unless federal law specifies a greater
amount, in which case the amount specified in federal law
shall be paid to the recipient. Provides that the child
support passed through to families be disregarded as income
and resources in determining eligibility for aid and the
amount of aid paid.
EXISTING LAW :
1)Establishes the federal 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 California Work Opportunity and Responsibility to
Kids (CalWORKs) program. (42 U.S.C. 601 et seq.; Welfare &
Institutions Code Section 11200 et seq.)
2)Establishes income, asset and real property limits used to
determine eligibility for the CalWORKs program. (Welfare &
Institutions Code Section 11250 et seq.)
3)Provides that, as a condition of eligibility for cash
assistance, an applicant or recipient must assign to the state
his or her rights to any child support owed during the receipt
of benefits, as provided, in an amount not to exceed the total
cash assistance provided to the family. (Welfare &
Institutions Code Section 11477.)
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4)Requires each county to maintain a local child support agency,
which is responsible for promptly and effectively
establishing, modifying and enforcing child support
obligations. (Family Code Section 17400.)
5)Requires local child support agencies to pay families
receiving cash assistance the first $50 of any child support
collected in a month in which the child support is due, and
that payment cannot be deducted from the amount of assistance
to which the family would otherwise be eligible. (Family Code
Section 17504; Welfare & Institutions Code Section 11475.3.)
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
COMMENTS : In 1975 Congress established the national child
support program to provide funds to states to establish
paternity and child support orders, and to collect and
distribute child support. Under the 1996 Personal
Responsibility and Work Opportunity Reconciliation Act (PRWORA),
a state's TANF plan must contain an assurance that the state
will operate a child support enforcement program pursuant to an
approved plan. Basic responsibility for administering the child
support program is left to the states but the federal government
plays a significant role in dictating the major design features,
funding and evaluating state programs. The federal government
provides a 66 percent match for any funds a state expends for
reimbursable child support enforcement activities. Collections
made on behalf of families receiving TANF assistance are shared
equally with the federal government.
The child support program was originally designed by Congress in
1975 as a cost-recovery program to reimburse state and federal
governments for public assistance paid to children. However,
since 1996 welfare reform, the program has focused on family
self-sufficiency and getting more child support dollars directly
to families. As stated in federal policy established by The
Office of Child Support Enforcement: "Child support is no
longer primarily a welfare reimbursement, revenue-producing
device for the Federal and State governments; it is a
family-first program, intended to ensure families'
self-sufficiency by making child support a more reliable source
of income." (Office of Child Support Enforcement, U.S.
Department of Health and Human Services, National Child Support
Enforcement Strategic Plan FY 2005-2009, 1.)
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Treatment of Child Support Collected on Behalf of CalWORKs
Recipients : When families apply for CalWORKs - California's
TANF program - they are required to assign to the state their
rights to any child support owed during the assistance period
and to cooperate with the child support program in enforcement
efforts. There are complex federal distribution rules for
determining how child support collections are allocated between
families and the government. As a general rule, child support
paid while a family receives assistance is retained by the state
and shared with the federal government.
Under federal law, states have the option to "retain, or
distribute to the family, the State share" of the amount
collected for current recipients. Prior to PRWORA states were
required to pass through and disregard as countable income for
grant calculations the first $50 of current child support
payments to the family. This provision was repealed as a
requirement of PRWORA but California retained in the CalWORKs
program, under state authority, a pass-through and disregard of
the first $50 of any current child support paid on behalf of the
family. However, the state still had to pay to the federal
government its 50 percent share of all collections, including
the $50 pass-through.
The federal Deficit Reduction Act of 2005 (DRA), among other
things, provided states with increased flexibility to pass
through more child support dollars to children who currently
receive TANF-funded assistance. In particular, the DRA provides
that the federal government will share in the cost of the
disregard, up to the first $100 a month paid to TANF families
with one child and $200 for families with two or more children.
This Bill Increases Child Support Passed Through to Needy
Families : This bill increases the pass-through and disregard
for families receiving CalWORKs to the maximum amount in which
the federal government will share, up to $100 a month for
families with one child and $200 for families with two or more
children. This bill also provides that if federal law is
changed to increase the amount of the disregard in which the
federal government is willing to share, that increased amount
will be paid to the family.
The provisions of this bill were included in the introduced
version of AB 176 (Jones), Chap. 488, Stats. 2007, but were
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amended out of that bill in the Senate. At that time, the
economy was suffering, and California was paying the federal
government fines for not yet having a single statewide child
support enforcement automation system. In addition to the
fines, another component of being in penalty status was a capped
federal match for automation costs. With the threat of further
federal penalty assessments prior to full development of the
automation system, the state did not take advantage of the
federal option to pass a higher amount of child support dollars
through to CalWORKs families, and instead kept the additional
money that was part of the state's share. California fully
implemented and received federal certification for its statewide
child support automation system in November 2008, which
eliminated the looming threat of federal penalties and lifted
the cap on the federal match for automation costs. As the state
continues to improve its child support performance measures, the
state appears to be in a significantly better position to pass
through additional child support dollars to families receiving
CalWORKs assistance.
According to the author, this bill "takes advantage of a federal
option to redirect more child support funds towards children on
CalWORKs. Increasing the amount of child support passed through
to CalWORKs families provides more money for needy children and
increases their financial security. Modest increases in child
support can be very beneficial and be the difference in a
parent's ability to provide for their child's basic needs." The
author notes that single mothers have faced extreme challenges
in recovering from the economic downturn, and this bill will
help them provide for their children as they get back on their
feet.
Benefits of Increasing the Pass-Through and Disregard : The
Center for Law and Social Policy (CLASP) and Policy Studies Inc.
suggest several advantages for implementing the pass-through and
disregard options in the DRA. They assert that the changes
improve child support compliance by encouraging noncustodial
parents to work and pay child support. They cite studies from
Wisconsin that suggests that when child support is passed
through and disregarded to families receiving TANF cash
assistance, more noncustodial parents pay support and they pay
more support. Additionally, they cite the same research for
demonstrating that an enhanced pass-through reduces noncustodial
parents' participation in the underground economy and provides
an incentive for them to pay through the formal child support
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system. (CLASP and Policy Studies, Inc., More Child Support
Dollars to Kids: Using New State Flexibility in Child Support
Pass-Through and Distribution Rules to Benefit Government and
Families (July 2006).)
CLASP also states that an increased pass-through and disregard
compliments broader work and poverty reduction strategies by
assisting families in making the transition from welfare to work
and increasing the financial security for families while they
receive TANF benefits. Finally, they state that the
pass-through and disregard changes will improve child support
program performance and increase federal incentive payments for
states while simplifying the program. Additionally, a study by
the Urban Institute found that expanded pass-through and
distribution policies reduce costs in other programs. (Urban
Institute, Benefits and Costs of Increased Child Support
Distribution to Current and Former Welfare Recipients (2005).)
REGISTERED SUPPORT / OPPOSITION :
Support
Western Center on Law and Poverty (sponsor)
American Federation of State, County and Municipal Employees
(AFSCME)
California Association of Food Banks
California Catholic Conference of Bishops
California Coalition for Women Prisoners
California Partnership
California State Association of Counties
Children's Defense Fund- California
Coalition of California Welfare Rights Organizations, Inc.
County Welfare Directors Association of California
National Association of Social Workers, CA Chapter
San Diego Hunger Coalition
San Francisco Living Wage Coalition
Urban Counties Caucus
1 Individual
Opposition
None on file
Analysis Prepared by : Leora Gershenzon / JUD. / (916) 319-2334
AB 1654
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