BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 899 (Mitchell) - CalWORKs eligibility: maximum family grant.
Amended: As Introduced Policy Vote: Human Services 3-2
Urgency: No Mandate: Yes
Hearing Date: April 28, 2014
Consultant: Jolie Onodera
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 899 would expressly prohibit the denial of aid
or an increase in the maximum aid payment for a child born into
the family of a CalWORKs recipient, and would not entitle
increased benefit payments for months prior to January 1, 2015.
This bill would prohibit the conditioning of eligibility for
CalWORKs aid based on an applicant's or recipient's disclosure
of information about being a victim of rape, incest, or
contraception failure, as specified.
Fiscal Impact:
Major first year increase in CalWORKs grant costs of about
$205 million (General Fund) based on data from county
consortia indicating 13.33 percent of all children in
CalWORKs households (131,400 children) are currently
impacted by the MFG rule. Future annual costs for existing
cases could potentially increase by five percent per year
($10 million increase after the first year) to the extent
permitted under AB 85, Chapter 24/2013, the Human Services
budget trailer bill.
Potential future costs of $3.9 million to $7.8 million
(General Fund) for every 2,500 to 5,000 children born into
CalWORKs families each year who otherwise would have been
subject to the MFG rule, with annual costs cumulatively
increasing in subsequent years (after five years, annual
costs would grow to $19 million to $39 million).
Potential minor offset to CalWORKs grant cost increases due
to child support payments considered countable income in
lieu of being provided to the CalWORKs family under the MFG
rule.
Ongoing potential cost savings in averted administrative
hearings related to challenges to MFG determinations. At an
estimated cost of $1,025 per hearing, elimination of 290
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hearings per year would result in cost savings of nearly
$300,000 (General Fund) per year.
Potential reduction in CalFresh benefits (Federal) to
families whose CalWORKs grant levels will increase under the
repeal of the MFG rule.
One-time costs likely significant and in excess of $150,000
(General Fund) for automation changes necessary to implement
the eligibility changes.
Background: Existing law establishes guidelines for determining
a family's maximum aid payment under the CalWORKs program,
including all eligible family members, as well as the level of
aid to be paid. Existing law under the maximum family grant
(MFG) rule, which was established in California by AB 473
(Brulte) Chapter 196/1994, prohibits an increase in CalWORKs aid
based on an increase in the number of needy persons in a family
due to the birth of an additional child, if the family has
received aid continuously for the 10 months prior to the birth
of the child, as specified. Existing law exempts the following
circumstances from this prohibition:
Any child who was conceived as a result of an act of
rape if the rape was reported to a law enforcement agency,
medical or mental health professional or social services
agency prior to, or within three months after, the birth of
the child.
Any child who was conceived as a result of an incestuous
relationship if the relationship was reported to a medical
or mental health professional or a law enforcement agency
or social services agency prior to, or within three months
after, the birth of the child, or if paternity has been
established.
Any child who was conceived as a result of contraceptive
failure if the parent was using an intrauterine device, a
Norplant, or the sterilization of either parent.
If the family does not receive aid for two consecutive
months during the 10 months prior to the child's birth.
Children born on or before November 1, 1995.
Any child who would qualify for the MFG cap if the
family did not receive aid for 24 consecutive months while
the child was living with the family.
Any child conceived when either parent was a non-needy
caretaker relative.
Any child who is no longer living in the same home with
either parent.
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According to the U.C Berkeley Law Center on Reproductive Rights
and Justice article, Bringing Families Out of 'Cap'tivity: The
Need to Repeal the CalWORKs Maximum Family Grant Rule (April
2013), "Since the early 1990's, 24 states have implemented a
child exclusion, or family cap, rule in their welfare programs,
the majority of which exclude all cash benefits for a newborn.
Today, California is one of 16 states where a family cap remains
in place. Maryland and Illinois eliminated their programs in
2002 and 2003, respectively, leading the way for other states."
Proposed Law: This bill repeals Welfare and Institutions Code
(WIC) � 11450.04, which establishes and defines the MFG rule,
including exclusions for families in which a mother reports she
is a victim of rape, incest or specified methods of
contraception failure. In addition, this bill:
Prohibits an applicant for, or recipient of, CalWORKs
aid from being required as a condition of eligibility to do
any of the following:
o Divulge any member of the assistance unit's
(AU's) status as a victim of rape or incest.
o Share confidential medical records related to
any member of the AU's rape or incest.
o Use contraception, choose a particular method
of contraception, or divulge the method of
contraception that any member of the assistance unit
uses.
Prohibits an applicant for or recipient of CalWORKs
benefits from being denied aid, or denied an increase in
the maximum aid payment, for a child born into the family
during a period in which the family is receiving CalWORKs
aid.
Specifies that applicants for or recipients of aid are
not entitled to increased benefit payments for any month
prior to January 1, 2015, as a result of the repeal of the
MFG rule.
Makes uncodified legislative findings and declarations
that this legislation is necessary to protect the
reproductive and privacy rights of all applicants for, and
recipients of, aid under CalWORKs.
Related Legislation: AB 271 (Mitchell) 2013 is virtually
identical to this measure. This bill was held on the Suspense
File of this Committee.
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Prior Legislation: Elimination of the MFG rule was part of the
2013-14 Budget Conference Committee package of proposals that
was ultimately rejected by the Legislature.
AB 22 (Lieber) 2007 was substantially similar to this measure.
This bill was held on the Suspense File of the Assembly
Committee on Appropriations.
AB 473 (Brulte) Chapter 196/1994 established California's MFG
rule and required California to obtain a federal waiver to
implement the rule. This bill was enacted prior to the
establishment of the state's CalWORKs program which implemented
the federal Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA). The passage of PRWORA eliminated
the need for the state to obtain a waiver to implement the MFG
rule.
Staff Comments: Based on information provided by the Department
of Social Services (DSS) of data collected from the county
consortia, 13.3 percent of total children in CalWORKs families
are currently subject to the MFG rule. This equates to
approximately 131,400 children. Based on the CalWORKs grant
difference between an AU of 3 and 4 of $130 (reflecting the five
percent increase in CalWORKs grant payments effective March 1,
2014, pursuant to AB 85 Chapter 24/2013), first-year costs (12
months) to provide CalWORKs grant payments to these children in
existing CalWORKs families would be about $205 million (General
Fund). Future annual costs for existing cases thereafter could
potentially increase by five percent per year for higher
CalWORKs grant payments to the extent permitted under AB 85
noted above, subject to projected expenditure and revenue
thresholds. The estimated cost increase due to a five percent
grant increase after the first year would be $10 million.
It is unknown how many additional children would be impacted
prospectively under the provisions of this bill, as
comprehensive statewide data was unavailable at the time of this
analysis on the caseload trend of the number of children
affected by the MFG rule. Based on point-in-time data for Los
Angeles County, although the percentage of cases affected by the
MFG rule has declined since 2006, the overall number of MFG
children has increased and the percentage of MFG children to the
total number of CalWORKs children has remained relatively
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stable. For every 2,500 to 5,000 children born into CalWORKs
families each year who otherwise would have been subject to the
MFG rule, additional annual costs in the range of $4 million to
$8 million would be incurred, with annual costs cumulatively
increasing in subsequent years.
Under existing law, child support collected on behalf of an
excluded child is required to be paid entirely to the family,
rather than to the state or county as reimbursement for public
assistance, and is not considered income for purposes of public
benefit calculations. To the extent the provisions of this bill
decrease the number of child support payments paid directly to
the family could result in a minor offset in CalWORKs program
costs for a number of child support payments that would be
counted as income in the absence of the MFG rule.
To the extent repealing the MFG rule results in the elimination
of administrative hearings related to contested MFG
determinations could result in administrative cost savings of
nearly $300,000 per year, assuming approximately 290 MFG-related
hearings conducted annually at a cost of $1,025 per hearing
would no longer be required.
According to the Urban Institute study, The Effect of Specific
Welfare Policies on Poverty (McKernan and Ratcliffe, 2006), the
family cap policy increases the deep poverty rate of mothers by
12.5 percent and increases the deep poverty rate of children by
13.1 percent. While the near-term costs of eliminating the MFG
rule are significant, more broadly, the long-term effects of its
repeal are unknown but could significantly reduce the costs of
the projected lifetime physical, mental, and social impacts
related to children raised in poverty and the long-term economic
and societal effects linked to this policy.