"CalWORKs Fact Sheet: Microenterprises"
August 21, 1997
CalWORKs Fact Sheet: Microenterprises and Self-Employment
Answers to Commonly Asked Questions about California's
New Welfare Reform Program
(As contained in AB 1542, Chapter 270, 8/11/97)
Q: Does CalWORKs allow self-employment to count toward the work
requirement?
A: Yes, self-employment is an allowable welfare-to-work activity under
the new law. (Sec. 11322.6 (i))
Q: How many hours per week must a self-employed person work to meet
the new work requirements?
A: Recipients who are self-employed are required to work the same
number of hours as recipients in other welfare-to-work activities.
Single parent adult recipients must participate in welfare-to-work
activities at least: 20 hours per week beginning January 1, 1998; 26
hours per week beginning July 1, 1998; and 32 hours per week beginning
July 1, 1999. For their entire time on aid, a parent must be
participating for at least the federal minimum hourly requirements. In
addition, a county has the option of requiring a single parent to work
up to 32 hours per week. (Sec. 11322.8 (a)) In a two-parent family,
one parent must participate in welfare-to-work activities at least 35
hours per week. Under certain circumstances, both parents' work hours
can contribute to the 35-hour requirement. (Sec. 11322.8 (b))
Q: Are any microenterprise pilot projects planned?
A: Yes, the new law authorizes the State Department of Social
Services, with the consent of participating counties, to implement up
to 6 pilot projects to test the cost-effectiveness of providing
training to qualified CalWORKs participants in becoming economically
self-sufficient through self-employment. If nonstate funds become
available, 12 pilots can be implemented. (Sec. 18238 & 18239) These
pilots were originally contained in SB 1085 (Watson). Funding for the
pilot projects ($2.5 million) was provided through the 1997 Budget Act
(AB 107, Ch. 282, Statutes of 1997). However, the Governor vetoed the
funds, subject to pending negotiations (on unrelated topics).
Q: How will income from self-employment be calculated?
A: Income earned from self-employment will be calculated by allowing
recipients to choose to "disregard" 40% of their gross earnings (from
self-employment) or their actual verified expenses, to the extent
allowed under existing food stamps rules. (Sec. 11155.3 (c))
*NOTE: All citations refer to the Welfare and Institutions Code
Prepared by: California Senate Health and Human Services Committee
Sara McCarthy, Consultant/Sarah Knofel, Intern