"Welfare bills: Floor Analysis of AB 1006"
Note: The welfare conference committee reported four bills out to the floors of
the Legislature. These posts contain the Senate Floor Analysis of each of the
four bills.
CONFERENCE REPORT COMMITTEE ANALYSIS
Bill No: AB 1006
Author: Ducheny
RN: 9717183
Report date: July 2, 1997
SUBJECT: Welfare Reform
Were the Conference amendments heard in committee? Yes.
If yes, were they defeated? No.
SUMMARY:
Federal Law Implementation
Under current law, the Aid to Families with Dependent
Children (AFDC) program provides public assistance to
indigent families. Able-bodied adult recipients who do not
have a child under age 3 must participate in the GAIN
employment training program, if funding is available for
child care and training. The federal welfare reform bill,
PL 104-193, made numerous changes to social and health
services including placing federal AFDC (now TANF) and
federal child care funding into two separate block grants,
increasing the flexibility of states to revise TANF and
child care programs, and increasing the percentage of the
AFDC caseload that must be employed or in a
federally-approved work activity (the percentages are
called work participation rates). In addition, the federal
bill imposed a 60-month, cumulative lifetime limit on the
receipt of federal TANF benefits by adult recipients, but
allowed states to exempt 20% of the caseload from this
limit. The federal bill also requires certain recipients
to be engaged in a work activity after 24 cumulative months
on aid.
The Conference Committee on Welfare Reform proposes four
bills to implement the new federal law: SB 285, SB 293, AB
1006 and AB 1501. The proposed amendments to AB 1006
implement numerous changes to address the new federal law.
INTENT OF CALWORKs
The proposed amendments express Legislative intent to
establish goals for California's welfare-to-work plan,
including increasing access to private sector jobs without
displacement of currently working low wage earners and
encouraging strategic planning by counties to stimulate job
creation. The amendments rename the AFDC program to the
California Work Opportunity and Responsibility to Kids
program, called "CalWORKs".
LUMP SUM DIVERSION
Current law does not permit counties to offer a lump sum
cash payment to families facing a financial crises in order
to prevent the need for the family to become recipients of
AFDC. The proposed amendments authorize counties to
provide certain applicants with up to 3 months of aid as a
lump sum in order to assist a family through a short term
financial crisis and avoid reliance on the regular cash
assistance program.
CHILD SUPPORT ASSURANCE
The proposed amendments authorize counties to operate a
welfare avoidance program under which recipients who have
both earnings and a child support order could receive a
monthly "assured" payment from the county, in an amount
less than regular cash aid. When combined with the
parent's earnings, the child support assurance payment is
intended to allow the family to avoid reliance on the
regular cash assistance program. The county district
attorney's office would be responsible for collecting the
child support payment from the absent parent to reimburse
the county, as under the regular cash assistance program.
OVERPAYMENT RECOVERIES
Under current law, overpayments to recipients are
calculated using different formulas. The proposed
amendments are intended to simplify overpayment recoveries,
and remove current enhanced penalties on working families,
by calculating collections as a straight percentage of the
maximum aid payment to the household. The percentages
would be a 5% per month reduction when the overpayment is
due to county welfare department error or 10% when the
overpayment is caused by client error.
RESOURCES AND AUTOMOBILES
Current law limits the value of the resources (assets) a
recipient of AFDC, Food Stamps or other programs can have
and still meet eligibility criteria; the limits vary by
program though it is often the same county eligibility
worker who must perform the calculation for the same
household. For example, the current limits for automobiles
are $1,500 for applicants for AFDC, $4,500 for recipients
of AFDC and $4,650 for recipients of Food Stamps. The
proposed amendments would simplify and consolidate
eligibility determination processes at the county level by
allowing recipients and applicants for aid to exempt from
the calculation of resources the value of one automobile
and, if there is more than one working adult in the
household, a second vehicle with a value up to $4,500. The
proposed amendments also requires counties to use the rules
of the Food Stamp program when determining countable assets
and valuing personal property for applicants and recipients
of CalWORKs.
CALIFORNIA ASSET AND SAVINGS ACT
The amendments authorize very low income individuals with
earned income, including CalWORKs recipients, to set up
individual development "savings" accounts (IDAs) using
their own earnings or other funds available from non-state
sources. The IDA's could be used only for payments to an
educational institution for postsecondary education,
purchasing a residence or to capitalize a business. Funds
in an IDA account would be excluded in determining
eligibility for public benefits. The amendments also
establish a five-year demonstration project, contingent
upon the appropriation of federal funds, that permits the
matching of individual contributions by federal or private
funds.
UNEMPLOYED PARENT (2-PARENT FAMILIES)
Current state law limits the eligibility of two-parent
families applying for aid to that required by previous
federal law, including a requirement that at least one
parent must have had qualifying work experience in six
quarters during the past three years. The proposed
amendments eliminate, for applicants, the prior earnings
requirement and instead allow the family to qualify if they
meet the regular income tests and are unemployed.
EXTENSION OF COLA AND 4.9% GRANT REDUCTION
Current law provides that a 4.9% grant cut enacted in 1995
shall sunset on October 31, 1997. Current law also
provides that the suspension of the statutory
cost-of-living adjustment (COLA) for the AFDC program shall
sunset on November 1, 1997. The proposed amendments
suspend for one more year, through October 31, 1998, the
elimination of the 4.9% grant reduction and also postpone
for one year, until November 1, 1998, the cost of living
adjustment.
CHILD SUPPORT DISREGARD
Under previous federal law, up to the first $50 of child
support received in a month on behalf of children on AFDC
was "disregarded" and paid directly to the household
without a commensurate grant reduction. The proposed
amendments increase the amount of child support paid
directly to a family from a maximum of $50 to a maximum of
$75 per month.
INCOME DISREGARD
Current state law contains a complex calculation for
determining the amount of income a parent on aid with
earnings can "disregard", such that the earnings are not
counted against the grant payment. The primary intent of
the existing system is to provide an incentive for adult
recipients to obtain employment by allowing this disregard
of a portion of earnings. The current formula allows a
recipient to disregard a $90 work expense allowance, the
first $30 of earnings, and then disregard 33% of earnings
over that $120. In addition, earnings up to the difference
between a "standard-of-need" and the maximum aid payment
allowed, are disregarded 100%.
The proposed amendments would establish a simplified income
disregard. Families would be able to disregard the first
$350 of income and half of the remaining earnings before
grants would be reduced. The intent of this change is to
provide a work incentive by allowing county staff and
recipients to more readily understand the impact that
increased earnings would have on the income of the family
and the amount of the grant payment. (For applicants, the
$90 work expense disregard and the need standard gap would
be continued; the $30 and 1/3 income disregard would not
apply, as in current law.)
CAL LEARN EXTENSION
Existing law requires that teen parents must attend school
through age 18 to earn a high school diploma or GED; bonus
payments and grant reductions are applied depending on
whether the teen makes adequate progress in school. The
proposed amendments extend the existing Cal-Learn program
to teen parents aged 19 if they are still lacking a high
school diploma or GED.
SELF-EMPLOYMENT TRAINING
Current law permits an AFDC recipient to participate in
self employment training under the GAIN program, but due to
numerous restrictions in the current law, it is not often
used. The proposed amendments allow recipients of CalWORKs
to participate in training for self-employment, such as
employment as a child care provider, in order to meet the
work participation requirements. The amendments also
revise the method by which counties calculate net income to
account for the earnings of self-employed recipients. The
amendments further authorize pilot projects under which
nonprofit agencies will train qualified recipients to
become self-employed.
JOBS PLUS
The proposed amendments would authorize Los Angeles County
to request implementation of special rules on the treatment
of income for families participating in the JobsPlus
demonstration, a national experiment aimed at increasing
work and earnings among public housing residents. The
demonstration is being evaluated as to its effectiveness;
the evaluation design is based on specific rules on
earnings for the limited number of participants.
DOMESTIC VIOLENCE VICTIMS
The proposed amendments would provide benefits for up to a
maximum of six months to immigrants who are domestic
violence victims and are eligible for special residency
under the federal Violence Against Women Act (VAWA). The
amendments are intended to permit these domestic violence
victims, who have initiated the citizenship process but are
prevented from completing the process because they have
ended the relationship with the batterer (who is their
legal sponsor), to be eligible for aid for six months while
they attempt to become naturalized citizens.
DISABILITY APPLICATION ASSISTANCE
Background: PL 104-193 barred current and future legal
noncitizens from receiving Supplemental Security Income
(SSI) with specified exceptions. The SSI program is a
federally administered and predominantly federally-funded
program for the aged, blind, and disabled. For legal
noncitizens, the typical grant is about $570 with the
federal government paying about $400, and California
providing an SSP payment of about $170. The provisions of
the new federal welfare reform bill made legal noncitizen
recipients as of August 22, 1996, ineligible for the
program effective August 22, 1997.
In recent months, Congress has been exploring altering the
bar for legal immigrants. Based on pending federal
legislation, at the present time, it appears likely that
disabled SSI legal noncitizen recipients who were residents
before August 22, 1996 will retain eligibility and those
who become disabled in the future will be eligible, as
well. Also, it is possible that the current elderly
recipients who are noncitizens will retain eligibility. In
California, as of April 1997, there were an estimated
200,000 legal noncitizen recipients: 3,368 were children,
84,687 were disabled, and 111,204 were aged. The
Congressional Budget Office estimates that 2/3rds of aged,
legal noncitizen SSI recipients could requalify for SSI
under the disability category which would maximize federal
funds for support of this population.
Amendments
The amendments would utilize county disability application
assistance programs to assist elderly, legal immigrant SSI
recipients to requalify for SSI on the basis of disability
if they lose their federal SSI/SSP benefits due to the
disqualification of elderly recipients. Funds would be
allocated to counties based on the county's percentage of
the total number of aged noncitizen SSI/SSP recipients.
The proposed amendments stipulate that if the federal law
does not exclude aged noncitizen SSI recipients from
eligibility, there shall be no funds allocated for this
purpose.
CITIZENSHIP ASSISTANCE
The amendments establish a naturalization assistance
program to assist legal immigrants in naturalizing and
thereby retaining their eligibility for federal SSI/SSP
benefits.
STATE-ONLY SSI PROGRAM
The proposed amendments creates a state-only program for
SSI/SSP for legal immigrants who are not eligible for
federal SSI/SSP benefits due to recent federal restrictions
on legal noncitizens. The amendments also directs DSS to
attempt to enter into an agreement with the Social Security
Administration for administration of the program.
STATE ASSISTANCE FOR CHILDREN
The federal welfare reform bill restricted eligibility
criteria for children in the SSI program. Rather than
predicating eligibility upon a medical impairment or an
individual functional assessment which shows that the child
is seriously limited from performing age-appropriate
behaviors, a new disability standard was established which:
eliminated the comparable severity standard; eliminated
the individual functional assessment and references to
maladaptive behavior; and set a higher standard of severity
for mental and physical impairments.
The proposed amendments create a one year state-only SSI
program for children losing their SSI eligibility due to
the new disability standard in the federal law. The
amendments require the state, during this time, to study
these children's needs for benefits and services. An
estimated 10,000 California children could qualify for this
program.
IHSS FOR LEGAL IMMIGRANTS
Current state law links In Home Supportive Services (IHSS)
eligibility to SSI eligibility; thus, legal immigrants who
no longer qualify for SSI would lose their IHSS services as
well. The proposed amendments preserve eligibility for
IHSS for individuals who would be eligible but for the
provisions in the federal welfare reform law.
STATE-ONLY FOOD STAMPS
The new federal welfare reform bill also eliminates
eligibility for legal immigrants for Food Stamps benefits,
unless they meet specified exemption criteria. In
California, there are over 400,000 legal immigrants
receiving Food Stamps benefits; it is estimated that up to
350,000 may not meet exemption criteria. The scheduled
date for the termination of eligibility for Food Stamps is
September 1, 1997 for those who are not exempt and who have
not become naturalized citizens by that date. The proposed
amendments would establish a state-only Food Stamp program
for legal immigrants who are not currently eligible for
federal Food Stamps due to the new federal restrictions on
legal noncitizens. The amendments require that the program
be operated in cooperation with the federal USDA.
FOOD STAMPS FOR UNEMPLOYED
The federal welfare reform bill imposed new restrictions on
receipt of Food Stamp benefits by able-bodied, unemployed
adults without dependents unless they are participating in
a county operated work program. The proposed amendments
require the state to apply for waivers of federal law, as
specified, to enable persons who are unemployed to continue
to receive Food Stamps when jobs are unavailable in the
local area.
MAINTENANCE OF EFFORT
The new federal law requires states to meet specified
"maintenance of effort" or expenditures levels of state
funds for CalWORKs eligible households. The proposed
amendments require the State Department of Social Services
to establish for California the state and county components
of the maintenance of effort as required under federal law.
IMPLEMENTATION PROVISIONS
The proposed amendments provide that programs authorized by
this act are not new programs for the purposes of certain
provisions of law and provides that emergency regulations
may be promulgated to implement the bill. Also, the
amendments specify that counties shall remain responsible
for discretionary services and may contract out services to
the extent allowed under state and federal law as of August
21, 1996.
PROGRAM SIMPLIFICATION
To simply eligibility procedures, the proposed amendments
require state agencies operating public social services
programs to align program eligibility procedures to the
extent permitted by federal law.
DRUG MEDI-CAL
The proposed amendments require that funds expended by
counties for drug and alcohol treatment services do not
impact the overall statewide cap on Drug Medi-Cal
reimbursements.
OTHER
The amendments specify that the counties shall remain
responsible for eligibility determinations, and may
contract out other services to the extent allowed under
state and federal law as of August 21, 1996.
The amendments specify that this bill will become not
operative until the Budget Act of 1997 is chaptered.
By: Senate Health & Human Services Committee
Sara McCarthy/Ellen Dektar