Existing federal law provides for the allocation of federal funds through the federal Temporary Assistance for Needy Families (TANF) block grant program to eligible states. Existing law provides for the California Work Opportunity and Responsibility to Kids (CalWORKs) program under which, through a combination of state and county funds and federal funds received through the TANF program, each county provides cash assistance and other benefits to qualified low-income families. Under existing law, certain amounts are exempt from the calculation of family income for purposes of determining the amount of a grant under the CalWORKs program, including specified amounts of disability-based unearned income and earned income.

This bill would exempt benefits and related allowances received through the United States Department of Veterans Affairs for education, training, vocation, or rehabilitation from consideration as income for purposes of determining eligibility for CalWORKs program benefits and calculating grant amounts for veterans and their spouses and dependents, under specified circumstances. By imposing additional duties on counties, this bill would impose a state-mandated local program.

Existing law continuously appropriates moneys from the General Fund to defray a portion of county costs under the CalWORKs program.

This bill would instead provide that the continuous appropriation would not be made for purposes of implementing the bill.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing federal law provides for the allocation of federal funds through the federal Temporary Assistance for Needy Families (TANF) block grant program to eligible states. Existing law provides for the California Work Opportunity and Responsibility to Kids (CalWORKs) program under which, through a combination of state and county funds and federal funds received through the TANF program, each county provides cash assistance and other benefits to qualified low-income families. Under existing law, certain amounts are exempt from the calculation of family income for purposes of determining the amount of a grant under the CalWORKs program, including specified amounts of disability-based unearned income and earned income.

This bill would exempt benefits and related allowances received through the United States Department of Veterans Affairs for education, training, vocation, or rehabilitation from consideration as income for purposes of determining eligibility for CalWORKs program benefits and calculating grant amounts for veterans and their spouses and dependents, under specified circumstances. By imposing additional duties on counties, this bill would impose a state-mandated local program.

Existing law continuously appropriates moneys from the General Fund to defray a portion of county costs under the CalWORKs program.

This bill would instead provide that the continuous appropriation would not be made for purposes of implementing the bill.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing federal law provides for the allocation of federal funds through the federal Temporary Assistance for Needy Families (TANF) block grant program to eligible states. Existing law provides for the California Work Opportunity and Responsibility to Kids (CalWORKs) program under which, through a combination of state and county funds and federal funds received through the TANF program, each county provides cash assistance and other benefits to qualified low-income families. Under existing law, certain amounts are exempt from the calculation of family income for purposes of determining the amount of a grant under the CalWORKs program, including specified amounts of disability-based unearned income and earned income.

This bill would exempt benefits and related allowances received through the United States Department of Veterans Affairs for education, training, vocation, or rehabilitation from consideration as income for purposes of determining eligibility for CalWORKs program benefits and available income calculating grant amounts for veterans and their spouses and dependents, under specified circumstances. By imposing additional duties on counties, this bill would impose a state-mandated local program.

Existing law continuously appropriates moneys from the General Fund to defray a portion of county costs under the CalWORKs program.

This bill would instead provide that the continuous appropriation would not be made for purposes of implementing the bill.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing federal law provides for the allocation of federal funds through the federal Temporary Assistance for Needy Families (TANF) block grant program to eligible states. Existing law provides for the California Work Opportunity and Responsibility to Kids (CalWORKs) program under which, through a combination of state and county funds and federal funds received through the TANF program, each county provides cash assistance and other benefits to qualified low-income families. Under existing law, certain amounts are exempt from the calculation of family income of the family for purposes of determining the amount of a grant under the CalWORKs program, including specified amounts of disability-based unearned income and earned income.

This bill would exempt benefits and related allowances received through the federal United States Department of Veterans Affairs for education, training, vocation, or rehabilitation from consideration as income for determining eligibility for CalWORKs program benefits and available income for specified individuals, including active duty personnel and veterans. veterans and their spouses and dependents, under specified circumstances. By imposing additional duties on counties, this bill would impose a state-mandated local program.

Existing law continuously appropriates moneys from the General Fund to defray a portion of county costs under the CalWORKs program.

This bill would instead provide that the continuous appropriation would not be made for purposes of implementing the bill.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law establishes the California Work Opportunity and Responsibility to Kids (CalWORKs) program, under which each county provides cash assistance and other benefits to qualified low-income families using federal, state, and county funds. Existing law requires a recipient of CalWORKs to participate for a specified number of hours each week in welfare-to-work activities as a condition of eligibility. Existing law deems a recipient who is making satisfactory progress in a career pathway program established in accordance with the federal Workforce Innovation and Opportunity Act to be in compliance with the hourly participation requirements of the CalWORKS program, under specified conditions.

This bill would repeal those provisions, and would instead deem an applicant or recipient who is making satisfactory progress in a publicly funded secondary educational institution to be in compliance with the hourly participation requirements of the CalWORKs program, as specified. To the extent that the bill would expand eligibility for CalWORKs benefits, it would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law continuously appropriates moneys from the General Fund to defray a portion of county costs under the CalWORKs program.

Because moneys from the General Fund are continuously appropriated to defray a portion of county aid grant costs under the CalWORKS program, by expanding eligibility for aid payments, this bill would make an appropriation of General Fund moneys.

 UNFINISHED BUSINESS 

Bill No: SB 570

Author: Newman (D), et al.

Amended: 7/3/17

Vote: 21

SENATE HUMAN SERVICES COMMITTEE: 5-0, 4/25/17

AYES: Wiener, Berryhill, Glazer, Newman, Nguyen

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/25/17

AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener

SENATE FLOOR: 40-0, 5/31/17 (Consent)

AYES: Allen, Anderson, Atkins, Bates, Beall, Berryhill, Bradford, Cannella, De León, Dodd, Fuller, Gaines, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Newman, Nguyen, Nielsen, Pan, Portantino, Roth, Skinner, Stern, Stone, Vidak, Wieckowski, Wiener, Wilk

ASSEMBLY FLOOR: 78-0, 9/7/17 - See last page for vote

SUBJECT: CalWORKs

SOURCE: Author

DIGEST:

This bill exempts United States Department of Veterans Affairs (VA) education, training, vocation, or rehabilitation benefits received by a veteran, or spouse or dependent of a veteran who died in the line of duty or has a service-connected disability, from being considered as income for purposes of determining eligibility for California Work Opportunity and Responsibility to Kids (CalWORKs) program benefits and calculating grant amounts.

Assembly Amendments

clarify that the provisions of this bill apply not only to the determination of eligibility for CalWORKs, but also to the calculation of CalWORKs benefit levels.

ANALYSIS:

Existing law:

1. Establishes the federal Temporary Assistance for Needy Families (TANF) program, which permits states to implement the program under a state plan.
2. Establishes in federal law several education programs available to military veterans, including post-9/11 educational assistance and a housing stipend, as specified.
3. Establishes in state law the CalWORKs program to provide cash assistance and other social services for low-income families through the federal TANF program. Under CalWORKs, each county provides assistance through a combination of state, county and federal TANF funds.
4. Establishes CalWORKs income, asset and real property limits used to determine eligibility for the program, including net income below the Maximum Aid Payment, based on family size and county of residence, which is approximately 40 percent of the Federal Poverty Level.
5. Prohibits a CalWORKs applicant or recipient’s educational expenses from being applied to any educational loans or grants he or she receives that are exempt from consideration as income for purposes of determining CalWORKs eligibility.
6. Provides that certain income is exempt from the calculation of income for purpose of grant calculation under the CalWORKs program, including specified amounts of disability-based unearned income and earned income and including disability based unearned income provided as veteran’s disability compensation.

This bill:

1. Requires that if a CalWORKs applicant or recipient is active duty personnel, a veteran, the dependent of a veteran, or the spouse of a veteran who died in the line of duty or who has a service-connected disability, benefits received for education, training, vocation, or rehabilitation and related allowances through the VA shall be exempt from consideration as income for purposes of determining eligibility for CalWORKs benefits or available income.

Background

CalWORKs. CalWORKs, one of the state’s most important anti-poverty programs, provides monthly income assistance and employment-related services aimed at moving children out of poverty and helping families meet basic needs. CalWORKs components include education, employment and training programs.

In order to be eligible for CalWORKs, families must meet income and asset tests, both of which require specified calculations that take into account many factors, including earned income, disability-based unearned income, and other unearned income. Federal law enables states to determine the amount of income that may be disregarded when determining CalWORKs eligibility. In California, CalWORKs program rules (MPP Division 44, Chapter 111.43) tend to exempt education loans and grants from being considered as income for purposes of determining eligibility or calculating grant amounts. If such benefits are not exempted, they could be viewed as income or “unearned income” which could affect the eligibility and grant amount for CalWORKs applicants and recipients.

Eligibility standards require that a family’s countable income must be less than the “Minimum Basic Standard of Adequate Care,” which varies based on family size and where the family resides (some areas in California are designated high cost of living areas). A family of three living in a high cost of living area must earn less than $1,342 in countable monthly income in order to be eligible for CalWORKs benefits. Additionally, family assets must be no more than $2,250 in savings ($3,250 where the assistance unit includes at least one member who is disabled or aged 60 or older), excluding education and retirement plans, plus one car worth less than $9,500 or that was received as a gift or family transfer or donation.

The average monthly cash grant for a family of three on CalWORKs (one parent and two children) in Fiscal Year 2016-17 is estimated at $514, and the maximum monthly grant amount for a family of three, if the family has no other income and lives in a high-cost county, is $714. According to recent data from the California Department of Social Services (CDSS), approximately 485,850 families rely on CalWORKs. Nearly 60 percent of cases include children under six years old and two-thirds of CalWORKs cases are headed by a single parent.

GI Bill. According to the California Department of Veterans Affairs, more than 1.8 million veterans live in California. It is anticipated that California will receive an additional 30,000 discharged members of the armed services each year for the next several years – more than any other state. Additionally, more than 190,000 active duty military personnel lived in California as of May 2016, also more than any other state.

The original GI Bill was enacted by Congress to help pave an easy transition for World War II veterans returning home. Although the bill provided a variety of benefits, including down-payments on homes, one of its best-known benefits was to provide tuition payments for servicemen. In 2008, a “Post-9/11 GI Bill” was enacted to provide enhanced educational benefits, money for books and a living allowance to veterans with active duty service on or after September 11, 2001. The bill allows veterans to transfer any unused educational benefits to their spouses or children, with specified allowances.

GI Bill Benefits and CalWORKs. GI benefits can come in the form of cash, services, or direct payments to schools or other entities. Existing California law exempts GI Bill education benefits from calculation to determine CalWORKs eligibility, but the statute was not updated after the Post-9/11 GI Bill and is silent as to whether housing stipends available for Post-911 GI Bill recipients or education benefits received by survivors are exempt from consideration under the CalWORKs program.

According to CDSS, “Veterans may receive federal benefits from the VA which may include housing and insurance benefits, disability benefits, adapted housing grants, service-disabled veterans’ insurance, and veterans’ mortgage life insurance. Per current state regulations…all VA benefits are exempt from being counted as income for CalWORKs determination (including educational expenses, tuition, disability benefits) except the VA monthly housing allowance. This allowance is considered to be unearned income in determining CalWORKs benefits. It does not fall under the educational grants exemption as it is not applied directly to educational expenses, and does not meet any other income exclusions or exemptions.” Additionally, tuition that is transferred to a spouse or dependent may be counted as unearned income and factored into CalWORKs eligibility and benefits determination.

Related/Prior Legislation

AB 743 (Eggman, Statutes of 2015) proposed, among other things, to exempt from consideration in determining CalWORKs eligibility and benefits, the education, training, vocation, or rehabilitation benefits provided through the VA for active duty personnel, veterans, dependents, or spouses, as specified. The bill was held in Senate Appropriations Committee.

AB 1094 (Brown, Chapter 554, Statues of 2013) expanded the definition of disability-based unearned income to include veteran’s disability compensation to help California’s veterans.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Assembly Appropriations Committee:

1. One-time costs to CDSS of approximately $300,000 for automation changes (GF).
2. Unknown, potentially significant costs to CDSS for an increase in additional grant amounts to accommodate exempted VA benefits (federal funds/GF).
3. Unknown costs, likely minor, to county social workers due to increased applications as a result of this bill. These costs could be potentially offset to an unknown extent due to a reduction in caseworker time needed for existing cases and other administrative efficiencies. These costs are potentially reimbursable by the Commission on State Mandates, but it is unlikely a county would submit a claim.

SUPPORT: (Verified 9/6/17)

Western Center on Law and Poverty (source)

American Federation of State County and Municipal Employees

California Alternative Payment Program Association

California Catholic Conference

California Women’s Law Center

Courage Campaign

National Association of Social Workers

OPPOSITION: (Verified 9/6/17)

None received

ASSEMBLY FLOOR: 78-0, 9/7/17

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: McCarty

Prepared by: Taryn Smith / HUMAN S. /

9/8/17 20:41:18

**** END ****

SENATE THIRD READING

STR Bill Id:SB 570

Author:(Newman)

As Amended Ver:July 3, 2017

Majority vote

SENATE VOTE: 40-0

SUMMARY: Exempts United States Department of Veterans Affairs [VA] education, training, vocation, or rehabilitation and related benefits received by a veteran or spouse or dependent of a veteran who died in the line of duty or has a service-connected disability from being considered as income for purposes of determining eligibility for or amount of CalWORKs benefits, and stipulates that no appropriation, as specified, shall be made to implement the provisions of this bill.

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 601 et seq., Welfare and institutions Code (WIC) 11200 et seq.)
2. Establishes income, asset, and real property limits used to determine eligibility and benefit amounts for the CalWORKs program, including net income below the Maximum Aid Payment (MAP), based on family size and county of residence, which is around 40% of the Federal Poverty Level. (WIC 11150 to 11160, 11450 et seq.)
3. Establishes a 48-month lifetime limit on CalWORKs benefits for eligible adults, including a period beyond the "24 month clock" during which a recipient must meet federal work requirements in order to retain eligibility. (WIC 11454, 11322.85)
4. Requires all individuals 16 years of age or older, unless they are otherwise exempt, to participate in welfare-to-work activities as a condition of eligibility for CalWORKs. (WIC 11320.3, 11322.6)
5. Establishes the number of weekly hours of welfare-to-work participation necessary to remain eligible for aid, including requirements for an unemployed parent in a two-parent assistance unit, as specified. (WIC 11322.8)
6. Defines disability-based unearned income, within the CalWORKs program, as state disability insurance benefits, private disability insurance benefits, temporary workers' compensation benefits, social security disability benefits, and any veteran's disability compensation. (WIC 11451.5)
7. Defines earned income as gross income received as wages, salary, employer-provided sick leave benefits, commissions, or profits from activities such as a business enterprise or farming in which the recipient is engaged as a self-employed individual or as an employee. (WIC 11451.5)
8. Exempts the following when calculating a family's income for the purpose of determining CalWORKs eligibility:

If the family's disability-based unearned income does not exceed $225

1. All disability-based unearned income, plus any amount of not otherwise exempt earned income equal to the amount of the difference between the amount of disability-based unearned income and $225; and
2. Fifty percent of all not otherwise exempt earned income in excess of the amount applied to the difference between the amount of disability-based income and $225.

If the family's disability-based unearned income exceeds $225

1. All of the first $225 in disability-based unearned income; and
2. Fifty percent of all earned income. (WIC 11451.5)

FISCAL EFFECT: According to the Assembly Appropriations Committee on August 23, 2017, this bill may result in the following costs:

1. One-time costs to the Department of Social Services (DSS) of approximately $300,000 for automation changes (General Fund);
2. Unknown, potentially significant costs to DSS for an increase in additional grant amounts to accommodate exempted VA benefits (federal funds/General Fund); and
3. Unknown costs, likely minor, to county social workers due to increased applications as a result of this bill. These costs could be potentially offset to an unknown extent due to a reduction in caseworker time needed for existing cases and other administrative efficiencies. These costs are potentially reimbursable by the Commission on State Mandates, but it is unlikely a county would submit a claim.

COMMENTS:

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. The average 2016-17 monthly CalWORKs cash grant is $533.67 per household, and the maximum monthly grant amount for a family of three, if the family has no other income and lives in a high-cost county, is currently $714, yielding an amount of $8,568 per year. The current federal poverty threshold for a family of three is $20,420 per year.

CalWORKs eligibility and benefits determination: Determination of CalWORKs eligibility and benefit amounts can involve a number of considerations and calculations. Generally, in addition to needing to meet certain asset tests (i.e., limits on the amount and/or value of resources a family can own), a family must have a "countable" monthly income that falls below the needs standard (or "minimum basic standard of adequate care" [MBSAC]) for that family size in order to be eligible for CalWORKs benefits. This countable income is calculated by taking into consideration earned income and unearned income, and by disregarding certain exempted or excluded sources of income (such as, among others, Earned Income Tax Credit (EITC) refunds and any earnings of a child under the age of 19 who is attending school under specified terms).

In order to determine the monthly CalWORKs grant amount a family would receive, another set of considerations and calculations are necessary, which take into account earned income, disability-based unearned income, and other unearned income, and which also, as with eligibility determination, exempt certain sources of income.

For both eligibility determination and computation of monthly CalWORKs grant amounts, many education loans and grants are not considered income pursuant to regulations found in the DSS Manual of Policies and Procedures (MPP) Division 44, Chapter 111.43.

G.I. Bill and the determination of CalWORKs eligibility and benefits: California hosts eight percent (1.8 million veterans) of the total veteran population in the United States. According to the California Department of Veterans Affairs, the state expects to receive, annually, an additional 30,000 discharged members over the next several years; this is more than any other state. It has generally been the case that some of the biggest demand for supports and services for veterans takes place right after discharge. For decades, federal policy has aimed to meet these needs in various ways. One of the most significant pieces of federal legislation, the Servicemen's Readjustment Act of 1944 (Public Law 78-346) – commonly referred to as the G.I. Bill – provided federal aid to veterans to assist in their return to civilian life. This aid was targeted towards, among other things, purchase of homes and education. The original G.I. Bill provided a suite of educational supports, including tuition, books and supplies, equipment, counseling services and subsistence for veterans seeking to continue their education.

The G.I. Bill was updated in 1984, and came to be referred to as the "Montgomery G.I. Bill" (Chapter 30, Title 38, U.S. Code) after the updating piece of legislation's author, Mississippi Representative Gillespie Montgomery. Years later, the federal Supplemental Appropriations Act of 2008 (Public Law 110-252) contained the Post-9/11 Veterans Educational Assistance Act of 2008, which is often referred to as the Post-9/11 G.I. Bill. The Post-9/11 G.I. bill provides enhanced educational supports and a housing allowance for veterans with active duty service after September 10, 2001; it also permits for transfer of some educational benefits to spouses and dependent children in certain circumstances. Today, depending on his or her eligibility, a veteran may be able to choose between Montgomery G.I. Bill and Post-9/11 G.I. Bill benefits.

An individual may receive G.I. Bill supports in the form of cash, services, and direct payments to schools and other entities. Federal law enables states to decide how much of a TANF recipient's income to disregard when determining eligibility. In California, CalWORKs program rules (MPP Division 44, Chapter 111.43) tend to exempt education loans and grants from being considered as income for purposes of determining eligibility or calculating grant amounts. According to DSS, "Veterans may receive federal benefits from the VA which may include housing and insurance benefits, disability benefits, adapted housing grants, service-disabled veterans' insurance, and veterans' mortgage life insurance. Per current state regulations…all VA benefits are exempt from being counted as income for CalWORKs determination (including educational expenses, tuition, disability benefits) except the VA monthly housing allowance. This allowance is considered to be unearned income in determining CalWORKs benefits. It does not fall under the educational grants exemption as it is not applied directly to educational expenses, and does not meet any other income exclusions or exemptions." Additionally, tuition that is transferred to a spouse or dependent may be counted as unearned income and factored into CalWORKs eligibility and benefits determination.

Need for this bill: According to the author, "It would be preferred if G.I. Bill benefits were enough to keep a veteran family out of poverty, but absent federal support to achieve that goal, we should make sure that state law is as helpful it can be to ensure that California's veteran parents seeking education so that they can exit poverty should be supported to the full extent possible. This clarification will achieve that goal."

The Western Center on Law and Poverty and the Coalition of California Welfare Rights Organizations, sponsors of this bill, contend that state law should be clarified and updated to ensure – on par with current-law exemptions of other education benefits – the exemption of benefits provided under the Post-9/11 G.I. Bill (such as housing allowances and transfer of tuition benefits to family members) from CalWORKs eligibility and benefits determination.

PRIOR LEGISLATION:

AB 743 (Eggman) of 2015, would have, among other things, exempted from consideration as income or property for purposes of determining CalWORKs eligibility any education, training, vocation, or rehabilitation benefits, and related allowances provided through the U.S. Department of Veterans Affairs to active duty personnel, veterans, or dependents or spouses of those who died in the line of duty or had a service-connected disability. It died in the Senate Appropriations Committee.

AB 1094 (Brown), Chapter 554, Statutes of 2013, expanded the definition of disability-based unearned income to include veteran's disability compensation for purposes of the income disregard under the CalWORKs program.

Analysis Prepared by: Daphne Hunt / HUM. S. / (916) 319-2089 FN: 0001653

Date of Hearing: August 23, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

SBPCA Bill Id:SB 570

Author:(Newman) – As Amended Ver:July 3, 2017

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill exempts United States Department of Veterans Affairs (VA) education, training, vocation, or rehabilitation benefits received by a veteran, or spouse or dependent of a veteran who died in the line of duty or has a service-connected disability, from being considered as income for purposes of determining eligibility for California Work Opportunity and Responsibility to Kids (CalWORKs) program benefits and calculating grant amounts.

FISCAL EFFECT:

1. One-time costs to the Department of Social Services (DSS) of approximately $300,000 for automation changes (GF).
2. Unknown, potentially significant costs to DSS for an increase in additional grant amounts to accommodate exempted VA benefits (federal funds/GF).
3. Unknown costs, likely minor, to county social workers due to increased applications as a result of this bill. These costs could be potentially offset to an unknown extent due to a reduction in caseworker time needed for existing cases and other administrative efficiencies. These costs are potentially reimbursable by the Commission on State Mandates, but it is unlikely a county would submit a claim.

COMMENTS:

1. Purpose. According to the author, “It would be preferred if G.I. Bill benefits were enough to keep a veteran family out of poverty, but absent federal support to achieve that goal, we should make sure that state law is as helpful it can be to ensure that California’s veteran parents seeking education so that they can exit poverty should be supported to the full extent possible. This clarification will achieve that goal.”
2. Background. Existing law establishes the CalWORKs program, under which each county provides cash assistance and other social services using federal Temporary Assistance for Needy Families (TANF) block grant funds, state, and county funds. DSS provides oversight of the CalWORKs program at the state-level.

Under existing law, if an applicant or recipient of CalWORKs benefits receives one or more educational loans or grants, for purposes of determining availability of income, that person’s educational expenses are not applied to any educational loans or grants that, under federal or state law, are totally exempt from consideration as income for purposes of determining CalWORKs eligibility.

The Post-9/11 GI Bill provides for an education benefit program for individuals who served on active duty after September 10, 2001. Benefits include tuition and fee payment paid to the educational institution, a monthly housing allowance, as well as a stipend for books and supplies. Although existing law currently exempts the educational benefits received through the Post-9/11 GI Bill from the calculation of income for purposes of determining CalWORKs eligibility, existing statute is silent with respect to how housing allowances are considered, and whether educational benefits received by survivors or transferred to family members are similarly exempt from income eligibility consideration.

This bill seeks clarify how these benefits are treated when determining CalWORKs eligibility.

1. Prior Legislation.

AB 743 (Eggman), of the 2015-16 Legislative Session, would have, among other things, exempted from consideration as income or property for purposes of determining CalWORKs eligibility any education, training, vocation, or rehabilitation benefits, and related allowances provided through the VA to active duty personnel, veterans, or dependents or spouses of those who died in the line of duty or had a service-connected disability. AB 743 was held in the Senate Appropriations Committee on Suspense.

AB 1094 (Brown), Chapter 554, Statutes of 2013, expanded the definition of disability-based unearned income to include veteran’s disability compensation for purposes of the income disregard under the CalWORKs program.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: June 27, 2017

ASSEMBLY COMMITTEE ON HUMAN SERVICES

Blanca Rubio, Chair

SBPCA Bill Id:SB 570

Author:(Newman) – As Amended Ver:April 27, 2017

SENATE VOTE: 40-0

SUBJECT: CalWORKs

SUMMARY: Exempts United States Department of Veterans Affairs [VA] education, training, vocation, or rehabilitation benefits received by a veteran, or spouse or dependent of a veteran who died in the line of duty or has a service-connected disability from being considered as income for purposes of determining eligibility for CalWORKs benefits or available income, and stipulates that no appropriation, as specified, shall be made to implement the provisions of this bill.

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 U.S.C. 601 et seq., WIC 11200 et seq.)
2. Establishes income, asset, and real property limits used to determine eligibility and benefit amounts for the CalWORKs program, including net income below the Maximum Aid Payment (MAP), based on family size and county of residence, which is around 40% of the Federal Poverty Level. (WIC 11150 to 11160, 11450 et seq.)
3. Establishes a 48-month lifetime limit on CalWORKs benefits for eligible adults, including a period beyond the “24 month clock” during which a recipient must meet federal work requirements in order to retain eligibility. (WIC 11454, 11322.85)
4. Requires all individuals 16 years of age or older, unless they are otherwise exempt, to participate in welfare-to-work activities as a condition of eligibility for CalWORKs. (WIC 11320.3, 11322.6)
5. Establishes the number of weekly hours of welfare-to-work participation necessary to remain eligible for aid, including requirements for an unemployed parent in a two-parent assistance unit, as specified. (WIC 11322.8)
6. Defines disability-based unearned income, within the CalWORKs program, as state disability insurance benefits, private disability insurance benefits, temporary workers’ compensation benefits, social security disability benefits, and any veteran’s disability compensation. (WIC 11451.5)
7. Defines earned income as gross income received as wages, salary, employer-provided sick leave benefits, commissions, or profits from activities such as a business enterprise or farming in which the recipient is engaged as a self-employed individual or as an employee. (WIC 11451.5)
8. Exempts the following when calculating a family’s income for the purpose of determining CalWORKs eligibility:

If the family’s disability-based unearned income does not exceed $225

1. All disability-based unearned income, plus any amount of not otherwise exempt earned income equal to the amount of the difference between the amount of disability-based unearned income and $225; and
2. Fifty percent of all not otherwise exempt earned income in excess of the amount applied to the difference between the amount of disability-based income and $225.

If the family’s disability-based unearned income exceeds $225

1. All of the first $225 in disability-based unearned income; and
2. Fifty percent of all earned income. (WIC 11451.5)

FISCAL EFFECT: According to the Senate Appropriations Committee on May 15, 2017, this bill may result in the following costs:

1. One-time costs to the Department of Social Services (DSS) of approximately $300,000 for automation changes (General Fund);
2. Unknown, potentially significant costs to DSS for an increase in additional grant amounts to accommodate exempted VA benefits (TANF/General Fund); and
3. Potential costs savings to DSS for a reduction in caseworker time needed to verify required documents from veterans.

COMMENTS:

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. The average 2016-17 monthly CalWORKs cash grant is $533.67 per household, and the maximum monthly grant amount for a family of three, if the family has no other income and lives in a high-cost county, is currently $714, yielding an amount of $8,568 per year. The current federal poverty threshold for a family of three is $20,420 per year.

CalWORKs eligibility and benefits determination: Determination of CalWORKs eligibility and benefit amounts can involve a number of considerations and calculations. Generally, in addition to needing to meet certain asset tests (i.e., limits on the amount and/or value of resources a family can own), a family must have a “countable” monthly income that falls below the needs standard (or “minimum basic standard of adequate care” [MBSAC]) for that family size in order to be eligible for CalWORKs benefits. This countable income is calculated by taking into consideration earned income and unearned income, and by disregarding certain exempted or excluded sources of income (such as, among others, Earned Income Tax Credit (EITC) refunds and any earnings of a child under the age of 19 who is attending school under specified terms).

In order to determine the monthly CalWORKs grant amount a family would receive, another set of considerations and calculations are necessary, which take into account earned income, disability-based unearned income, and other unearned income, and which also, as with eligibility determination, exempt certain sources of income.

For both eligibility determination and computation of monthly CalWORKs grant amounts, many education loans and grants are not considered income pursuant to regulations found in the DSS Manual of Policies and Procedures (MPP) Division 44, Chapter 111.43.

G.I. Bill and the determination of CalWORKs eligibility and benefits: California hosts eight percent (1.8 million veterans) of the total veteran population in the United States. According to the California Department of Veterans Affairs, the state expects to receive, annually, an additional 30,000 discharged members over the next several years; this is more than any other state. It has generally been the case that some of the biggest demand for supports and services for veterans takes place right after discharge. For decades, federal policy has aimed to meet these needs in various ways. One of the most significant pieces of federal legislation, the Servicemen’s Readjustment Act of 1944 (Public Law 78-346) – commonly referred to as the G.I. Bill, provided federal aid to veterans to assist in their return to civilian life. This aid was targeted towards, among other things, purchase of homes and education. The original G.I. Bill provided a suite of educational supports, including tuition, books and supplies, equipment, counseling services and subsistence for veterans seeking to continue their education.

The G.I. Bill was updated in 1984, and came to be referred to as the “Montgomery G.I. Bill” (Chapter 30, Title 38, U.S. Code) after the updating piece of legislation’s author, Mississippi Representative Gillespie Montgomery. Years later, the federal Supplemental Appropriations Act of 2008 (Public Law 110-252) contained the Post-9/11 Veterans Educational Assistance Act of 2008, which is often referred to as the Post-9/11 G.I. Bill. The Post-9/11 G.I. bill provides enhanced educational supports and a housing allowance for veterans with active duty service after September 10, 2001; it also permits for transfer of some educational benefits to spouses and dependent children in certain circumstances. Today, depending on his or her eligibility, a veteran may be able to choose between Montgomery G.I. Bill and Post-9/11 G.I. Bill benefits.

An individual may receive G.I. Bill supports in the form of cash, services, and direct payments to schools and other entities. Federal law enables states to decide how much of a TANF recipient’s income to disregard when determining eligibility. In California, CalWORKs program rules (MPP Division 44, Chapter 111.43) tend to exempt education loans and grants from being considered as income for purposes of determining eligibility or calculating grant amounts. According to DSS, “Veterans may receive federal benefits from the VA which may include housing and insurance benefits, disability benefits, adapted housing grants, service-disabled veterans’ insurance, and veterans’ mortgage life insurance. Per current state regulations…all VA benefits are exempt from being counted as income for CalWORKs determination (including educational expenses, tuition, disability benefits) except the VA monthly housing allowance. This allowance is considered to be unearned income in determining CalWORKs benefits. It does not fall under the educational grants exemption as it is not applied directly to educational expenses, and does not meet any other income exclusions or exemptions.” Additionally, tuition that is transferred to a spouse or dependent may be counted as unearned income and factored into CalWORKs eligibility and benefits determination.

Need for this bill: According to the author, “It would be preferred if G.I. Bill benefits were enough to keep a veteran family out of poverty, but absent federal support to achieve that goal, we should make sure that state law is as helpful it can be to ensure that California’s veteran parents seeking education so that they can exit poverty should be supported to the full extent possible. This clarification will achieve that goal.”

The Western Center on Law and Poverty and the Coalition of California Welfare Rights Organizations, sponsors of this bill, contend that state law should be clarified and updated to ensure – on par with current-law exemptions of other education benefits – the exemption of benefits provided under the Post-9/11 G.I. Bill (such as housing allowances and transfer of tuition benefits to family members) from CalWORKs eligibility and benefits determination, stating that:

“Any veterans’ benefits paid under any law administered by the Department of Veterans Affairs (VA) are exempt from being reported as income to the Internal Revenue Service (IRS). We believe that these benefits, because they have already been earned through service in the armed forces (they were used as an incentive to recruit people) should be exempt from consideration in public benefits as well. Doing so will not only correct the current law and its treatment of this benefit, but also bring added consistency to the program as the implementation of G.I. Bill exemptions has been confusing to counties and uneven throughout the state.

In addition to clarifying how the G.I. Bill benefits are to be treated in CalWORKs, [this bill] also exempts other U.S. Veteran Administration education payments… made to survivor dependents of soldiers who died during service or who are now determined to be 100% disabled. CalWORKs rules currently exclude most educational grants, loans, and scholarships from consideration as income when determining the eligibility and grant amount for CalWORKs. Portions of the grant, loan or scholarship that are used to cover the attendance costs of a student attending school on at least a half-time basis, as defined by the institution is excluded in CalWORKs computations for determining eligibility and calculating the amount of cash aid. Attendance costs are defined as tuition, fees, rental or purchase of required equipment, materials or supplies, books, transportation, dependent care and miscellaneous personal educational expenses.

We believe that it was an oversight to exclude veteran dependent benefits, which are meant to be given to students whose parent or spouse is deceased or 100% disabled and so not able to support the student with payments to the school or help with food or rent (payments that would be exempt).”

Recommended amendments: In order to clarify that the provisions of this bill apply not only to the determination of eligibility for CalWORKs, but also to the calculation of CalWORKs benefit levels, committee staff recommends the following amendments starting on line 10 of page 2 of the bill:

P2    1

SECTION 1.   Section 11250.9 is added to the Welfare and

2

Institutions Code, to read:

3

11250.9.   If an applicant for, or recipient of, benefits pursuant

4

to this chapter is active duty personnel, a veteran, the dependent

5

of a veteran, or the spouse of a veteran who either died in the line

6

of duty or who has a service-connected disability, benefits received

7

for education, training, vocation, or rehabilitation and related

8

allowances through the federal United States Department of

9

Veterans Affairs shall be exempt from consideration as income

10

for purposes of determining eligibility for benefits or calculating grant amounts available

11

income pursuant to this chapter.

PRIOR LEGISLATION:

AB 743 (Eggman), 2015, would have, among other things, exempted from consideration as income or property for purposes of determining CalWORKs eligibility any education, training, vocation, or rehabilitation benefits, and related allowances provided through the U.S. Department of Veterans Affairs to active duty personnel, veterans, or dependents or spouses of those who died in the line of duty or had a service-connected disability. It died in the Senate Appropriations Committee.

AB 1094 (Brown), Chapter 554, Statutes of 2013, expanded the definition of disability-based unearned income to include veteran’s disability compensation for purposes of the income disregard under the CalWORKs program.

REGISTERED SUPPORT / OPPOSITION:

Support

Western Center on Law and Poverty (co-Sponsor)

Coalition of California Welfare Rights Organizations (co-Sponsor)

American Federation of State County and Municipal Employees

California Alternative Payment Program Association

County Welfare Directors Association of California

National Association of Social Workers

Opposition

None on file.

Analysis Prepared by: Daphne Hunt / HUM. S. / (916) 319-2089

 THIRD READING  

Bill No: SB 570

Author:

:

Vote:

SENATE HUMAN SERVICES COMMITTEE: 5-0, 4/25/17

AYES: Wiener, Berryhill, Glazer, Newman, Nguyen

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/25/17

AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener

SUBJECT:

SOURCE: Western Center on Law and Poverty

DIGEST:

This bill exempts benefits and related allowances received through the United States Department of Veterans Affairs for education, training, vocation, or rehabilitation from consideration as income for determining eligibility for California Work Opportunity and Responsibility to Kids (CalWORKs) program benefits for veterans and their relatives, as specified.

ANALYSIS:

Existing federal law:

1. Establishes the federal Temporary Assistance for Needy Families (TANF) program, which permits states to implement the program under a state plan. (42 USC § 601 et seq.)
2. Establishes in federal law several education programs available to military veterans, including post-9/11 educational assistance and a housing stipend, as specified. (38 U.S.C. 3313)

Existing state law:

1. Establishes in state law the CalWORKs program to provide cash assistance and other social services for low-income families through the federal TANF program. Under CalWORKs, each county provides assistance through a combination of state, county and federal TANF funds. (WIC 10530)
2. Establishes CalWORKs 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 percent of the Federal Poverty Level. (WIC 11450, 11150 et seq.)
3. Prohibits a CalWORKs applicant or recipient’s educational expenses from being applied to any educational loans or grants he or she receives that are exempt from consideration as income for purposes of determining CalWORKs eligibility. (WIC 11250.8)
4. Provides that certain income is exempt from the calculation of income for purpose of grant calculation under the CalWORKs program, including specified amounts of disability-based unearned income and earned income and including disability based unearned income provided as veteran’s disability compensation. (WIC 11451.5)

This bill requires that if a CalWORKs applicant or recipient is a veteran, the dependent of a veteran, or the spouse of a veteran who either died in the line of duty or who has a service-connected disability, benefits received for education, training, vocation, or rehabilitation and related allowances through the United States Department of Veterans Affairs shall be exempt from consideration as income for purposes of determining eligibility for CalWORKs benefits or available income.

Background

Per the author, “It would be preferred if GI Bill benefits were enough to keep a veteran family out of poverty, but absent federal support to achieve that goal, we should make sure that state law is as helpful it can be to ensure that California’s veteran parents seeking education so that they can exit poverty should be supported to the full extent possible. This clarification will achieve that goal.”

CalWORKs. CalWORKs, one of the state’s most important anti-poverty programs, provides monthly income assistance and employment-related services aimed at moving children out of poverty and helping families meet basic needs. CalWORKs components include education, employment and training programs. The CalWORKs program is funded with a mix of federal TANF money, state, and county funds. California Department of Social Services (CDSS) is the designated state agency responsibility for program supervision at the state level. The counties are responsible for administering the caseloads at the local level.

In order to be eligible for CalWORKs, families must meet income and asset tests of no more than $2,250 in savings ($3,250 where the assistance unit includes at least one member who is disabled or aged 60 or older), excluding education and retirement plans, plus one car worth less than $9,500 or that was received as a gift or family transfer or donation. In addition, children must be deprived of parental support and care due to the incapacity, death or absence of apparent or unemployment of the principal wage-earner. Persons fleeing to avoid prosecution, custody or confinement after conviction of a felony are not eligible for CalWORKs.

The average monthly cash grant for a family of three on CalWORKs (one parent and two children) in Fiscal Year 2016-17 is estimated at $514, and the maximum monthly grant amount for a family of three, if the family has no other income and lives in a high-cost county, is $714.

GI Bill. According to the California Department of Veterans Affairs, more than 1.8 million veterans live in California. It is anticipated that California will receive an additional 30,000 discharged members of the armed services each year for the next several years – more than any other state. Additionally, more than 190,000 active duty military personnel lived in California as of May 2016, also more than any other state.

The original GI Bill was enacted by Congress to help pave an easy transition for World War II veterans returning home. Although the bill provided a variety of benefits, including down-payments on homes, one of its best-known benefits was to provide tuition payments for servicemen. In 2008, a “Post-9/11 GI Bill” was enacted to provide enhanced educational benefits, money for books and a living allowance to veterans with active duty service on or after September 11, 2001. The bill allows veterans to transfer any unused educational benefits to their spouses or children, with specified allowances.

GI Bill Benefits and CalWORKs. GI benefits can come in the form of cash, services, or direct payments to schools or other entities. If such benefits are not exempted from the CalWORKs eligibility determination and grant calculation they could be viewed as income or “unearned income” which could affect the eligibility and grant amount for CalWORKs applicants and recipients. However, certain types of unearned income can be disregarded, with the effect of increasing a recipient’s grant. Unlike unearned income, exempted income does not need to be reported and does not affect grant computation.

Existing California law exempts G.I. Bill education benefits from calculation in CalWORKs eligibility, but the statute was not updated after the Post-9/11 GI Bill and is silent as to whether housing stipends available for Post-911 GI Bill recipients or education benefits received by survivors are exempt from consideration under the CalWORKs program. According to the sponsor, gaps in program guidance have caused uneven application of the exclusion for CalWORKs determination and calculations for people receiving benefits via the GI bill. For example:

• All tuition and fees for veterans and their families are paid directly to the school.  These benefits are fully exempted (MPP §44-111.435). However, tuition for surviving family members (spouse or child) is treated as unearned income because the benefit is not paid directly to the school.
• A monthly re-occurring housing allowance does not fall under the educational grants exemption (MPP §44-111.435) because the allowance is not applied directly to educational expenses.  The allowance does not meet any other income exclusions or exemptions. Therefore, housing benefits provided under the Post-9/11 GI Bill are counted as unearned income when determining CalWORKs eligibility and benefits. 
• Most educational grants, loans, and scholarships are excluded from consideration as income when determining the eligibility and grant amount for CalWORKs (MPP Section 44-111.43 to 44-111.437). Included in the list of educational loans, grants, and scholarships that are excluded under the CalWORKs rules are those received under Title IV of the Higher Education Act or under the Bureau of Indian Affairs student assistance program, such as Pell Grants. Funds received via the GI bill are not specifically included in the list of loans, grants and scholarships.

Related/Prior Legislation

AB 743 (Eggman, 2015), among other things, proposed to exempt from consideration in determining CalWORKs eligibility and benefits, the education, training, vocation, or rehabilitation benefits provided through the US Department of Veteran Affairs for active duty personnel, veterans, dependents, or spouses, as specified. This bill was held in Senate Appropriations Committee.

AB 1094 (Brown, Chapter 554, Statues of 2013) expanded the definition of disability-based unearned income to include veteran’s disability compensation to help California’s veterans.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee:

• One-time costs to CDSS of about $300,000 for automation changes. (GF)
• Unknown, potentially significant costs to CDSS for an increase in additional grant amounts to accommodate exempted VA benefits. (TANF/GF)
• Potential costs savings to CDSS for a reduction in caseworker time needed to verify required documents from veterans.

SUPPORT: (Verified 5/25/17)

Western Center on Law and Poverty (source)

American Federation of State, County and Municipal Employees

California Alternative Payment Program Association

California Catholic Conference

California Women’s Law Center

Courage Campaign

National Association of Social Workers

OPPOSITION: (Verified 5/25/17)

None received

Prepared by: Taryn Smith / HUMAN S. /

5/30/17 10:32:42

**** END ***

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

SB 570 (Newman) - CalWORKs

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

SB 570 would exempt benefits and related allowances received through the U.S. Department of Veterans Affairs (VA) for education, training, vocation, or rehabilitation from consideration as income for determining eligibility for California Work Opportunity and Responsibility to Kids (CalWORKs) program benefits for active duty personnel, veterans, and their relatives, as specified.

Fiscal Impact:

• One-time costs to the California Department of Social Services (CDSS) of approximately $300,000 for automation changes. (GF)
• Unknown, potentially significant costs to CDSS for an increase in additional grant amounts to accommodate exempted VA benefits. (TANF/GF)
• Potential costs savings to CDSS for a reduction in caseworker time needed to verify required documents from veterans.

Background:

The CalWORKs program, which implements the federal TANF program, is a welfare program that gives cash aid and employment-related services to eligible California families to move them out of poverty and help families meet basic needs. In order to be eligible for CalWORKs, families must meet income and asset tests of no more than $2,250 in savings ($3,250 where the assistance unit includes at least one member who is disabled or aged 60 or older), excluding education and retirement plans, plus one car worth less than $9,500 or that was received as a gift or family transfer or donation. The average monthly cash grant for a family of three on CalWORKs in FY 2016-17 was estimated at $514 and the maximum monthly grant amount for a family of three is $714. According to recent data from CDSS, approximately 485,850 families rely on CalWORKs.

Approximately 113,000 veterans and their families in California receive benefits from the VA. The GI Bill, original enacted in 1944 was established to provide immediate rewards including dedicated payments of tuition and living expenses to attend high school, college or vocational/technical school, low-cost mortgages, low-interest loans to start a business, as well as one year of unemployment compensation for World War II veterans. In 2008, a “Post-9/11 GI Bill” was enacted to provide enhanced educational benefits, money for books, and a living allowance to veterans with active duty service on or after September 11, 2011. The bill also allows veterans to transfer any unused educational benefits to their spouses or children, with specified allowances. One of the best known and most used benefits of the GI Bill is to provide tuition payments for servicemen. Existing law in California exempts GI Bill education benefits from calculation in CalWORKs eligibility, but the statute was not updated after the Post-9/11 GI Bill and is silent as to whether education benefits received by survivors are exempt from consideration under the CalWORKs program.

Proposed Law:

This bill would require that if an applicant for, or recipient of, benefits pursuant to this chapter is a veteran, the dependent of a veteran, or the spouse of a veteran who either died in the line of duty or has a service-connected disability, benefits received for education, training, vocation, or rehabilitation and related allowances through the United States Department of Veterans Affairs shall be exempt from consideration as income for purposes of determining eligibility for benefits or available income for CalWORKs.

Related Legislation:

AB 743 (Eggman, Statutes of 2015) among other things, proposed to exempt from consideration in determining CalWORKs eligibility and benefits, the education, training, vocation, or rehabilitation benefits provided through the VA for active duty personnel, veterans, dependents, or spouses, as specified. This bill was held in the Senate Appropriations Committee.

AB 1094 (Brown, Chapter 554, Statutes of 2013) expanded the definition of disability-based unearned income to include veteran’s disability compensation to help California’s veterans.

Staff Comments:

Though the number of veterans in California and the approximate number of veterans receiving VA benefits in California are known, the number of veterans and their families who receive benefits through CalWORKs is not known. The likely caseload of eligible veterans that would be affected by this bill is therefore difficult to assess.

-- END --

0SENATE COMMITTEE ON HUMAN SERVICES

Senator Wiener, Chair

2017 - 2018 Regular

Bill No: SB 570

Subject: CalWORKs

SUMMARY

This bill would exempt benefits and related allowances received through the federal Department of Veterans Affairs for education, training, vocation, or rehabilitation from consideration as income for determining eligibility for California Work Opportunity and Responsibility to Kids (CalWORKs) program benefits for active duty personnel, veterans and their relatives, as specified.

ABSTRACT

Existing law:

1. Establishes the federal Temporary Assistance for Needy Families (TANF) program, which permits states to implement the program under a state plan. (42 USC § 601 et seq.)
2. Establishes in federal law several education programs available to military veterans, including post-9/11 educational assistance and a housing stipend, as specified. (38 U.S.C. 3313)
3. Establishes in state law the CalWORKs program to provide cash assistance and other social services for low-income families through the federal TANF program. Under CalWORKs, each county provides assistance through a combination of state, county and federal TANF funds. (WIC 10530)
4. Establishes CalWORKs 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 percent of the Federal Poverty Level. (WIC 11450, 11150 et seq.)
5. Prohibits a CalWORKs applicant or recipient’s educational expenses from being applied to any educational loans or grants he or she receives that are exempt from consideration as income for purposes of determining CalWORKs eligibility. (WIC 11250.8)
6. Provides that certain income is exempt from the calculation of income for purpose of grant calculation under the CalWORKs program, including specified amounts of disability-based unearned income and earned income and including disability based unearned income provided as veteran’s disability compensation. (WIC 11451.5)

This bill:

1. Requires that if a CalWORKs applicant or recipient is active duty personnel, a veteran, the dependent of a veteran, or the spouse of a veteran who died in the line of duty or who has a service-connected disability, benefits received for education, training, vocation, or rehabilitation and related allowances through the federal Department of Veterans Affairs shall be exempt from consideration as income for purposes of determining eligibility for CalWORKs benefits or available income.

FISCAL IMPACT

This bill has not been analyzed by a fiscal committee.

BACKGROUND AND DISCUSSION

Purpose of the bill:

Per the author, “It would be preferred if GI Bill benefits were enough to keep a veteran family out of poverty, but absent federal support to achieve that goal, we should make sure that state law is as helpful it can be to ensure that California’s veteran parents seeking education so that they can exit poverty should be supported to the full extent possible. This clarification will achieve that goal.”

CalWORKs

CalWORKs, one of the state’s most important anti-poverty programs, provides monthly income assistance and employment-related services aimed at moving children out of poverty and helping families meet basic needs. CalWORKs components include education, employment and training programs. The CalWORKs program is funded with a mix of federal TANF money, state, and county funds. CDSS is the designated state agency responsibility for program supervision at the state level. The counties are responsible for administering the caseloads at the local level.

In order to be eligible for CalWORKs, families must meet income and asset tests of no more than $2,250 in savings ($3,250 where the assistance unit includes at least one member who is disabled or aged 60 or older), excluding education and retirement plans, plus one car worth less than $9,500 or that was received as a gift or family transfer or donation. In addition, children must be deprived of parental support and care due to the incapacity, death or absence of apparent or unemployment of the principal wage-earner. Persons fleeing to avoid prosecution, custody or confinement after conviction of a felony are not eligible for CalWORKs.

The average monthly cash grant for a family of three on CalWORKs (one parent and two children) in Fiscal Year 2016-17 is estimated at $514, and the maximum monthly grant amount for a family of three, if the family has no other income and lives in a high-cost county, is $714. According to recent data from CDSS, approximately 485,850 families rely on CalWORKs. Nearly 60 percent of cases include children under 6 years old. Two-thirds of CalWORKs cases are headed by a single parent.

GI Bill

According to the California Department of Veterans Affairs, more than 1.8 million veterans live in California. It is anticipated that California will receive an additional 30,000 discharged members of the armed services each year for the next several years – more than any other state. Additionally, more than 190,000 active duty military personnel lived in California as of May 2016, also more than any other state.

The original GI Bill was enacted by Congress to help pave an easy transition for World War II veterans returning home. Although the bill provided a variety of benefits, including down-payments on homes, one of its best-known benefits was to provide tuition payments for servicemen. In 2008, a “Post-9/11 GI Bill” was enacted to provide enhanced educational benefits, money for books and a living allowance to veterans with active duty service on or after September 11, 2001. The bill allows veterans to transfer any unused educational benefits to their spouses or children, with specified allowances.

GI Bill Benefits and CalWORKs

GI benefits can come in the form of cash, services, or direct payments to schools or other entities. If such benefits are not exempted from the CalWORKs eligibility determination and grant calculation they could be viewed as income or “unearned income” which could affect the eligibility and grant amount for CalWORKs applicants and recipients. However, certain types of unearned income can be disregarded, with the effect of increasing a recipient’s grant. Unlike unearned income, exempted income does not need to be reported and does not affect grant computation.

Existing California law exempts G.I. Bill education benefits from calculation in CalWORKs eligibility, but the statute was not updated after the Post-9/11 GI Bill and is silent as to whether housing stipends available for Post-911 GI Bill recipients or education benefits received by survivors are exempt from consideration under the CalWORKs program. According to the sponsor, gaps in program guidance have caused uneven application of the exclusion for CalWORKs determination and calculations for people receiving benefits via the GI bill. For example:

• All tuition and fees for veterans and their families are paid directly to the school.  These benefits are fully exempted (MPP §44-111.435). However, tuition for surviving family members (spouse or child) is treated as unearned income because the benefit is not paid directly to the school.
• A monthly re-occurring housing allowance does not fall under the educational grants exemption (MPP §44-111.435) because the allowance is not applied directly to educational expenses.  The allowance does not meet any other income exclusions or exemptions. Therefore, housing benefits provided under the Post-9/11 GI Bill are counted as unearned income when determining CalWORKs eligibility and benefits. 
• Most educational grants, loans, and scholarships are excluded from consideration as income when determining the eligibility and grant amount for CalWORKs (MPP Section 44-111.43 to 44-111.437). Included in the list of educational loans, grants, and scholarships that are excluded under the CalWORKs rules are those received under Title IV of the Higher Education Act or under the Bureau of Indian Affairs student assistance program, such as Pell Grants. Funds received via the GI bill are not specifically included in the list of loans, grants and scholarships.

Related legislation:

AB 743 (Eggman, Statutes of 2015), among other things, proposed to exempt from consideration in determining CalWORKs eligibility and benefits, the education, training, vocation, or rehabilitation benefits provided through the US Department of Veteran Affairs for active duty personnel, veterans, dependents, or spouses, as specified. This bill was held in Senate Appropriations Committee.

AB 1094 (Brown, Chapter 554, Statues of 2013) expanded the definition of disability-based unearned income to include veteran’s disability compensation to help California’s veterans.

COMMENTS

The following amendments are suggested in order to correct a drafting error and make technical clarification:

If an applicant for, or recipient of, benefits pursuant to this chapter is active duty personnel, a veteran, the dependent of a veteran, or the spouse of a veteran who either died in the line of duty or who has a service-connected disability, benefits received for education, training, vocation, or rehabilitation and related allowances through the federal Department of Veterans Affairs shall be exempt from consideration as income for purposes of determining eligibility for benefits or available income pursuant to this chapter.

POSITIONS

Support:

Western Center on Law and Poverty (Sponsor)

California Alternative Payment Program Association

National Association of Social Workers

The American Federation of State County and Municipal Employees

Oppose:

None.

-- END –