Existing law provides for various public social services programs, including, among others, 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 and individuals, and CalFresh, under which supplemental nutrition assistance benefits allocated to the state by the federal government are distributed to eligible individuals by each county.

Existing law establishes criminal penalties for welfare fraud, defined as willfully and knowingly, with the intent to deceive, by specified means, including a false statement or representation, obtaining or retaining aid through designated public social services for oneself or for a child who is not in fact entitled thereto, as specified. Existing law makes any person who knowingly uses, transfers, sells, purchases, or possesses CalFresh or federal Supplemental Nutrition Assistance Program benefits in any manner not authorized, as specified, guilty of a misdemeanor or felony depending on the face value of the benefits.

This bill would delete the provision that establishes criminal penalties for an attempt to commit welfare fraud. The bill would delete criminal penalties for welfare fraud when the total amount of aid obtained or retained is above or below $950, and instead make welfare fraud when aid was obtained or retained in the total amount of $25,000 or more punishable by specified imprisonment in a county jail, by a fine, or by imprisonment and fine. The bill would require a county human services agency to determine whether benefits were authorized as a result of an error in the Statewide Automated Welfare System (CalSAWS) and prohibit the agency from referring a case for criminal action if benefits were authorized in error. The bill would prohibit a person from being subject to criminal prosecution under these provisions for an overpayment or overissuance of benefits obtained under various public social services programs, including CalWORKs and CalFresh, under certain conditions, including that the person is in repayment status or grant or benefit reduction status. The bill would prohibit a person from being subject to criminal prosecution or an administrative finding of intentional program violation under these provisions for an overpayment or overissuance of benefits obtained under various specified public social services programs for any month in which the county human services agency was in receipt of any Income and Eligibility Verification System (IEVS) data match information indicating any potential for an overpayment or an overissuance and for which the agency has not provided the person a timely and adequate notice of action for the collection of the overpayment or overissuance. The bill would prohibit a person from being subject to criminal prosecution or an administrative finding of intentional program violation for overpayment or overissuance of benefits under various specified public social services programs for any month the county human services agency was in receipt of any New Hire Registry (NHR) data match information, as specified, indicating any potential for an overpayment or overissuance and the county human services agency did not provide the person a timely and adequate reminder to report income, as specified.

Existing law authorizes current and future grants payable to an assistance unit to be reduced due to prior overpayments. In cases in which the overpayment was caused by an agency error, existing law requires grant payments to be reduced by 5% of the maximum aid payment of the assistance unit. Prior to effectuating any reduction of current grants to recover past overpayments, existing law requires the recipient to be advised of the proposed reduction and of their entitlement to a hearing. Existing law prohibits a civil or criminal action from being commenced based on alleged unlawful application for or receipt of public social services if the case record or any consumer credit report used in the case has not been made available to that person or has been destroyed, as specified.

This bill would provide that a person or household for whom their grant has or may be reduced under these provisions is only subject to administrative remedies available for responding to an overpayment. The bill would require a recipients case file to be reviewed by a qualified caseworker to identify any errors in determining the overpayment prior to advising the recipient of the proposed reduction. If it is determined during that review that an overpayment was not made, the bill would prohibit subsequent recovery efforts. The bill would also prohibit a civil or criminal action against a recipient if their case file was reviewed by qualified caseworker and it is determined that an overissuance was not made. The bill would provide that an overpayment determined to be an administrative error shall only be collected administratively by the county.

Commencing on July 1, 2022, or on the date the Department of Social Services notifies the Legislature that a specified event has occurred, whichever date is later, existing law requires a county to only establish an overpayment if the overpayment occurred within 24 months prior to the county discovering the payment. Existing law also prohibits a county from collecting any portion of a nonfraudulent payment that occurred more than 24 months prior to the date the county discovered an overpayment.

This bill would also prohibit a county from taking any other action related to a nonfraudulent overpayment that occurred more than 24 months prior to discovery of the overpayment.

Existing law requires current and future CalFresh benefits to be reduced, as specified, to recover a benefit overissuance caused by inadvertent household error or administrative error. Existing law, beginning on July 1, 2022, or on the date the department notifies the Legislature that a specified event has occurred, whichever date is later, limits the period in which a county may establish a claim to recover an overissuance of CalFresh benefits due to inadvertent household error or administrative error to the 24 months preceding the month the county welfare department determined the overissuance occurred.

The bill would require a recipients case file to be reviewed by a qualified caseworker to identify any errors in determining the overpayment prior to establishing a claim to recover an overissuance. If it is determined during that review that an overissuance was not made, the bill would prohibit any subsequent recovery effort. The bill would require a claim established under these provisions to only be pursued through the applicable administrative process provided by federal law or pursuant to specified procedures prescribed by state law.

By expanding county duties relating to the administration of benefits, this bill 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 provides for various public social services programs, including, among others, 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 and individuals, and CalFresh, under which supplemental nutrition assistance benefits allocated to the state by the federal government are distributed to eligible individuals by each county.

Existing law establishes criminal penalties for welfare fraud, defined as willfully and knowingly, with the intent to deceive, by specified means, including a false statement or representation, obtaining or retaining aid through designated public social services for oneself or for a child who is not in fact entitled thereto, as specified. Existing law makes any person who knowingly uses, transfers, sells, purchases, or possesses CalFresh or federal Supplemental Nutrition Assistance Program benefits in any manner not authorized, as specified, guilty of a misdemeanor or felony depending on the face value of the benefits.

This bill would delete the provision that establishes criminal penalties for an attempt to commit welfare fraud. The bill would delete criminal penalties for welfare fraud when the total amount of aid obtained or retained is above or below $950, and instead make welfare fraud when aid was obtained or retained in the total amount of $25,000 or more punishable by specified imprisonment in a county jail, by a fine, or by imprisonment and fine. The bill would require a county human services agency to determine whether benefits were authorized as a result of an error in the Statewide Automated Welfare System (CalSAWS) and prohibit the agency from referring a case for criminal action if benefits were authorized in error. The bill would prohibit a person from being subject to criminal prosecution under these provisions for an overpayment or overissuance of benefits obtained under various public social services programs, including CalWORKs and CalFresh, under certain conditions, including that the person is in repayment status or grant or benefit reduction status.

Existing law authorizes current and future grants payable to an assistance unit to be reduced due to prior overpayments. In cases in which the overpayment was caused by an agency error, existing law requires grant payments to be reduced by 5% of the maximum aid payment of the assistance unit. Prior to effectuating any reduction of current grants to recover past overpayments, existing law requires the recipient to be advised of the proposed reduction and of their entitlement to a hearing. Existing law prohibits a civil or criminal action from being commenced based on alleged unlawful application for or receipt of public social services if the case record or any consumer credit report used in the case has not been made available to that person or has been destroyed, as specified.

This bill would provide that a person or household for whom their grant has or may be reduced under these provisions is only subject to administrative remedies available for responding to an overpayment. The bill would require a recipients case file to be reviewed by a qualified caseworker to identify any errors in determining the overpayment prior to advising the recipient of the proposed reduction. If it is determined during that review that an overpayment was not made, the bill would prohibit subsequent recovery efforts. The bill would also prohibit a civil or criminal action against a recipient if their case file was reviewed by qualified caseworker and it is determined that an overissuance was not made. The bill would provide that an overpayment determined to be an administrative error shall only be collected administratively by the county.

Commencing on July 1, 2022, or on the date the Department of Social Services notifies the Legislature that a specified event has occurred, whichever date is later, existing law requires a county to only establish an overpayment if the overpayment occurred within 24 months prior to the county discovering the payment. Existing law also prohibits a county from collecting any portion of a nonfraudulent payment that occurred more than 24 months prior to the date the county discovered an overpayment.

This bill would also prohibit a county from taking any other action related to a nonfraudulent overpayment that occurred more than 24 months prior to discovery of the overpayment.

Existing law requires current and future CalFresh benefits to be reduced, as specified, to recover a benefit overissuance caused by inadvertent household error or administrative error. Existing law, beginning on July 1, 2022, or on the date the department notifies the Legislature that a specified event has occurred, whichever date is later, limits the period in which a county may establish a claim to recover an overissuance of CalFresh benefits due to inadvertent household error or administrative error to the 24 months preceding the month the county welfare department determined the overissuance occurred.

The bill would require a recipients case file to be reviewed by a qualified caseworker to identify any errors in determining the overpayment prior to establishing a claim to recover an overissuance. If it is determined during that review that an overissuance was not made, the bill would prohibit any subsequent recovery effort. The bill would require a claim established under these provisions to only be pursued through the applicable administrative process provided by federal law or pursuant to specified procedures prescribed by state law.

By expanding county duties relating to the administration of benefits, this bill 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.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

SB 560 (Smallwood-Cuevas) - Public social services

Bill Summary:

SB 560 would make changes to penalties for welfare fraud, as specified.

Fiscal Impact:

• The California Department of Social Services (CDSS) anticipates increased county administration costs due to the number of CalFresh and CalWORKs cases suspected of fraud that were previously referred for criminal prosecution but would now be referred for an Administrative Disqualification Hearing and cases each year that would require additional administrative reviews. As such, CDSS estimates the bill would result in ongoing local assistance costs of $17.8 million for CalFresh and $3.3 million for CalWORKs (General Fund and federal funds, if available). Cost to counties for administration would be potentially reimbursable by the state, subject to a determination by the Commission on State Mandates.
• The CDSS estimates ongoing General Fund costs for state operations due to increased workload for the department’s State Hearings Division. Specifically, CDSS anticipates the need for 8.0 additional Administrative Law Judges (ALJs) and 3.0 additional Associate Governmental Program Analysts (AGPAs). While cost estimates were not available at this time, costs would likely range in the low millions of dollars.
• Although courts are not funded on the basis of workload, fewer criminal complaints related to these welfare fraud cases would to some extent free up calendar space for other hearings.

Background:

California Work Opportunity and Responsibility to Kids (CalWORKs). CalWORKs provides temporary cash assistance aimed at moving children out of poverty and helping qualified low-income families meet their basic needs, such as rent, clothing, utility bills, food, and other items needed to ensure children are cared for at home and safely remain with their families. Current law establishes criminal penalties for welfare fraud, as specified. Among these provisions, current law requires that any person who, willfully and knowingly, with the intent to deceive, makes a false statement or representation or knowingly fails to disclose a material fact in order to obtain aid or who, knowing he or she is not entitled, attempts to obtain aid or to continue to receive aid to which he or she is not entitled, or to receive a larger amount than that to which he or she is legally entitled, is guilty of a misdemeanor, punishable by imprisonment in a county jail for a period of not more than six months, by a fine of not more than $500, or by both imprisonment and fine.

Whenever any person has, willfully and knowingly, with the intent to deceive, by means of false statement or representation, or by failing to disclose a material fact, or by impersonation or other fraudulent device, obtained or retained aid for himself or herself or for a child not in fact entitled, the person must be punished as follows:

• If the total amount of the aid obtained or retained is $950 or less, as a misdemeanor, by imprisonment in a county jail for a period of not more than six months, by a fine of not more than five $500, or by both imprisonment and fine.
• If the total amount of the aid obtained or retained is more than nine hundred $950, as a felony, by imprisonment, as specified, for a period of 16 months, two years, or three years, by a fine of not more than $5,000, or by both that imprisonment and fine; or by imprisonment in a county jail for a period of not more than one year, by a fine of not more than one $1,000, or by both imprisonment and fine.

Current law authorizes current and future CalWORKs grants to be reduced due to prior overpayments, as specified. Prior to effectuating any reduction of current grants to recover past overpayments, the recipient must be advised of the proposed reduction and of the recipient’s entitlement to a hearing on the propriety of the reduction. Except in cases involving overpayments due to fraud, a county can only establish an overpayment if the overpayment occurred within 24 months prior to the county discovering the payment. Current law prohibits a county from collecting any portion of a nonfraudulent payment that occurred more than 24 months prior to the date the county discovered an overpayment. Current law also prohibits a civil or criminal action from being commenced against any person based on alleged unlawful application if the case record, or any consumer credit report used in the civil or criminal case of that person for the purpose of determining that the overpayment, has not been made available to that person or has been destroyed after the expiration of the three-year retention period, as specified.

CalFresh. CalFresh is California’s version of the federal Supplemental Nutrition Assistance Program (SNAP), an entitlement program that provides eligible households with federally funded monthly benefits to purchase food. Current law makes any person who knowingly uses, transfers, sells, purchases, or possesses CalFresh or federal SNAP benefits in any manner not authorized, as specified, guilty of a misdemeanor or felony depending on the face value of the benefits. A county must establish a claim to recover an overissuance of CalFresh benefits due to inadvertent household or administrative error for which 24 months or fewer have elapsed between the month the overissuance occurred and the month the county welfare department determined the overissuance occurred.

Proposed Law:

Specific provisions of the bill would:

• Delete the provision that any person who, willfully and knowingly, with the intent to deceive, makes a false statement or representation or knowingly fails to disclose a material fact in order to obtain CalWORKs aid or who, knowing he or she is not entitled, attempts to obtain aid or to continue to receive aid to which he or she is not entitled, or to receive a larger amount than that to which he or she is legally entitled, is guilty of a misdemeanor, as specified.
• Revise the current thresholds and penalties for CalWORKs aid punishment, and instead require that whenever any person has, willfully and knowingly, with the intent to deceive, by means of false statement or representation, or by failing to disclose a material fact, or by impersonation or other fraudulent device, obtained or retained aid in the total amount of $25,000 or more for themselves or for a child not in fact entitled, the person obtaining this aid must be punished by imprisonment, as a felony, as specified, for a period of 16 months, two years, or three years, by a fine of not more than $5,000, or by both that imprisonment and fine; or by imprisonment in a county jail for a period of not more than one year, by a fine of not more than one thousand dollars $1,000, or by both imprisonment and fine.
• Require that prior to commencing a criminal action for a misdemeanor or felony under CalFresh, as specified under existing law, a county human services agency must determine whether benefits were authorized as a result of an error in the Statewide Automated Welfare System (CalSAWS); and prohibit, if benefits were authorized as a result of an error in the CalSAWS, the county human services agency from referring the case for criminal action.
• Prohibit a person from being subjected to an administrative finding of intentional program violation, as specified, for an overpayment or overissuance of CalWORKs or CalFresh benefits, for any month in which the county human services agency was in receipt of any Income and Eligibility Verification System (IEVS) data match information indicating any potential for an overpayment or an overissuance and for which the county human services agency has not provided to the person a timely and adequate notice of action for the collection of the overpayment or the overissuance.
• Prohibit a person from being subjected to criminal prosecution for an overpayment or overissuance of benefits obtained under the following programs, except as provided:
  • A county’s general assistance program
  • CalWORKs
  • CalFresh
  • California Food Assistance Program for Legal Immigrants
  • Cash Assistance Program for Aged, Blind, and Disabled Legal Immigrants
  • Refugee Cash Assistance
  • Trafficking and Crime Victim Assistance Program
  • In-Home Supportive Services
• Prohibit a person from being additionally charged with perjury based solely on any statement made to a county welfare department, if they are subject to a criminal prosecution for overpayment or overissuance, as specified.
• Prohibit a person from being subjected to criminal prosecution or an administrative finding of intentional program violation, as specified, for an overpayment or overissuance of benefits, obtained under the CalWORKs program or the CalFresh program, for any month in which the county human services agency was in receipt of any New Hire Registry (NHR) data match information indicating any potential for an overpayment or an overissuance and for which the county human services agency has not provided to the person a timely and adequate reminder to report income.
• Prohibit a person from being subject to criminal prosecution, as specified, for an overpayment or overissuance of benefits obtained under a county’s general assistance program, the CalWORKs program or the CalFresh program, or the federal SNAP if either of the following apply:
  • If the county has obtained a finding of intentional program violation, as defined, through court or administrative proceedings.
  • That person is in repayment status or grant or benefit reduction status.
• Require that a person or household for whom their CalWORKs grant has or may be reduced due to prior overpayments can only be subject to administrative remedies available for responding to an overpayment and no other actions can be taken.
• Revise the circumstances under which a county may establish a CalWORKs overpayment, as specified; prohibit a civil or criminal action from being commenced against any person based on alleged unlawful application for or receipt of public social services if the recipient’s case file was reviewed by a caseworker qualified to make a determination of aid to identify any errors in determining the overissuance and it was determined, during this review, that an overissuance was not made; and provide that an overpayment determined to be an administrative error can only be collected administratively by the county.
• Require that prior to advising a CalWORKs recipient of a proposed reduction in current grants to recover past overpayments and before effectuating a reduction, the recipient’s case file must be reviewed by a caseworker qualified to make a determination of aid to identify any errors in determining the overpayment; require that during this review, if it is determined that an overpayment was not made, then subsequent recovery efforts cannot be pursued; and provide that the review may include a consultation with the recipient or their authorized representative if necessary to correct an error in the overpayment determination.
• Require that prior to establishing a claim to recover past CalFresh overissuance due to household error or administrative error, the recipient’s case file must be reviewed by a caseworker qualified to make a determination of aid to identify any errors in determining the overissuance; require that if it is determined that an overissuance was not made then subsequent recovery efforts cannot be pursued; permit a consultation with the recipient or their authorized representative if necessary to correct an error in the overpayment determination; and require that a claim established can under these provisions can only be pursued through the applicable administrative process, as specified, and no other action related to the claim to recover an overissuance can be taken once this process has been initiated.

-- END --

SENATE COMMITTEE ON PUBLIC SAFETY

Senator Jesse Arreguín, Chair

2025 - 2026 Regular

Bill No: SB 560 Hearing Date: April 22, 2025

Subject: Public social services

HISTORY

Source: Coalition of California Welfare Rights Organizations (Sponsor)

California State Council of Service Employees International Union (SEIU California (Co-Sponsor)

Prior Legislation: SB 360 (Skinner), Ch. 390, Stats. of 2017

Support: ACLU California Action; All of Us or None; Alliance of Californians for Community Empowerment; Asian Americans Advancing Justice Southern California; California Association of Food Banks; California Coalition for Women Prisoners; California National Organization for Women; California Native Vote Project; Californians for Safety and Justice; California United for A Responsible Budget; Center on Juvenile and Criminal Justice; Child Care Law Center; County of Mendocino; Courage California; Ella Baker Center for Human Rights; Empowering Impacted Women by Incarceration; Equal Rights Advocates; Grace Institute-End Child Poverty in CA; Initiate Justice; Initiate Justice Action; Legal Services for Prisoners With Children; Legal Service of Northern California; Neighborhood Legal Services of Los Angeles County; Parent Voices California; Project SPARC; Prosecutors Alliance Action; Rubicon Programs; Second Harvest Food Bank of Orange County; Smart Justice California

Opposition: California District Attorneys Association; California Welfare Fraud Investigators Association; San Bernardino County Sheriff’s Department; United Council on Welfare Fraud; 3 Individuals

PURPOSE

The purpose of this bill is to address public assistance (also referred to as Welfare) fraud through the administrative process when based on a false statement or representation or by failing to disclose a material fact which results in retained or obtained aid under $25,000.

Existing law establishes the federal Temporary Assistance for Needy Families (TANF) program, which provides block grants to states to develop and implement their own state welfare-to-work programs designed to provide cash assistance and other supports and services to low-income families. (42 U.S.C. 601 et seq.)

Existing law establishes the California Work Opportunity and Responsibility to Kids (CalWORKs) program to provide cash assistance and other social services for low-income families through the federal Temporary Assistance for Needy Families (TANF) program. (Welf. & Inst. Code, § 11200 et seq.)

Existing law establishes income, asset, and real property limits used to determine eligibility for the CalWORKs program, including net income below the Maximum Aid Payment (MAP), based on family size and county of residence. (Welf. & Inst. Code, §§ 11150 to 11160, 11450 et seq.)

Existing law establishes, under federal law, the Supplemental Nutrition Assistance Program (SNAP) pursuant to the Food Stamp Act of 1964 and establishes, in California statute, the CalFresh program to administer the provision of federal SNAP benefits to families and individuals meeting certain criteria, as specified. (Welf. & Inst. Code, § 18900 et seq.)

Existing law establishes the Electronic Benefits Transfer (EBT) Act, and defines the EBT system as the program designed to provide benefits to those eligible to receive public assistance benefits such as CalWORKs and CalFresh. (Welf. & Inst. Code, § 10065 et seq.)

Existing law provides that an individual who, willfully and knowingly, with the intent to deceive, makes a false statement or representation or knowingly fails to disclose a material fact to obtain public benefits aid or who knowingly attempts to obtain aid to which they are not entitled, attempts to obtain aid or to continue to receive aid to which they are not entitled, or to receive a larger amount than that to which they are legally entitled, is guilty of a misdemeanor, punishable by imprisonment in the county jail for a period of not more than six months, by a fine of not more than $500, or by both imprisonment and fine. (Welf. & Inst. Code, § 10980, subd. (a).)

This bill decriminalizes this conduct where no aid is obtained.

Existing law provides that an individual who knowingly makes more than one application for public benefits aid with the intent of establishing multiple entitlements for any person for the same period or who makes an application for that aid for a fictitious or nonexistent person or by claiming a false identity for any person is guilty of a felony, punishable by imprisonment in the county jail for a period of 16 months, two years, or three years, by a fine of not more than $5,000, or by both that imprisonment and fine, or a misdemeanor punishable by imprisonment in the county jail for a period of not more than one year, or by a fine of not more than $1,000, or by both imprisonment and fine. (Welf. & Inst. Code, § 10980, subd. (b).)

Existing law provides that whenever an individual willfully and knowingly, with the intent to deceive, obtains or retains public benefits aid for themselves or a for a child not entitled to the aid by making a false statement or representation, or by failing to disclose a material fact, or by impersonation or other fraudulent device, shall be punished as follows:

• If the total amount of the aid obtained or retained is $950 or less, as a misdemeanor, by imprisonment in the county jail for a period of not more than six months, by a fine of not more than $500, or by both imprisonment and fine; or,
• If the total amount of the aid obtained or retained is more than $950, as a felony by imprisonment in the county jail for a period of 16 months, two years, or three years, by a fine of not more than $5,000, or by both that imprisonment and fine; or by imprisonment in the county jail for a period of not more than one year, by a fine of not more than $1,000, or by both imprisonment and fine. (Welf. & Inst. Code, § 10980, subd. (c).)

This bill increases the threshold amount from more than $950 to $25,000 or more for criminal prosecution of the aforementioned offense as a felony and deletes the misdemeanor penalty.

Existing law provides that a person is guilty of perjury if they make a false material statement while under oath. (Pen. Code, § 118.)

Existing law make perjury punishable by imprisonment in the county jail for two years, three years, or four years. (Pen. Code, § 126.)

Existing law provides that an individual who knowingly uses, transfers, acquires, or possesses blank authorizations to participate in the federal SNAP in any manner not authorized, as specified, and with the intent to defraud is guilty of a felony, punishable by imprisonment in the county jail for 16 months, two years, or three years, by a fine of not more than five thousand dollars ($5,000), or by both that imprisonment and fine. (Welf. & Inst. Code, § 10980, subd. (d).)

This bill changes “blank authorizations to participate in” to “an electronic benefit transfer (EBT) card issued under” the federal SNAP.

Existing law provides that an individual who counterfeits or alters or knowingly uses, transfers, acquires, or possesses counterfeited or altered authorizations to participate in the federal SNAP or to receive CalFresh benefits or electronically transferred benefits in any manner not authorized, as specified, is guilty of forgery. (Welf. & Inst. Code, § 10980, subd. (e).)

Existing law makes forgery punishable by imprisonment in the county fail for not more than one year or as a felony by imprisonment in the county jail for 16 months, two years, or three years. (Pen. Code, § 473, subd. (a).)

This bill makes technical change from “authorizations” to “EBT card.

This bill changes “to participate” to “with the intent” to participate.

Existing law provides that an individual who fraudulently appropriates CalFresh benefits, electronically transferred benefits, or authorizations to participate in the federal SNAP when entrusted pursuant to their duties as a public employee is guilty of embezzlement of public funds. (Welf. & Inst. Code, § 10980, subds. (f).)

This bill makes technical change from “electronically transferred benefits, or authorizations to participate in” to “an EBT card issued under” the federal SNAP.

Existing law provides that any person who knowingly uses, transfers, sells, purchases, or possesses CalFresh benefits, electronically transferred benefits, or authorizations to participate in the federal SNAP in any manner not authorized, as specified, is guilty of the following:

• A misdemeanor if the face value of the benefits or the authorizations to participate is $950 or less and makes the offense punishable by imprisonment in a county jail for a period of not more than six months, by a fine of not more than $500, or by both imprisonment and fine; or,
• A felony if the face value of the CalFresh benefits or the authorizations to participate exceeds $950, and shall be punished by imprisonment in the county jail for 16 months, two years, or three years, by a fine of not more than $5,000, or by both that imprisonment and fine, or by imprisonment in a county jail for not more than one year, or by a fine of not more than $1,000, or by both imprisonment and fine. (Welf. & Inst. Code, § 10980, subds. (g).)

This bill makes technical change from “electronically transferred benefits, or authorizations to participate in” to “an EBT card issued under” the federal SNAP.

This bill prohibits a county human services agency from referring a case regarding unauthorized use, transfer, sale, purchase, or possession of CalFresh benefits for criminal action if it is determined to have been an error in the Statewide Automated Welfare System (CalSAWS).

Existing law establishes enhanced penalties for embezzlement of public funds and unauthorized use, transfer, sale, purchase, or possession of Calfresh benefits based on the value of the benefits where the violation is committed by an electronic transfer of benefits and provides for aggregation of multiple offenses. (Welf. & Inst. Code, § 10980, subd. (h).)

Existing law exempts an individual from criminal prosecution for overpayment or overissuance of CalWORKs or CalFresh benefits for any month in which the county human services agency was in receipt of Income and Eligibility Verification (IEVS) data match information indicating any potential for overpayment or overissuance but timely and adequate notice, as specified, was not provided to the individual to report income. (Welf. & Inst. Code, § 10980, subd. (j)(i)(1).)

This bill also exempts the aforementioned individual from an administrative finding of an intentional program violation.

Existing law specifies that a county human services agency is deemed to be in receipt of IEVS data match information indicating any potential for an overpayment or overissuance following 45 days, or 45 days plus any authorized delay, as specified, from the date the county human services agency possesses that information. (Welf. & Inst. Code, § 10980, subd. (j)(i)(2).)

This bill similarly exempts a person from criminal prosecution or an administrative finding of an intentional program violation for an overpayment or overissuance of benefits, obtained under the CalWORKs program or the CalFresh program, for any month in which the county human services agency was in receipt of any New Hire Registry (NHR) data match information indicating any potential for an overpayment or an overissuance but had not provided a timely and adequate notice, as specified, to the individual to report income.

This bill provides that notwithstanding any other law, an individual shall not be subject to criminal prosecution for an overpayment or overissuance of benefits under the following programs, except as specified in this section and as required by federal law: a county’s general assistance program; the CalWORKs program; the CalFresh program; California Food Assistance Program for Legal Immigrants; Cash Assistance Program for Aged, Blind, and Disabled Legal Immigrants (CAPI); Refugee Cash Assistance; Trafficking and Crime Victim Assistance Program; and In-Home Supportive Services (IHSS).

This bill prohibits a person from being charged with perjury also based solely on a statement made to a county welfare department, if the individual is subject to prosecution for overpayment or overissuance pursuant to these provisions.

This bill prohibits criminal prosecution of an individual for an overpayment or overissuance of benefits obtained under a county’s general assistance program, the CalWORKs program or the CalFresh program, or the federal SNAP if either of the following apply:

• If the county has obtained a finding of intentional program violation through court or administrative proceedings; or,
• That person is in repayment status or grant or benefit reduction status.
  

Existing law requires that an applicant for, or recipient or payee of, public social services be informed of the provisions of eligibility and the responsibility to report facts material to a correct determination of eligibility and grant. (Welf. & Inst. Code, § 11004, subd. (a).)

Existing law states that an applicant for, or recipient or payee of, public social services is responsible for accurately and completely reporting within their competence facts material to a correct determination of eligibility and grant and to promptly report any changes in those facts. (Welf. & Inst. Code, § 11004, subd. (b).)

Existing law provides that current and future grants may be reduced because of prior overpayments. (Welf. & Inst. Code, § 11004, subd. (c).)

This bill provides that if a grant has been reduced because of overpayment, only administrative remedies shall be used to respond to the overpayment and no other actions shall be taken.

Existing law provides that where the individual responsible for the overpayment is no longer receiving aid, and the case involves fraud, every effort shall be made to collect the overpayments regardless of the amount. (Welf. & Inst. Code, § 11004, subd. (g)(1).)

Existing law prohibits civil or criminal action against any person based on alleged unlawful application for or receipt of public social services if the case record, or consumer credit report used in the civil or criminal case of that person for the purpose of determining that the overpayment has not been made available to that person or has been destroyed after the expiration of the three-year retention period, as specified. (Welf. & Inst. Code, § 11004, subd. (j).)

This bill makes the prohibition applicable where the recipient’s case file was reviewed by a caseworker qualified to make a determination of aid, as specified, to identify any errors in determining the overissuance and it was determined, during the review, that an overissuance was not made.

This bill states that an overpayment determined to be an administrative error shall be collected administratively by the county only.

This bill provides that a claim to recover an overissuance of CalFresh benefits due to inadvertent household error, as defined, or administrative error, as specified, shall be pursued through the applicable administrative process, as specified. Once the process is initiated, no other action shall be taken.

COMMENTS

1. Need for This Bill

According to the author:

SB 560 creates a fair process for families who need access to public benefits. The bill empowers counties to address public benefit overpayments through the administrative process when appropriate. By updating the law so simple overpayment cases are processed through the administrative penalty system, county workers will be equipped to support recipients in maintaining accurate reporting paperwork. This will reduce overpayments and will improve the likelihood that benefits will be repaid to the State when appropriate, all without traumatizing and destabilizing vulnerable families. Relying more on the administrative process will reduce overpayments, make it safer for families to access essential support, preserve court resources for the most serious cases, and enhance our ability to recoup lost funds.

1. Background: California’s Public Assistance Programs (Welfare) and Fraud
   

California’s social safety net programs, including CalFresh, are important tools for fighting poverty. These safety net programs serve millions of Californians who would otherwise live in poverty. (https://www.ppic.org/publication/poverty-in-california/ [as of April 8, 2025].)

Fraud by a recipient of benefits occurs in an exceedingly small number of cases. As explained by Kimberly Brauer, Section Chief for the California Department of Social Services Data Stewardship and Integrity Bureau, people having their benefits stolen from them is more common. [A 2023] analysis of data from the California Department of Social Services shows that theft from cash aid recipients’ Electronic Benefts Transfer cards has increased since the start of the COVID-19 pandemic and … amount[ed] to $10 million a month in losses compared to $2 million a month” the preceding year.

Although prosecutions for welfare fraud make up a relatively small part of California’s criminal justice system, they have significant consequences for the thousands of people who enter the system because of an accusation that they committed fraud.

Over a 10-year span from 2012–2021, there were approximately 24,000 arrests and 11,000 convictions for welfare fraud in California. While most convictions in recent years are for misdemeanors, felony convictions are available if the amount of excess benefits received is at least $950. The vast majority (80%) of people convicted for welfare fraud during this time period do not have any prior convictions….

(https://clrc.ca.gov/CRPC/Pub/Reports/CRPC_AR2023.pdf [as of April 11, 2025, footnotes omitted].)

Further, data shows race and gender disparities when it comes to welfare fraud with 75% of arrests and convictions being of women. Black and Hispanic women comprise over 50% of all arrests and convictions. (https://clrc.ca.gov/CRPC/Pub/Reports/CRPC_AR2023.pdf, supra.)

Under federal law, states have discretion to handle cases of suspected welfare fraud through criminal or administrative proceedings. (7 Code of Federal Regulations § 273.16(a); 42 USC § 602 (a)(6).) The administrative process carries significant consequences. For example, findings of fraud can result in excess benefits having to be repaid, benefits being suspended, or a lifetime ban on receiving assistance. (https://clrc.ca.gov/CRPC/Pub/Reports/CRPC_AR2023.pdf, supra; see also California Department of Social Services Manual of Policies and Procedures §§ 20-300.3, 20-353.)

A criminal conviction can have even more serious consequences, however. In addition to repaying benefits or having benefits suspended, a criminal conviction can result in incarceration and family separation, as well as loss of housing and employment. (https://clrc.ca.gov/CRPC/Pub/Reports/CRPC_AR2023.pdf, supra.)

Moreover, according to the Immigrant Legal Resource Center (ILRC), allegations of welfare fraud disproportionately impact low-income immigrants and a conviction can have devastating consequences. A welfare fraud conviction can lead to possible inadmissibility, deportability or ineligibility for immigration benefits and relief from removal. (file:///C:/Users/anderscr/Downloads/10 23%20defending%20welfare%20fraud%20allegations%20(3).pdf [as of April 11, 2025].)

These allegations and criminal charges impacting noncitizens “are actually more often than not based on benefit caseworker errors, misunderstandings, and miscommunications, including language and literacy barriers, confusing and conflicting benefits program rules, and stem from historically engrained racist and unsubstantiated assumptions about benefits recipients as ‘welfare queens.’” (https://www.ilrc.org/resources/no-crime-be-poor-defending-welfare-fraud-allegations-criminal-administrative-and [as of April 11, 2025].)

“Based on the premise that public benefits recipients are inherently untrustworthy and must be punished and coerced into compliance, the programs are rife with reporting and verification requirements more complicated than many Americans’ annual tax filings, and yet most public benefits recipients are trying to navigate these rules on their own with little to no support from the programs designed to help them.” (file:///C:/Users/anderscr/Downloads/10-23%20defending%20welfare%20fraud%20allegations%20(3).pdf, supra.) Out of 164 million individual U.S. tax returns filed in 2020, only 370 individuals were sentenced for tax fraud the following year. On the other hand, out of about 80,000 adults on the CalWorks program, 682 were penalized for welfare fraud either through the administrative or criminal process. (Ibid.)

It is noteworthy that in contrast to the current $950 threshold for felony welfare fraud, several felony tax fraud offenses have a $25,000 threshold. (See Rev. & Tax Code §§ 7153.5, 9354.5, 30480, 40187, 41143.4, 60707.) While criminal liability for welfare fraud based on a false statement or representation or material omission does require an intent to deceive, all but one of the noted felony tax fraud offenses similarly require an intent to evade. (Rev. & Tax Code §§ 7153.5, 9354.5, 30480, 40187, 41143.4; Welf. & Inst. Code, § 10980, subd. (a).)

Additionally, it varies from county to county as to whether a welfare fraud case will be prosecuted, as well as at what threshold amount. (https://clrc.ca.gov/CRPC/Pub/Reports/CRPC_AR2023.pdf, supra.)

1. Committee on Revision of the Penal Code

The Committee on Revision of the Penal Code (Committee) was created on January 1, 2020. The Committee was tasked with studying the California Penal Code and make statutory reform recommendations to achieve the following improvements: simplify and rationalize the substance of criminal law; simplify and rationalize criminal procedures; establish alternatives to incarceration that will aid in the rehabilitation of offenders; and improve the system of parole and probation. The Committee releases an annual report to the legislature which describes their yearly recommendations.

In 2023, the Committee held four public meetings focused on the current criminal justice system. The Committee’s considerations included prosecutorial discretion, the majority of convictions bein

g obtained through guilty pleas, and how welfare fraud treatment varies from county to county. At these hearings, forty witnesses informed the Committee about the current system and practices and provided empirical research on how the system is functioning. Committee staff also consulted with other stakeholders, practitioners, and persons directly impacted by the system. The Committee’s 2023 Annual Report, cited to in the preceding section of this analysis, discusses the Committee’s findings. Based on these findings, the Committee’s annual report recommends, as relevant here, focusing welfare fraud prosecution on the most serious cases. As reflected in the Committee’s report (https://clrc.ca.gov/CRPC/Pub/Reports/CRPC_AR2023.pdf, supra.):

Welfare fraud prosecutions in the criminal legal system have concerning race and gender disparities, with women of color making up more than 50% of convictions over a 10-year span. Criminal prosecution in these cases is often not needed as there is already an administrative process that can require the return of funds and even lifetime bans on receiving future benefits.

The Committee therefore recommends the following:

1. Without changing current law in the following cases, continue to allow criminal prosecutions for welfare fraud regardless of the monetary amount:
   1. Multiple counties: intentionally and unlawfully receiving benefits in more than one county.
   2. Stolen or fake identities: intentionally receiving benefits using a fictitious identity.
   3. Trafficking: using, selling, or transferring benefits unlawfully.
2. In cases involving a person’s misrepresentation of income that results in an overpayment, require at least $25,000 in excess benefits before criminal prosecution is permissible. Current law allows misdemeanor prosecutions at any dollar amount and allows felony prosecutions at $950 in excess benefits.

In line with the Committee’s recommendation, this bill raises the threshold from $950 to $25,000 for prosecuting welfare fraud based on a misrepresentation or material omission resulting in obtained or retained benefits. As discussed in the preceding section of this analysis, this is also in line with several federal tax fraud statutes. Anything under the $25,000 threshold would be subject to the administrative process when appropriate. This bill also decriminalizes welfare fraud based on a misrepresentation or material omission to obtain aid or attempt to obtain aid where no aid is actually obtained. Though if a statement is made under penalty of perjury to obtain the aid, this could be prosecuted under the perjury statute. (Pen. Code, § 118.)

The bill also prohibits criminal prosecution for an overpayment or overissuance of benefits obtained under various specified public social services programs, except as specified in the welfare fraud provisions or as required by federal law. And the bill prohibits an individual from being additionally charged with perjury based solely on a statement made to a county welfare department, if they are subject to prosecution for overpayment or overissuance pursuant to the welfare fraud provisions.

This bill also expands upon prior related legislation, SB 360 (Skinner, Chapter 390, Statutes of 2017. SB 360 exempted an individual from criminal prosecution for overpayment or overissuance of CalWORKs or CalFresh benefits for any month in which the county human services agency was in receipt of Income and Eligibility Verification (IEV) data match information indicating the overpayment or overissuance but had not provided timely and adequate notice to the individual. This bill also exempts the individual from an administrative finding of an intentional program violation. Additionally, this bill similarly exempts an individual from criminal prosecution or an administrative finding of an intentional program violation for an overpayment or overissuance of CalWORKs or CalFresh benefits, for any month in which the county human services agency was in receipt of any New Hire Registry (NHR) data match information indicating the overpayment or overissuance but had not provided a timely and adequate notice to the individual to report income.

According to information provided by the author’s office, this bill is intended to encourage county workers to handle public benefit overpayments through the administrative process more frequently, keeping vulnerable families together and preserving scarce justice system resources for the rare cases where prosecution is necessary.

As some opponents of this bill note, California public assistance fraud can be prosecuted federally. For example, SNAP (CalFresh) fraud may be prosecuted federally. (See 7 U.S.C. § 2024, subd. (b).)

1. Argument in Support

According to Coalition of California Welfare Rights Organizations, the bill’s sponsor:

On behalf of the Coalition of California Welfare Rights Organizations (CCWRO) I am writing in strong sponsor support of SB 560 (Smallwood-Cuevas), relating to the establishment and collection of public benefit overissuances to prevent errors and to limit the use of the criminal legal system in collecting the overissuances in those circumstances when federal law does not require it.

CCWRO has been representing beneficiaries of AFDC, Food Stamps, now CalWORKs and CalFresh since the early 1980s.

Criminalizing inadvertent actions of families with children have been regular occurrence in our practice. We have seen moms sentenced to jail for overpayments that the county knew of for months and sometimes for years, but failed to act on them, and then impose felony charges for the large overpayments caused by the welfare departments failure to act on reported income.

We have seen families be charged with one welfare fraud felony and 11 perjury felony charges just to get a guilty plea agreement to one felony. After copping to the one felony count they are asked to go to WtW job club to get a job. When they apply for a job and say they are a convicted felon that often results in a “not hired” action.

Welfare fraud is a “while collar” crime, but welfare fraud is treated as violent crime.

California’s safety net programs serve our state’s poorest residents. To be eligible for an average monthly CalFresh benefit of $328 per family of three, a family’s income must be below 200% of the federal poverty line, or less than $53,300 per year. For CalWORKs, a family income must be even lower. The eligibility requirements, mostly set by federal law, are complicated and so are the reporting rules. It is easy to make errors, especially for families that are juggling the multiple challenges associated with poverty. That is why the federal government provides for a standard process for the administrative collection of overissuances.

SB 560 maximizes the use of these administrative processes and removes the likelihood of an errant overissuance turning into a criminal legal matter. Additionally, SB 560 prevents errors in the establishment of an overissuance by requiring a social worker, qualified to make determinations of aid, to review all overissuance decisions prior to a collection process being established. Without this human review, the highly automated process makes too many errors and the consequences are significant to both administrators and to the families being served.

Simply put SB 560 (Smallwood-Cuevas) helps our public social safety net programs prevent errors and prevent unnecessary harm when errors are made. For these reasons, we are proud to support this important measure and urge your support in committee.

1. Argument in Opposition

According to the California District Attorneys Association:

I regret to inform you that we must oppose SB 560, which would eliminate penalties for welfare fraud involving amounts less than $25,000 and would delete all criminal penalties for attempts to commit welfare fraud. Further, because welfare fraud includes fraud in federally funded programs such as the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF), eliminating California’s authority to investigate and prosecute attempted welfare fraud and welfare fraud under $25,000, this bill threatens to shift investigative responsibility to federal agencies including the U.S. Immigration and Customs Enforcement.

SB 560 appears to be premised on the misconception that welfare fraud cases result from administrative errors. In truth, welfare fraud is a specific intent crime, meaning that in order to prosecute an offender for welfare fraud, prosecutors must be able to prove the offender intended to defraud the system to steal funds. Thus SB 560’s passage will preclude prosecution for those who intentionally steal money from programs intended only to assist individuals and families in need of assistance. For this reason, the unchecked welfare fraud SB 560 would encourage will not only harm the taxpayers who fund the system but will also harm the very people the system in intended to assist.

CDAA understands the importance of supporting individuals and families in need, but SB 560 does not support the needy. Instead, SB 560 will shield those who intentionally steal from assistance programs and put the viability of those programs at risk.

-- END –

SENATE COMMITTEE ON HUMAN SERVICES

Senator Arreguín, Chair

2025 - 2026 Regular

Subject: Public social services

SUMMARY

This bill increases the threshold for welfare fraud and moves most cases of overpayment to be dealt with at the county administrative level. Specifically, the bill increases the threshold for prosecution of welfare fraud from $950 to $25,000, outlines the steps county human services offices must take when an overpayment or overissuance occurs, and prohibits criminal prosecution for an overpayment or overissuance of benefits in CalWORKs and CalFresh unless specified conditions apply.

ABSTRACT

Existing Law:

1. Establishes the federal Temporary Assistance for Needy Families (TANF) program, which provides block grants to states to develop and implement their own state welfare-to-work programs designed to provide cash assistance and other supports and services to low-income families. (42 United States Code 601 et seq.)
2. Establishes the California Work Opportunity and Responsibility to Kids (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 11200 et seq.)
3. Establishes income, asset, and real property limits used to determine eligibility for the CalWORKs Program and grant amounts based on family size and county of residence. (WIC 11150, 11160, 11450 et seq.)
4. Generally requires a recipient of CalWORKs benefits to participate in welfare-to-work activities as a condition of eligibility for aid. (WIC 11320 et seq.)
   
5. Establishes qualifying welfare-to-work (WTW) activities to include employment, on-the-job training, workstudy, community service, adult basic education, and other specified activities, and requires a specified number of weekly hours of WTW participation to remain eligible for aid. (WIC 11322.6)
   
6. Establishes the number of weekly hours of WTW participation necessary to remain eligible for aid, including requirements for an unemployed parent in a two-parent assistance unit, as specified. (WIC 11322.8)
7. Requires necessary supportive services to be available to every CalWORKs participant in order to participate in an assigned program activity or to accept employment, to include child care, diaper costs, transportation costs, ancillary expenses – which include the cost of books, tools, clothing specifically required for the job, fees, and other necessary costs – and personal counseling, as specified. (WIC Section 11323.2)
   
8. Establishes criminal penalties for violation of certain provisions relating to, among other offenses, willfully and knowingly, with the intent to deceive, by means of a false statement or representation, or by failing to disclose a material fact, or by impersonation or other fraudulent device, obtaining or retaining specified aid. (WIC 10980, et seq.)

This Bill:

1. Increases from $950 to $25,000 the threshold for prosecution of welfare fraud.
2. Provides that prior to beginning a criminal action for welfare fraud, a county human services agency shall determine whether the benefits were authorized as a result of an error in the CalSAWS. If it is determined it was an error in CalSAWS, the county human services agency shall not refer the case for criminal action.
3. Provides that a person shall not be subject to criminal prosecution or an administrative finding of intentional program violation, under this section or under any other law, for an overpayment or overissuance of benefits, obtained under the CalWORKs program or the CalFresh program, for any month in which the county human services agency was in receipt of any New Hire Registry (NHR) data match information indicating any potential for an overpayment or an overissuance and for which the county human services agency has not provided to the person a timely and adequate reminder to report income.
4. Provides that the county human services agency shall be deemed to be in receipt of NHR data match information indicating any potential for an overpayment or an overissuance following 45 days from the date of the county human services agency’s possession of that information.
5. Provides that if the county human services agency does not complete the required actions, including sending a reminder to report income within 45 days of receipt of an NHR data match, sending a reminder of the households’ Income Reporting Threshold, providing an opportunity to report income over that threshold, and if the households’ income is below the threshold, to remind the household to report income at the next mandatory report, the county human services agency has not provided to the person a timely and adequate reminder to report income.
6. Provides that notwithstanding any other law, a person shall not be subject to criminal prosecution for an overpayment or overissuance of benefits except as specified by law.
7. Provides that a person shall not be subject to criminal prosecution for an overpayment or overissuance of benefits obtained under a county’s general assistance program, the CalWORKs program or the CalFresh program, or the federal SNAP if either of the following apply:
   1. If the county has obtained a finding of intentional program violation through court or administrative proceedings.
   2. That person is in repayment status or grant or benefit reduction status.

FISCAL IMPACT

This bill has not yet been analyzed by a fiscal committee.

BACKGROUND AND DISCUSSION

Purpose of the Bill:

According to the author, “SB 560 creates a fair process for families who need access to public benefits. The bill empowers counties to address public benefit overpayments through the administrative process when appropriate. By updating the law so simple overpayment cases are processed through the administrative penalty system, county workers will be equipped to support recipients in maintaining accurate reporting paperwork. This will reduce overpayments and will improve the likelihood that benefits will be repaid to the State when appropriate, all without traumatizing and destabilizing vulnerable families. Relying more on the administrative process will reduce overpayments, make it safer for families to access essential support, preserve court resources for the most serious cases, and enhance our ability to recoup lost funds.”

CalWORKs

CalWORKs, is the state version of the federal Temporary Assistance for Needy Families (TANF) and is the state’s largest anti-poverty program. It provides temporary cash assistance aimed at moving children out of poverty and helping qualified low-income families meet their basic needs, such as rent, clothing, utility bills, food, and other items needed to ensure children are cared for at home and safely remain with their families. In addition to cash assistance, adult CalWORKs recipients are provided education, employment, and training services designed to help remove barriers to work and promote self-sufficiency. These services are typically outlined in a welfare-to-work plan. CDSS is the designated state agency responsible for program supervision at the state level, and counties are responsible for administering the program at the local level.

CalWORKs is funded through federal, state, county and realignments funds. The federal government gives the state a $3.7 billion TANF block grant and CalWORKs receives $2 billion of that allocation. California and local governments spend a maintenance-of-effort amount of $2.9 billion as required by federal law. The state also uses general fund money for state- only programs and provides counties with a single allocation to fund many CalWORKs services. Funds from the 1991 realignment are also used to fund assistance payments and are part of the single allocation.

Eligibility for CalWORKs is based on family size, income level, and region. Families must show economic hardship through income and asset tests and participation in the program is also time limited. Adults are only allowed to use CalWORKs for 60 months in their lifetime. Children of adults who receive cash aid can continue to receive benefits until they are 18 years old in California.

Welfare-to-Work

Adults are who participate in CalWORKs are also required to participate in welfare- to- work activities, unless exempted, which include: employment, education, job skills training, and/or vocational education, work study on college campuses, on-the-job training, community service, and job retention services, or activities to address or remove barriers like mental health, substance use disorder, and domestic abuse. Eligible families can also receive supportive services like child care, transportation, ancillary expenses, mental health services, substance abuse services, and personal counseling.

Unless they are exempt, an adult in a one parent assistance unit is required to participate in welfare- to- work activities for an average of 30 hours per week during the month or an average of 20 hours per week for a parent with a child under age six.  In a two-parent assistance unit, one or both adults must participate in welfare- to- work activities for a combined average of 35 hours per week. Participation in activities is time limited to 24 months.

Once the 24 months of welfare- to- work activities have been exhausted, adults must meet stricter federal work participation requirements (20, 30, or 35 hours weekly, depending on family composition) unless they are exempt or receive an extension.  If a CalWORKs recipient who is not exempt from participation does not meet the welfare-to-work requirements, the recipient may be sanctioned, and that recipient’s portion of the family’s grant may be subtracted from the amount provided to the family.

County Role in CalFresh

California is one of ten states that administers CalFresh through a county based system. Counties oversee the administration of the program including eligibility determination, enrollment, fraud investigation and outreach activities. Though the counties are funded by the state for these activities and follow state laws and regulations, how funding is allocated to these administrative activities is up to each county. This means CalFresh recipients may have a different experience using the CalFresh program based on the county they live in but benefit amounts remain the same. The unique demographics, geography and population size of each county also play a role in CalFresh participation rates. In order to unify and automate various processes, the state invested in the California Statewide Automated Welfare System (CalSAWS) and required all counties to use it. Its functions include eligibility determination, benefit computation, benefit delivery, case management and information management for certain welfare programs including CalFresh. As of October 2023, all counties are using the system.

Difficulty of Applying for CalFresh and Uptake Rates

California is still behind the national average enrollment rate for SNAP. It is estimated that 2.7 million eligible Californians are not enrolled in CalFresh. Reasons commonly cited are lack of awareness about their eligibility (especially among college students) and difficulty applying. Application difficulties are especially acute among populations whose first language is not English and people with disabilities. In addition to the initial application, the process of recertifying eligibility or “churn” can decrease enrollment. Churn refers to the instance when a family that is on CalFresh and eligible, is automatically unenrolled because they did not complete the paperwork necessary to certify they are still eligible. They may later return but have disrupted access to resources.

A recent CalMatters article^[1] highlighted the difficulty of college students enrolling in CalFresh, as well as the difficulties of recertifying. During the month before recertification the article notes students are six times more likely to drop out of the program.

Electronic Benefit Transfer (EBT) Card Theft

The CalFresh and CalWORKs programs serve approximately 4.6 million people and provide about $10 billion in combined food and cash benefits each year. Recipients of CalFresh and CalWORKs receive their food and cash benefits on EBT cards which can be used at ATMs and point-of-sale devices throughout the state. Statute requires the state to reimburse cash benefits stolen by scams in which recipients unwittingly give up their EBT card information along with their personal identification number and consequently become victims of cash theft to an unauthorized third party. The reimbursements for replacement benefits are paid from the state General Fund.

Since October 2021, California has seen a significant increase in EBT theft, which is a nationwide problem. CDSS has implemented a variety of theft mitigation strategies and is actively collaborating with federal, state, and local law enforcement on the investigation of criminal activity related to EBT theft. One of the key causes of this theft is that EBT cards have outdated technology and are not chip-enabled, making CalFresh, CalWORKs, and CAPI recipients particularly vulnerable to skimming theft relative to other cardholders. Updated chip enabled cards are now being distributed to CalFresh and CalWORKs recipients.

Committee on Revision on the Penal Code

The Committee on Revision of the Penal Code (Committee) was created on January 1, 2020 as a new policy-making body. The Committee was tasked with studying the California Penal Code and make statutory reform recommendations to achieve the following improvements: simplify and rationalize the substance of criminal law; simplify and rationalize criminal procedures; establish alternatives to incarceration that will aid in the rehabilitation of offenders; and improve the system of parole and probation. The Committee releases an annual report to the legislature which describes their yearly recommendations. In the introduction to the 2023 Annual Report and Recommendations of the Committee on Revision of the Penal Code (Annual Report), the Committee writes in part:

“In 2023, over the course of four public meetings, the Committee focused on the

effects of recent reforms, including resentencings, reducing court-ordered debt, and the initial implementation of the Racial Justice Act. The Committee also considered prosecutorial discretion, from the reality that the vast majority of convictions are obtained through guilty pleas to how welfare fraud is treated differently county to county.

…

“The Committee also considered the discrete crime of welfare fraud. The majority of people prosecuted for this offense are women of color, almost all of whom are struggling financially. Andrea Brayboy, Chief of the California Department of Social Services CalFresh and Nutrition Branch, explained the extremely complex system for receiving benefits and noted that the current threshold for charging someone with felony welfare fraud can be just one month of benefits for some families. “

The 2023 Annual Report contains 10 recommendations, one of which is the catalyst for this bill, focus welfare fraud prosecution on the most serious cases. The committee writes regarding focusing prosecution:

“Welfare fraud prosecutions in the criminal legal system have concerning race and gender disparities, with women of color making up more than 50% of convictions over a 10-year span. Criminal prosecution in these cases is often not needed as there is already an administrative process that can require the return of funds and even lifetime bans on receiving future benefits.

The Committee therefore recommends the following:

1. Without changing current law in the following cases, continue to allow criminal prosecutions for welfare fraud regardless of the monetary amount:
   1. Multiple counties: intentionally and unlawfully receiving benefits in more than one county.
   2. Stolen or fake identities: intentionally receiving benefits using a fictitious identity.
   3. Trafficking: using, selling, or transferring benefits unlawfully.
2. In cases involving a person’s misrepresentation of income that results in an overpayment, require at least $25,000 in excess benefits before criminal prosecution is permissible. Current law allows misdemeanor prosecutions at any dollar amount and allows felony prosecutions at $950 in excess benefits.”

The report goes on to note that reports of welfare fraud are lower than reports of stolen benefits, California prosecutes welfare fraud at three times the national average, and over 75% of those convicted are women and more than 50% are women of color. This bill will give counties more discretion in how they review these fraud cases and how many of them go to criminal prosecution.

Related/Prior Legislation:

SB 360 (Skinner, Chapter 390, Statutes of 2017) exempts an individual from criminal prosecution for overpayment or overissuance of CalWORKs or CalFresh benefits for any month in which the county human services agency was in receipt of Income and Eligibility Verification data match information indicating such overpayment or overissuance but had not provided timely and adequate notice to the individual.

COMMENTS

This bill is based on recommendations from the Committee on the Revision of the Penal Code in their 2023 Report to focus welfare fraud prosecution on only the most serious cases. Welfare fraud is a crime that is often misunderstood. The report shows that fraud is most often the result of stolen benefits, such as the rise of EBT theft from CalFresh recipients who rarely know that their benefits are being stolen until it is too late. This bill will raise the threshold of what amount of money lost is considered welfare fraud and give county workers that interact more closely with recipients new tools to identify and evaluate overpayment and overissuance as mistakes or criminal activity.

SUPPORT/OPPOSITION

Arguments in Support:

Western Center on Law and Poverty writes, “The eligibility requirements are complicated and so are the reporting rules. It is easy to make errors, especially for families that are juggling the multiple challenges associated with poverty, and who may also be dealing with barriers related to language access or disability.

Fortunately, the administrative process currently in place can handle the vast majority of overpayment cases; and by addressing these cases within the public benefits system rather than the justice system, counties will be more likely to recoup public benefit funds, and less likely to cause harm. By handling overpayment cases through the administrative system, county workers will be empowered to support recipients in maintaining accurate reporting paperwork by correcting mistakes and collecting on overpayments. This will help ensure our most vulnerable community members can access the support they need safely by preventing unnecessary harm when errors are made.

In sharp contrast, when overpayments are referred to the criminal system, families can be torn apart for something as simple as a paperwork error. The head of household, most often a woman of color, can face serious immigration consequences, loss of employment, loss of housing, and even loss of child custody. Convictions also saddle people with felony records, severely limiting future employment opportunities and thus working at cross purposes with the work program.”

Arguments in Opposition:

The California District Attorneys Association writes, “… we must oppose SB 560, which would eliminate penalties for welfare fraud involving amounts less than $25,000 and would delete all criminal penalties for attempts to commit welfare fraud. Further, because welfare fraud includes fraud in federally funded programs such as the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF), eliminating California’s authority to investigate and prosecute attempted welfare fraud and welfare fraud under $25,000, this bill threatens to shift investigative responsibility to federal agencies including the U.S. Immigration and Customs Enforcement.

“SB 560 appears to be premised on the misconception that welfare fraud cases result from administrative errors. In truth, welfare fraud is a specific intent crime, meaning that in order to prosecute an offender for welfare fraud, prosecutors must be able to prove the offender intended to defraud the system to steal funds. Thus SB 560’s passage will preclude prosecution for those who intentionally steal money from programs intended only to assist individuals and families in need of assistance. For this reason, the unchecked welfare fraud SB 560 would encourage will not only harm the taxpayers who fund the system but will also harm the very people the system in intended to assist.”

POSITIONS

Support:

Coalition of California Welfare Rights Organizations (Sponsor)

California State Council of Service Employees International Union (SEIU Ca) (Co-Sponsor)

Western Center on Law & Poverty (Co-Sponsor)

All of Us or None (HQ)
Asian Americans Advancing Justice Southern California
California Association of Food Banks
California Coalition for Women Prisoners
Californians for Safety and Justice
Californians United for A Responsible Budget
Center on Juvenile and Criminal Justice
Child Care Law Center
Courage California
Ella Baker Center for Human Rights
Empowering Women Impacted by Incarceration
Grace Institute - End Child Poverty in Ca
Initiate Justice
Initiate Justice Action
Legal Services for Prisoners With Children
Legal Services of Northern California
Neighborhood Legal Services of Los Angeles County
Parent Voices California
Project Sparc
Prosecutors Alliance Action
Rubicon Programs
Smart Justice California, a Project of Tides Advocacy

Oppose:

California District Attorneys Association
California Welfare Fraud Investigators Association
United Council on Welfare Fraud

-- END --

1. https://calmatters.org/education/higher-education/college-beat/2025/03/california-colleges-calfresh-food-insecurity/ ↑