Supplemental Security Income/State Supplementary Program |
In December 1996, there were 330,832 aged, 21,631 blind, and 684,409 disabled SSI/SSP recipients.
Federal law allows states the discretion to set the level of the SSP grant (the state-funded component of SSI/SSP) as long as the payment remains at or above the federally mandated maintenance-of-effort (MOE) level. The MOE level is the SSP grant level in effect in July 1983.
Budget trailer bill legislation for 1995-96--Chapter 307, Statutes of 1995 (AB 908, Brulte)--reduced payment standards by 4.9 percent statewide, with an additional 4.9 percent reduction for persons living in low-cost counties. The statewide reduction was scheduled to terminate on June 30, 1996 and the additional reduction to recipients in low-cost counties was to be ongoing. Budget legislation for 1996-97--Chapter 206, Statutes of 1996 (SB 1780, Committee on Budget and Fiscal Review)--extended the statewide 4.9 percent grant reduction through October 31, 1997. This statute would reduce the grants for most recipients below the federally mandated MOE, but federal legislation permitting this reduction has not been enacted.
Figure 28 provides detail on the savings proposed for 1997-98 that are dependent on federal legislation. As the figure shows, $279 million in General Fund savings are at risk. This consists of savings from provisions in current law and from new proposals by the Governor. Previous budget actions which (1) reduced grants statewide by 4.9 percent through October 31, 1997; and (2) permanently reduced grants by 4.9 percent in low-cost counties, result in savings of $90 million in the budget year. The Governor's proposal to make permanent the statewide 4.9 percent grant reduction results in additional savings of $189 million.
| Figure 28 | |
| State Savings Dependent on Federal Legislation
SSI/SSP 1997-98 | |
| (Dollars in Millions) | |
| Budget Proposal | Amount |
| Previous Budget Actions: | |
| Reduce grants 4.9 percent in low-cost counties | $66 |
| Extend statewide 4.9 percent grant reduction through 10-31-97 | 24 |
| Subtotal | $90 |
| New Proposals: | |
| Make statewide 4.9 percent grant reduction permanent | $189 |
| Total | $279a |
| aExcludes offsetting costs of $11 million in other departments. | |
Chapter 206, Statutes of 1996 (SB 1780), extended the 4.9 percent statewide grant reduction through October 31, 1997 and extended the suspension of the state cost-of-living adjustment (COLA) through December 31, 1997. Restoring the 4.9 percent grant reduction on November 1, 1997 would result in General Fund costs of $205 million. Restoring the state COLA on January 1, 1998 would result in additional costs of approximately $7 million. Restoring the COLA results in relatively modest costs for technical reasons related to the interaction between the state and federal COLAs in 1997-98. We also note that the Governor proposes to "pass through" the federal COLA to recipients, resulting in grant increases of $16 per individual and $24 per couple in January 1998.
Figure 29 shows SSI/SSP grants on January 1, 1998 for individuals and couples in Region 1 (high-cost counties) and Region 2 (low-cost counties) under both current law and the Governor's proposal. Grants under the Governor's proposal would be roughly 5 percent less than under current law. As a point of reference, we note that the federal poverty guideline in 1996 is $645 per month for an individual and $863 per month for a couple. Thus, under the Governor's proposal the grant for an individual would be below the poverty guideline (97 percent of the poverty level in the high-cost counties and 93 percent of poverty in the low-cost counties). Under current law the grant for an individual would be just above the poverty line (102 percent) in high-cost counties and just below the poverty line (97 percent) in the low-cost counties. Under both current law and the Governor's proposal, grants for couples are above the poverty guideline by approximately 20 to 30 percent.
| Figure 29 | |||
| SSI/SSP Maximum Monthly Grants
Current Law and Governor's Proposal January 1, 1998 | |||
| Region and Recipient Category | Current Law a | Governor's Proposal b |
Difference |
| Region 1: High-cost counties | |||
| Individuals | $657 | $626 | -$31 |
| Couples | 1,170 | 1,111 | -59 |
| Region 2: Low-cost counties | |||
| Individuals | $627 | $598 | -$29 |
| Couples | 1,117 | 1,059 | -58 |
| aIncludes federal SSI COLA of $16 per individual and $24 per couple and application of the state COLA (about $1 for individuals and $5 for couples in the high-cost counties). | |||
| bIncludes federal SSI COLA of $16 per individual and $24 per couple. | |||
Background. Federal welfare reform makes most legal noncitizens ineligible for SSI/SSP (with exceptions for refugees and asylees in their first five years of residence, veterans and their dependents, and those who have worked for ten years). Noncitizens arriving after August 22, 1996 are immediately ineligible. In July 1996, there were approximately 330,000 legal noncitizens receiving SSI/SSP in California. This represents about 40 percent of all noncitizens in the United States that are receiving SSI. The Department of Social Services (DSS) estimates that 243,700, or 74 percent, of these recipients are unlikely to meet any of the exception criteria noted above and will become ineligible by September 1997 unless they are able to naturalize (that is, attain citizenship).
Naturalization Process. In order to apply for citizenship, noncitizens generally must be a lawful permanent resident for five years. According to DSS, over 90 percent of immigrants receiving SSI benefits in California have been in the United States for five years or more, generally making them eligible to apply for citizenship immediately.
Obtaining citizenship usually requires passing tests in English competency and civics (and clearing a Federal Bureau of Investigation [FBI] background check). However, exemptions are available. For example, about one-third of immigrants on SSI have been in the U.S. for more than 15 years, which would qualify those who are 55 years or older for an exemption from the English test. Furthermore, exemptions from both tests are available for immigrants with certain disabilities that would make them unable to pass the test. Immigrants also must be competent to take an oath of allegiance. Currently there are no waivers from this requirement.
During 1996, the Immigration and Naturalization Service (INS) reduced the processing time for citizenship from over one year to about six months. More recently, the processing time in the southern California area has increased from six to nine months, primarily due to changes in INS procedures pertaining to completion of FBI background checks. (We do not have recent information for the northern California area.)
How Many Noncitizens Will Naturalize? The department assumes that about two-thirds of these 243,700 noncitizens will become citizens before September 1997, leaving approximately 83,000 subject to benefit termination. Based on these assumptions, the DSS projects SSP savings of $153 million from the General Fund in 1997-98. Because noncitizens would be eligible for county General Assistance, the costs to counties are likely to increase by roughly the same amount.
We note that in our November report on the state's fiscal outlook, we assumed a slower rate of naturalization of noncitizens than does the Governor's budget. Specifically, we assumed that 40 percent of the noncitizens would naturalize (or had already become citizens) prior to September 1997, and that an additional 30 percent would naturalize by March 1999. Based on our assumptions, SSP savings in 1997-98 would be approximately $250 million, or $100 million more than the budget assumes. Similarly, county cost increases would rise accordingly. Due to data limitations, however, there is considerable uncertainty in making these projections.
During February and March of 1997, the Social Security Administration will be notifying noncitizens that they may be ineligible for SSI/SSP. As recipients respond to these notices, better information on citizenship status and applications for citizenship is likely to be available. We also note that in February, the INS is expected to issue new citizenship regulations specifying criteria for certain disabled applicants to be exempted from the requirements, noted earlier, to demonstrate proficiency in the English language and fundamental knowledge of United States government and history.
Accordingly, we withhold recommendation until we have an opportunity to review this information.
As a result of enactment of federal welfare reform legislation, noncitizens who are legally residing in the state are no longer eligible for SSI/SSP benefits. There are exceptions to this restriction--those individuals serving in the armed forces, veterans, refugees, asylees, and those who have worked ten years. In addition, noncitizens who subsequently become citizens would be eligible for benefits at that time.
The budget estimates that about 87,000 noncitizens will not attain citizenship status during 1997-98 and will therefore lose SSI/SSP benefits. This consists of about 48,000 aged persons and 39,000 disabled persons. These individuals would be eligible for county-funded General Assistance (GA) benefits. Currently, GA grants vary among the counties, averaging about $215 per person. The budget, however, also proposes legislation to eliminate the state mandate that counties provide GA benefits. Thus, it is not clear to what extent benefits will be available to these noncitizens.
To facilitate legislative consideration of this issue, we identify some alternatives for providing assistance below:
Continue full SSI/SSP benefits. The General Fund cost of adopting this option would be $507 million (plus administrative costs) above the Governor's Budget in 1997-98. (See Figure 2 for the grant levels authorized by current law.) Under this option, the state would continue to fund the state component of the grant (SSP) as well as backfill for the federally-funded component (SSI).
Continue grants for a limited period. The rationale for this policy would be to provide assistance for a period of time that would be sufficient to enable recipients to satisfy the requirements of citizenship. As with the first option, the state would fund both the SSI and SSP components of the grant. The General Fund cost of this option would depend on the length of time that aid is provided, with one month costing about $50 million (plus administrative costs).
Reimburse counties for the GA grant costs of aiding these noncitizens. This would result in a county cost avoidance of about $190 million, based on the budget's caseload estimates and assuming that all of the noncitizens who lose SSI/SSP benefits would apply for GA. (Costs could be higher or lower, depending on the extent to which noncitizens become citizens, compared to the budget assumptions.)
Supplement county GA benefits with state grants equal to the current SSP component of the SSI/SSP grant. This would provide for maximum supplemental grants of $156 per month for individuals and $396 for couples, at a General Fund cost of $153 million over the Governor's Budget.
Adopt Policies to Facilitate the Citizenship Process. This could include, for example, policies to ensure that the noncitizens have access to citizenship classes offered by the public education institutions and outreach programs informing noncitizens about how to attain citizenship and how to obtain allowable test exemptions. We note that some counties have recently implemented or expanded programs to assist noncitizens in attaining citizenship.
Whether to adopt such measures to assist these noncitizens when they lose SSI/SSP benefits will depend on the Legislature's priorities in allocating state funds.
The budget proposes an appropriation of $560.3 million from the General Fund for county
administration of welfare programs in 1997-98. This represents an increase of $68.5 million,
or 14 percent, over estimated current-year expenditures.
Typically, the methodology used to budget for county administration is based on the
amount counties actually spent in the past year, adjusted for projected changes in caseload
and inflation in the budget year. This amount is also adjusted for policy changes. The
budget for county administration, however, does not reflect the 0.9 percent caseload
reduction that the Department of Social Services projects for the AFDC Program in
1997-98. Making this adjustment to the budget for county administration would result in
General Fund savings of $4.6 million.
Furthermore, as we discussed previously in our analysis of the AFDC Program, we project
that the AFDC caseload will decline by 2.1 percent in 1997-98 rather than the 0.9 percent
reduction in the budget. In order to account for this larger caseload decline, we recommend
reducing General Fund support for county administration by an additional $6 million. In
total, adoption of our recommendations would result in a General Fund savings of
$10.6 million in 1997-98.
Prior to federal welfare reform, the federal government paid for 50 percent of the
administrative costs for the AFDC Program. Under the block grant approach in the new
federal law, however, the state receives a fixed amount of federal funds. In the Food Stamps
and Medi-Cal programs, the federal government continues to pay for 50 percent of the
administrative costs.
The AFDC recipients are eligible for Medi-Cal and food stamps as a result of qualifying for
AFDC. In the past, the costs for county administration associated with eligibility
determination were allocated primarily to the AFDC Program for purposes of claiming
federal matching funds. The budget proposes to continue this practice in 1997-98. We note,
however that some of these costs (for example, eligibility determination) could be allocated
to the Medi-Cal and Food Stamps programs. By doing so, it might be possible to claim
federal matching funds for these costs, without affecting the block grant. These additional
federal funds would reduce state and county costs for AFDC administration. For example,
reallocating $50 million in AFDC eligibility determination costs to Medi-Cal would result in
General Fund savings of $11.5 million and county savings of $13.5 million.
Currently, there is considerable uncertainty concerning how these costs can be allocated.
The federal Department of Health and Human Services and the Office of Management and
Budget are considering this issue and may provide cost allocation guidelines in the next few
months. Given the potential for substantial state savings, we recommend that the
Department of Social Services (DSS) and the Department of Health Services (DHS) report
on this issue during the budget hearings.
The responsibility of developing the Statewide Automated Welfare System (SAWS) and the
Statewide Automated Child Support System (SACSS) was moved from the DSS to the
Health and Welfare Data Center (HWDC) in 1995. A brief summary of these projects is
provided below. For a more complete description of these programs and our
recommendations, please see our review of the HWDC in the General Government section
of this Analysis.
SAWS. The budget proposes $118.6 million ($47.9 million federal funds, $55.3 million
General Fund, $5.7 million county funds, and $9.6 million in reimbursements) for the DSS
and HWDC to continue the development and implementation of SAWS. Pursuant to the
1995-96 Budget Act, the DSS is pursuing a multiple county consortium strategy for
implementing SAWS. Under this approach, counties have joined together into four
consortia.
In our analysis of the HWDC, we withhold recommendation on the development of the
Welfare Case Data System (WCDS) consortium (one of the four SAWS consortia), the
reprogramming of SAWS for the Governor's proposed CalTAP welfare reform initiative,
and consortia planning and management, pending receipt of additional information from
the HWDC. Accordingly, we withhold recommendation on the $18 million ($9.1 million
General Fund) for WCDS, the $13.3 million ($6.7 million General Fund) for CalTAP
reprogramming, and $18 million ($9.1 million General Fund) for consortia planning and
management in the DSS budget for these projects.
SACSS. The budget proposes $38.2 million ($28.3 federal funds, $4.3 million General Fund
and $5.6 million county funds) for the DSS to implement, operate, and maintain the
SACSS in 1997-98. As of December 1996, 22 counties had implemented SACSS. Statewide
implementation is scheduled to be completed by October 1997.
Although recent delays in implementation in Fresno and other counties have put the
project behind schedule, the budget does not reflect these delays or the increased costs for
meeting revised county child support needs. In our analysis of the HWDC, we discuss this
and other issues pertaining to the SACSS project and we withhold recommendation
pending receipt of additional information from the data center. Accordingly, we withhold
recommendation on the $38.2 million ($4.3 million General Fund) in the DSS budget for
the project in 1997-98.
The budget proposes $7.7 million ($3.8 million General Fund) for implementation of the
Statewide Fingerprint Imaging System (SFIS), which is modeled on an existing fraud
detection program in Los Angeles County. The HWDC is responsible for developing and
procuring the statewide system. The DSS will provide the data center with $6 million
($3 million General Fund) for development and procurement costs. The remaining funds
($1.7 million, of which $0.8 million is General Fund) will be used for county administration
of the program. According to the current schedule, counties will phase-in the system
beginning in February 1998. Partial-year AFDC/TANF grant savings are estimated to be
$3.8 million General Fund and $0.1 million county funds in 1997-98. When the system is
fully operational, the program is estimated to provide annual net savings of about
$60 million ($57 million General Fund).
In our analysis of the HWDC (please see the General Government section of this Analysis),
we note that a required feasibility study report (FSR) has not been prepared for the SFIS.
In that analysis, we recommend that funding authority for this project be deleted and that
budget bill language be adopted to augment the budget and appropriate these funds upon
completion of the FSR and subsequent contract award for system implementation.
Specifically we recommend that the Legislature adopt the following budget bill language in
Item 5180-141-0001:
In augmentation of the funds appropriated by this item, an additional sum of up to
$3,843,000 is hereby appropriated for continued development and implementation of the
Statewide Fingerprint Imaging System (SFIS), subject to the review and approval by the
Department of Finance (DOF) and the Department of Information Technology of a
feasibility study report in accordance with the State Administrative Manual, and the
award of a contract for implementation of the SFIS. In the event that the contract award is
not made prior to July 1, 1997, the funds appropriated shall be made available consistent
with the amount approved by the DOF based on its review of the feasibility study report.
In the event that a feasibility study report is not approved prior to July 1, 1997, the funds
appropriated shall be made available by the DOF in an amount sufficient to ensure
completion of a feasibility study report, and in an amount consistent with a subsequent
contract award.
Identical language should be adopted in Item 5180-141-0890, but the amount of the
augmentation should be $3,844,000.
Immediate social worker response to allegations of child abuse and neglect.
Ongoing services to children and their families who have been identified as victims, or
potential victims, of abuse and neglect.
Services to children in foster care who have been temporarily or permanently removed
from their families because of abuse or neglect.
For a discussion of this issue, please see our review of the Health and Welfare Data Center
in the State Administration section of this Analysis.
The IHSS Personal Care Services Program (PCSP) includes personal care services as a
federally reimbursable service under the Medicaid Program. The PCSP limits eligibility to
categorically eligible Medi-Cal recipients (Aid to Families with Dependent Children and
SSI/SSP recipients) who satisfy a "disabling condition" requirement. Personal care services
include activities such as (1) assisting with the administration of medications and
(2) providing needed assistance with basic personal hygiene, eating, grooming, and
toileting.
As discussed in our analysis of the SSI/SSP program, the federal welfare reform legislation
of 1996 made most noncitizens ineligible for SSI benefits. The federal act does not address
the IHSS program, but one of the indirect effects of the act is that noncitizens who lose
SSI/SSP eligibility will no longer be eligible for IHSS benefits because, under current state
law, these benefits are limited to persons who meet the SSI/SSP eligibility requirements.
The Governor's budget does not propose legislation to restore IHSS eligibility for these
noncitizens, thereby assuming General Fund savings of $112,000 in 1996-97 and
$23.8 million in 1997-98, and county savings of $61,000 in 1996-97 and $12.1 million in
1997-98. This is based on an estimate of about 11,800 noncitizens losing benefits.
As indicated, the effect of the federal legislation on the IHSS program is a by-product of
the policy changes made to the SSI/SSP program rather than a stated intent of Congress.
We further note that the IHSS program is designed to provide assistance to persons who
are unable to remain in their homes without such assistance. Thus, while the
cost-effectiveness of the program may not be proven, we can expect some long-term savings
from these services to the extent they prevent more costly institutionalized care.
For these reasons, we recommend the enactment of legislation to restore IHSS eligibility for
needy noncitizens. This will result in a General Fund cost of $23.8 million in 1997-98.
We note that a bill has been introduced (AB 67, Escutia) that would implement this
recommendation.
Federal Title XX Social Services Block Grant funds are allocated to the states and can be
used for a variety of purposes in social service programs, with no state
maintenance-of-effort requirement. The budget assumes that California will receive
approximately $285 million in Title XX funds annually in 1996-97 and 1997-98. This
projection, however, does not reflect an increase in the amount appropriated to the states
for federal fiscal year 1997 (October 1996 through September 1997). Pursuant to this
increase, California will receive an additional $13.5 million over the current and budget
years.
These additional federal funds can be used to offset state General Fund expenditures.
Consequently, we recommend that the additional funds be budgeted for the In-Home
Supportive Services program, in lieu of General Fund support. This is consistent with how
most of the Title XX funds allocated to the department are budgeted, and will not result in
a reduction in the level of services provided under the program. We also note that the
federal funds can be carried over from the current year to the budget year. Consequently,
our recommendation assumes that the $13.5 million will be expended in the budget year,
permitting a corresponding reduction in proposed General Fund spending in 1997-98.
The budget appropriates funds for the state and federal share of the costs incurred by the
counties for administering the following programs: (1) Aid to Families With Dependent
Children (AFDC) (or Temporary Assistance for Needy Families [TANF], pursuant to
federal welfare reform); (2) Food Stamps; (3) Child Support Enforcement; (4) Special
Adults, including emergency assistance for aged, blind, and disabled persons; (5) Refugee
Cash Assistance; and (6) Adoptions Assistance.
County Administration
Of Welfare Programs
Budget Does Not Reflect Savings From Projected Caseload Decline
We recommend that the proposed General Fund expenditure for county administration be
reduced by $10.6 million because it does not account for savings from projected caseload
declines. (Reduce Item 5180-141-0001 by $10,630,000.)
Reallocation of Administrative Costs Could Result in Significant
Savings
We recommend that the Department of Social Services and the Department of Health Services
report during the budget hearings on the potential for state and county savings by allocating
certain Aid to Families With Dependent Children/Temporary Assistance for Needy Families
administrative costs to the Medi-Cal and Food Stamps programs, which receive federal
matching funds.
Additional Information Needed On Welfare Automation Projects
We withhold recommendation on proposed funding for the Statewide Automated Welfare
System and the Statewide Automated Child Support System (including $29.2 million from the
General Fund for the Department of Social Services), pending receipt of additional
information from the Health and Welfare Data Center.
Statewide Fingerprint Imaging System Needs Feasibility Study
We recommend that funding for the Statewide Fingerprint Imaging System be deleted and
that the Legislature adopt budget bill language providing that the funding be made contingent
upon completion of a required feasibility study report. (Reduce Item 5180-141-0001 by
$3,843,000 and reduce Item 5180-141-0890 by $3,844,000.)
The Child Welfare Services (CWS) Program provides services to abused and neglected
children and children in foster care and their families. The CWS Program provides:
Child Welfare Services
Infant Health and Protection Initiative
The budget proposes $35 million ($22.2 million General Fund) to establish the Infant
Health and Protection Initiative. The purpose of the initiative is to protect children from
abuse and neglect by substance-abusing parents. For our analysis of the initiative, please
see the section on "Crosscutting Issues" immediately following the overview of health and
social services programs.
Proposed Changes for Child Welfare Services Case Management
System Not Justified
We recommend a reduction of $10 million ($4.8 million General Fund) in the amount
proposed for the Child Welfare Services Case Management System because these expenditures
are not justified or should be funded by the counties. (Reduce Item 5180-151-0001 by
$4,820,000 and reduce Item 5180-151-0890 by $5,160,000.)
The In-Home Supportive Services (IHSS) program provides various services to eligible
aged, blind, and disabled persons who are unable to remain safely in their own homes
without such assistance. While this implies that the program prevents institutionalization,
eligibility for the program is not based on the individual's risk of institutionalization.
Instead, an individual is eligible for IHSS if he or she lives in his or her own home--or is
capable of safely doing so if IHSS is provided--and meets specific criteria related to
eligibility for the Supplemental Security Income/State Supplementary Program (SSI/SSP)
for the aged, blind, and disabled.
In-Home Supportive
Services
Noncitizens Will Lose Eligibility for IHSS As a Result of Federal
Welfare Reform
We recommend the enactment of legislation to restore eligibility for In-Home Supportive
Services (IHSS) for noncitizens who will lose eligibility because of the federal welfare reform
act's provisions regarding the Supplemental Security Income (SSI) program. Restoration of
IHSS eligibility for these persons would be consistent with the intent and prior actions of the
Legislature. (Increase Item 5180-151-0001 by $23,762,000.)
Federal Funds Increase Not Budgeted
We recommend that federal funds budgeted for the In-Home Supportive Services program be
increased by $13.5 million, and General Fund support be reduced by the same amount, to
reflect additional federal Social Services Block Grant funds that the state will receive, but
which are not included in the budget. (Increase Item 5180-151-0890 by $13,500,000 and
reduce Item 5180-151-0001 by $13,500,000.)
Return to 1997-98 Budget Analysis Table of Contents
Return to LAO Home Page