California Welfare Overpayments Enough To Fund 13,000 Cases Annually

Autumn Carter
Executive Director, California Common Sense

California Common Sense released a brief report called “California Welfare Overpayments: Fraud, Internal Errors, and Limited Investigation.” The report finds $848 million in outstanding CalWORKs overpayments to beneficiaries, half of all identified overpayments recovered, and administrative error costs on the rise.

The California Work Opportunities and Responsibility to Kids (CalWORKs) provides temporary cash assistance, welfare-to-work, and other services to eligible low-income families with children. This analysis examines the program’s benefit overpayment trends to determine how frequently beneficiaries and the program’s administration cause errors, as well as how costly those errors are.

While individual errors may seem insignificant, taken together, they prove costly to the system, taxpayers, and the thousands of additional cases they could have funded instead.

For the better part of a decade, just as unemployment was rising and more families sought benefits, California’s social services absorbed cuts as the state diverted limited funds elsewhere. We found that those deep budget cuts had very real unintended consequences: costly administrative errors and a systematic lack of oversight at CalWORKs.

The report’s findings include the following:

  • As of March 2014, California has $848 million in CalWORKs overpayments. In 2012-13, its identified overpayments were $112.8 million with a total of $19.5 million in fraudulent overpayments.
  • The annual identified overpayments are equivalent to the costs of enrolling approximately 13,000 additional cases per year.
  • Beneficiary-caused errors occur six times more often than administration-caused errors and are becoming increasingly common. However, administration-caused errors are becoming costlier.
  • Due to funding cuts, since 2007-08, welfare spending and staffing positions have decreased by 17% and 5%, respectively. This has led to insufficient eligibility and investigation staffing, which may partially explain why administrative-caused errors are becoming costlier.
  • The monthly grants for a CalWORKs employed family of three living in a high-cost county dropped from $830 in 2006-07 to $670 in 2014-15 (19%), after adjusting for inflation.
  • In 2012-13, overpayment collections totaled $53.6 million. Over the past decade, only 49% of the total sum of identified overpayments have been recovered and 10% of them have not been pursued.

To view the report online, visit http://bit.ly/1C2ZtR0.

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