Public social services.

Senator Smallwood-Cuevas's welfare reform legislation fundamentally reshapes California's approach to handling benefit overpayments and program violations in public assistance programs. The bill shifts enforcement away from criminal prosecution toward administrative remedies while maintaining penalties for large-scale fraud.

The legislation eliminates criminal penalties for welfare fraud cases involving less than $25,000 and requires counties to verify that overpayments were not caused by system errors before pursuing any enforcement action. Counties must now have qualified caseworkers review recipient files for potential errors prior to reducing benefits or seeking repayment. The bill also prohibits criminal prosecution of recipients who are already in repayment status or subject to benefit reductions.

For CalFresh and CalWORKs programs, the measure restricts counties from establishing claims for overpayments that occurred more than 24 months before discovery. When overpayments result from administrative errors, benefit reductions are capped at 5% of the maximum aid payment. The bill mandates that claims be pursued through administrative processes rather than criminal proceedings unless federal law requires otherwise.

The legislation maintains existing criminal penalties for intentional fraud exceeding $25,000, unauthorized use of electronic benefit transfer cards, and counterfeiting benefits. Counties retain the ability to reduce current benefits to recover past overpayments, though recipients must receive advance notice and opportunity for hearing. Local agencies will receive state reimbursement for additional administrative costs imposed by the new requirements.