Report: California Welfare Program Overpayments Total $848 Million

The California Work Opportunities and Responsibility to Kids (CalWORKs) welfare program has a total of $848 million in outstanding overpayments to state aid recipients, according to a recent report from the nonprofit California Common Sense.

The report, titled “California Welfare Overpayments: Fraud, Internal Errors, and Limited Investigation,” indicates that, as of March 2014, just 40% of the $848 million total has been recovered over the last decade. 

In FY 2012-13, “identified overpayments” to CalWORKs welfare recipients totaled $112.8 million. That money could have funded an additional 13,000 people in the CalWORKs program that year, according to the report.

CalWORKs enrollees and the program’s administrative officials are both responsible for causing overpayment errors, but “on average, CalWORKs beneficiaries cause 7,233 error cases annually, and the program’s administration causes only 1,752 error cases… Beneficiary-caused errors have led to an average of $1,400 in overpayments per case, whereas administrative errors have led to an average of $660 annually per case.”

The report concludes that, due to California’s “sluggish” economic recovery, the number of state welfare recipients remains high. The CalWORKs program is understaffed and ill-equipped to handle the number of cases, resulting in administrative overpayment error. However, a significant number of CalWORKs aid recipients are intentionally understating assets or misrepresenting their eligibility requirements to get more money from the program.

Governor Jerry Brown has been touting California’s economic “comeback” in the run-up to November’s midterm elections, but others are not as optimistic; the state still ranks first in poverty, eighth in unemployment, and 30% of all nationwide welfare recipients live in California. A recent report from Forbes predicts that the influx of illegal immigrants to California, along with the state’s crippling drought, will further exacerbate the state debt crisis.

Read the full report from California Common Sense here.