This measure amended CalWORKs rules in several ways. Firstly, it added financial management education to the activities, such as job search or job training, that recipients may perform in order to meet eligibility requirements while receiving assistance. It also excluded the principal and interest in a 401(k) plan, a 403(b) plan, an IRA, a 457 plan, or a 529 college savings plan from the asset limits that determine eligibility for support- ending the penalization of families who manage to save for college or retirement.

While current requirements were intended to prevent fraud within the system, it is becoming increasingly clear that penalizing saving and asset building actually prolongs poverty and keeps families on welfare longer. For more, see our Eliminate Barriers to Self-Sufficiency policy page.

Status:
This bill was passed by the Legislature and signed by the Governor on September 29, 2006. Our press release is here. Final text is available under 'Related Files.' Later legislative efforts amending CalWORKs eligibility rules included AB 167 and AB 1058.