Colorado changes welfare rule, increasing benefits and costing taxpayers

By Arthur Kane | Watchdog.org

Temporary Assistance for Needy Families is six month less temporary in Colorado — and likely more expensive to taxpayers — after a state Department of Human Services rule change last year, a Watchdog.org investigation found.

The change has counties certifying a welfare recipients’ eligibility to receive benefits twice a year, records show. Previously, the full recertification was annual but recipients would submit monthly status reports to ensure they qualified for benefits and received the correct amount.

The new rule dropped the monthly status checks and required modifications to benefits in the six month period only if the recipient was due more — not less — money, records show.

After the change went into effect July 2013, counties have seen an increase in the number of people collecting welfare, and the state set a 24-month expenditure record in June for Colorado Works, which is what the state calls its TANF program, state records show.

State Sen. Kevin Lundberg, a Berthoud Republican who sits on the Senate Health and Human Services Committee, said he was not aware of the rule change or possible fiscal impact until Watchdog.org told him about it.

“Far too many agencies shovel out the money as quickly they can,” Lundberg said. “It’s the entitlement attitude that the agency is there to provide benefits and the more people who get benefits, the more successful the agencies are. They are not supposed to be sugar daddies.”

Levetta Love, director of its Office of Economic Security, defended the change as helping to reduce county workloads, allowing social workers to make sure recipients have the skills and resources to transition off welfare.

“We felt as a state that our customers needed to be able to stabilize before they were moved directly to a job… so that they would stay off assistance,” Love said.

Love said that while CDHS hasn’t done an analysis of whether the rule change is creating a net increase or savings, but staff estimates the rule change will save about $2 milllion a year in reduced paperwork, mailing expenses and staff costs by avoiding the monthly status reporting for reach client.

The change, which had been in the works for years, went through State Board of Human Services, which includes county commissioners, and there was a public hearing on the new rule.

Last summer, CDHS officials also justified the change as promoting “county workload reduction and increased economic stability among participants,” according to a regulatory analysis of the rule change filed with the Colorado Secretary of State.

The documents conceded the change could increase money going to welfare recipients and keep them on the program longer.

“In some circumstances, the Certification Period may result in a modest increase to a participant’s grant, or may lengthen time spent in the program,” the analysis portion of the document states. “Cost increases would be covered by the county’s Colorado Works block grant.”

But state figures show modest appears to be in the eye of the beholder or, in this case, bureaucrat.

When the rule change went into effect in July 2013, about $10.7 million in federal TANF money went to counties for Colorado Works recipients, records show. And while the amount fluctuates — sometimes wildly — month to month, by June of this year taxpayers were spending $16.8 million a month for Colorado Works, records show.

CDHS spokesman Dan Drayer said the department expected an increase in caseloads around the time of the change because of the Affordable Care Act bringing in more Medicaid recipients where they could also sign up for Colorado Works benefits.

“Because the ACA required individuals to have health insurance, there was an increase in traffic to apply for the state’s medical programs, which are accessed from the same entry point as are Colorado Works benefits,” he wrote in an email follow up.

More disturbing to Lundberg is that the rule is set up to allow benefits to increase in the six month certification period but not to decrease.

“(T)he proposed Certification Period would only require a county to act upon certain changes at the beginning of the period; changes that occur during the Certification Period itself would require no action, provided that the participant is still eligible to receive assistance in accordance with Federal and State TANF regulations, and no changes resulting in a grant increase have occurred,” the rule summary says. “Changes that do not affect basic eligibility, but might subject the participant to a grant decrease, would be acted on only at the beginning of a Certification Period.”

State Sen. Owen Hill, a Colorado Springs Republican who also is on the Human Services committee, said the likely additional spending isn’t appropriate.

“Rather than creating programs that allow and encourage people to stand on their own two feet, they’re spending taxpayers’ money with no accountability,” Hill said.

POLICY DEFENDER: Levetta Love, who oversees Colorado’s welfare programs, said the rule change was necessary to reduce county workload.

But Love said she can document savings at the county level because the status checks were eliminated.

“What I can calculate is savings to mailing, data entry processing time,” she said. “I just don’t know whether the counties invested that money back to clients.”

Caseload figures show major counties like Denver, El Paso, Pueblo, Arapahoe, Adams and Jefferson County added welfare recipients between July 2013 and September — though October showed slight decreases from September highs.

Jefferson County had the lowest increase of major counties of 118 more people, for a total of 1,165 Colorado Works recipients. Adams County grew the most at 287 additional recipients, for a total of 1,338 in September, records show.

SEEKING ANSWERS: State Sen. Owen Hill, R-Colorado Springs, promised to look into the fiscal impact of the rule change.

The economy improved in the past year, which some people believe should show a reduction in caseloads. But Love said Colorado Works clients are usually the last people to benefit from an economic upswing.

She also said the caseload figures may be misleading because the figures are noted at the beginning of each month and don’t show people who lost benefits after the monthly status reports but were able to prove eligibility after the first of the month under the monthly check-in system.

But Hill promised to look into the matter during the next legislative session.

“I have to talk to my colleagues,” he said. “There needs to be some real work looking into this.”