Over a dozen $100 bills lay on a table inside the Lincoln Park Police Department during the annual Secret Santa in Lincoln Park on Thursday, Dec. 14, 2023.
Sacramento, California – California lawmakers are weighing a controversial proposal that would decriminalize certain types of low-level welfare fraud, igniting debate over how the state should handle financial offenses involving its most vulnerable residents.
Senate Bill 560, introduced by Democratic State Senator Lola Smallwood-Cuevas in February, would remove criminal penalties for welfare overpayments under $25,000 if the error stemmed from administrative mistakes or minor infractions. The bill also proposes eliminating criminal charges involving less than $950 for attempted welfare fraud.
Supporters say the legislation offers a more humane and cost-effective approach to addressing errors in the state’s complex welfare system. “This bill is about keeping families out of the criminal justice system for making administrative errors,” Smallwood-Cuevas wrote in an April 8 Instagram post. “It offers a smarter, more humane approach by allowing counties to resolve most overpayment cases administratively, holding people accountable without criminalizing poverty.”
Proponents argue that many fraud cases arise not from intentional deceit, but from issues like paperwork errors or glitches in California’s Statewide Automated Welfare System (CalSAWS). Criminalizing such minor overpayments—some as small as $25—can disproportionately harm low-income individuals who already face systemic obstacles.
However, critics say the bill could lead to widespread abuse of public assistance programs and erode public confidence in government systems. They argue that removing the threat of criminal prosecution may weaken deterrents against fraud and encourage individuals to exploit loopholes.
According to the California Department of Social Services, common welfare fraud includes failing to report income, listing ineligible or non-resident children, or concealing another parent living in the household. In Los Angeles County alone, investigators examine 15,000 to 20,000 fraud referrals each year. Of those, 5,000 to 8,000 have are believed to be fraudulent, and roughly 200 are forwarded to the district attorney’s office—with a 95% conviction rate.
The debate arrives at a politically delicate moment. Nationwide, Democrats are facing increasing scrutiny from Republicans and centrist voters who accuse them of being soft on crime. Measures like SB 560 may provide further ammunition for critics, particularly as the 2024 election season heats up.
The recently formed Department of Government Efficiency (DOGE), launched under the Trump administration and led by Elon Musk, adds complexity to the discussion. The department’s mission includes rooting out government waste and fraud, goals that some argue would be undermined by local agencies handling enforcement internally.
SB 560 is scheduled for a legislative hearing on May 5.
