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California’s vast wealth contrasts sharply with deep income inequality, leaving over a quarter of residents unable to meet basic needs without safety net support. Strengthening safety net programs is crucial to reducing poverty and ensuring all Californians can thrive.

California is home to vast wealth and has the 5th largest economy in the world. However, increasing poverty levels and deep income inequality make clear that not all Californians have access to this wealth. With the highest poverty rate in the nation, millions of Californians, many of whom are employed, rely on the state’s wide array of safety net programs to provide essentials like food, housing, and health care to meet their basic needs.

The COVID-19 pandemic exacerbated hardship for Californians with low incomes, but expansions in safety net programs showed promising progress in closing many long-standing gaps. As those expansions have concluded, the scars left by the pandemic are being highlighted. A recent study shows that persistently high inflation has disproportionately hit low-income Californians the hardest as prices for necessities, which make up the majority of their budget, have increased more than the average good.

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While measures of poverty are concerning, they underestimate true need. According to MIT researchers, to make ends meet in 2024, a single adult in California would need an hourly wage of $27.32, or about $57,000 in annual income, and a family of two adults with two children would need wages between $33.26 and $49.10, or between $69,000 and $102,000 annually. These estimates suggest that families in California need incomes well over 200% of the federal poverty level (FPL), or $30,000 for a family of one and $62,000 for a family of four, to meet their basic needs. As of 2023, over a quarter of Californians lived below 200% of FPL.

Reducing poverty and ensuring all Californians have sufficient resources to thrive requires a strong social safety net. The charts below paint a picture of who participates and is most affected by the safety net, where funding comes from, and how income thresholds interact with assistance amounts. An overview of some of California’s most utilized safety net programs shows that scope and income restrictions limit the impact and reach of these vital supports.

1. Participation in Safety Net Programs Does Not Fully Capture Need in the State

Millions of Californians participate in safety net programs. However, many people in need face barriers in accessing these programs due to the narrow eligibility criteria, income limits, and other bureaucratic red tape. Medi-Cal is the only program where participation exceeds the number of Californians under the 200% FPL, which is likely due to its relatively high-income eligibility for children and recent eligibility expansions. In contrast, CalFresh, the largest food assistance program in California, and the Earned Income Tax Credits (CalEITC and Federal EITC) only reach about half of Californians in need. Programs like the California Work Opportunity and Responsibility to Kids (CalWORKs), Supplemental Security Income/State Supplementary Payment (SSI/SSP) programs, and the Young Child Tax Credit (YCTC) are even more narrowly focused, serving only about a tenth of the population in need.

While some participants can receive assistance from multiple programs, the narrow eligibility scopes do not guarantee this. In fact, many Californians are excluded entirely or can only access very limited aid in times of need.

2. Strong Public Supports Help Reduce Poverty Among Communities of Color

Discriminatory policies and systemic racism have historically blocked Californians of color from accessing economic opportunities in California. Safety net programs serve as a mechanism to level the playing fields for these communities and close the gap created by the barriers placed before them. An overwhelming majority of the programs displayed below serve mainly Black and brown Californians, communities that face disproportionately high poverty rates.

Programs like CalWORKs play a crucial role in ensuring that these families and children have the ability to afford basic needs. Proposed cuts to and limitations imposed on these programs are particularly harmful to Californians of color and reinforce the negative impact of historic racist policies. The end of pandemic-era policies – which temporarily expanded many of these programs – demonstrates the real harm to Black and Latinx Californians and the increased hardship they face when California reduces funding for the safety net.

3. California Safety Net Program Rely on Both State and Federal Funding

California has led the nation in many ways strengthening its safety net. Federal dollars play a large role in supporting many of these vital services. Consequently, this means that many safety net programs are subject to federal regulations and susceptible to restrictions and cuts. CalWORKs, CalFresh, SSI/SSP, and Medi-Cal all received funding from both the state and federal government, with Medi-Cal receiving almost two-thirds (64.4%) of all federal funding that flows through the state budget.

In recent years, safety net programs, like TANF and SNAP — the federal names for CalWORKs and CalFresh — have been used as bargaining chips for conservative federal budget deals and have been put at risk of cuts and restrictions. California has historically invested large sums of state dollars beyond what is required to allow for eligibility flexibilities, as demonstrated by the creation of the California Food Assistance Program (CFAP) that extends CalFresh to certain non-citizens. However, if federal safety net funding is reduced, the state would need to backfill billions of dollars to maintain services, potentially jeopardizing these programs and limiting their impact.

4. Complex Income Requirements May Limit Programs’ Impact

Safety net programs, such as tax credits and cash/in-kind assistance, have specific income requirements that determine eligibility and the amount of aid provided. In many cases, assistance is inversely proportional to income, with those with the lowest incomes receiving the most help. However, both state and federal tax credits phase in and out at different income levels, with most phasing out at relatively low incomes. In the case of the Child Tax Credit (CTC), families with zero earnings are entirely excluded while high earners can receive the full credit.

Programs such as CalFresh, CalWORKs, Medi-Cal, and SSI/SSP have varying income thresholds depending on household size, typically offering more support to those with lower incomes. CalFresh generally serves households with incomes up to 200% of the federal poverty level, but the eligibility limits for other non-tax credit programs are much lower. This creates a challenge for individuals who earn too much to qualify for safety net programs but still struggle to meet basic needs, illustrating a clear gap where increasing income can push people out of eligibility without significantly improving their financial situation.

5. Safety Net Programs Provide Limited Assistance to Californians in Need

The amounts of assistance provided, along with income eligibility restrictions, highlight the gaps in California’s safety net. While the chart below shows the maximum aid available to program participants, not all households qualify for the full amount. For instance, the SSI/SSP program offers a higher maximum monthly aid than the other programs, but only families with zero earnings would receive the full amount, putting their income level well below what is needed to meet their basic needs.

Other programs follow a similar structure where cash or in-kind benefits are not added on top of earnings but are instead limited based on earning levels. In many cases, the bureaucratic process to apply for aid is cumbersome and discourages income-eligible Californians from accessing these programs. This is especially true considering that the assistance amounts are often insufficient to compensate for the costs of missing work to attend appointments or completing other steps of the application process, further discouraging participation.

Safety net programs are vital in ensuring that the most vulnerable Californians are given the opportunity to overcome systemic barriers stemming from discriminatory policies. The new Trump administration and Republican control of Congress promised to cut these programs and have the ability to further disadvantage already marginalized communities. In addition, income limits and restrictions imposed on programs limit the reach and impact these programs have on the most vulnerable Californians. However, pandemic-era policies, historic Medi-Cal expansions, and other wins in the safety net have proven that California policymakers have the ability to curb harm and enact policies that can significantly improve the well-being of all Californians.

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