Fraud Without Consequences? Democrat’s Bill Would Decriminalize Welfare Theft in California

A new bill in California is stirring major controversy for seeking to remove criminal penalties for certain types of welfare fraud. Senate Bill 560, introduced by Democratic State Senator Lola Smallwood-Cuevas, would decriminalize fraudulent welfare claims under $25,000—as long as there was no proven intent to deceive.

Supporters say the bill is about fairness. They argue that small mistakes—like missed paperwork deadlines or misunderstandings—shouldn’t land struggling families in court or jail. Instead, these low-level fraud cases would be handled administratively, not criminally, allowing the state to focus on large-scale scams and organized fraud.

The bill, set for a hearing on May 5, would also remove criminal charges for attempted fraud under $950, shifting even more cases out of the criminal justice system.

“Families should not be criminalized for clerical errors,” said Smallwood-Cuevas. “This is about giving people a second chance—not throwing them into a cycle of poverty and punishment.”

But not everyone is on board.

Critics warn the legislation could weaken California’s ability to crack down on fraud. They fear it will embolden abusers of the system, especially knowing they won’t face jail time for fraud under $25,000. With thousands of welfare fraud referrals made every year in counties like Los Angeles—and hundreds resulting in convictions—opponents say this could send the wrong message.

The bill comes as state agencies work to sort through legitimate errors versus deliberate fraud, especially within CalSAWS, California’s welfare processing system. If passed, county officials—not prosecutors—would decide whether benefits were overpaid due to system glitches or actual deception.

While Democrats say it’s a humane step toward reform, opponents argue it’s a dangerous softening of accountability. As SB 560 heads to its first hearing, it’s becoming a flashpoint in the debate over welfare, justice, and public trust.

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