California runs the nation’s largest welfare system, devoting more than $180 billion annually to food, health care, and other programs for the poor and downtrodden. To sustain the arrangement, the state imposes the nation’s highest tax rates.

In theory, these programs are supposed to help struggling Californians. In reality, many serve large numbers of illegal immigrants. Today, California oversees a shadow welfare system that allows noncitizens to receive health care, rental assistance, college grants, tax credits, low-cost car insurance, and even smartphones on the taxpayers’ dime.

We visited four public-services offices in Southern California, each of which admitted that illegal aliens can enroll in public-welfare programs or receive benefits on their children’s behalf. In total, California taxpayers spent at least $11 billion subsidizing illegal immigrants in the last fiscal year. The state’s shadow welfare system, it seems, shows no signs of slowing down.

Local officials were remarkably transparent. In Glendale, we spoke to a welfare officer about California’s Cash Assistance Program for Immigrants (CAPI), a state-funded alternative to Supplemental Security Income (SSI) that provides monthly cash assistance to low-income noncitizens who are elderly or disabled. 

“If [you are] a citizen, you cannot get CAPI,” he said. “I don’t care about legal or not. Not being [a] citizen [is the key].”

In LA, we heard more of the same. We asked another welfare officer about the benefits available to illegal immigrants and their children. While some state programs are closed to illegals, we learned, they are open to those aliens’ US-born children. 

“If you were born here and the child was born here, you get money for two,” the officer said of CalWORKs, the state’s version of the federal Temporary Assistance for Needy Families program. “Because she is not and the child is, she only gets money for the child, and not for her.” 

These benefits add up. In California, illegal immigrants can qualify for CAPI, public health insurance, and various tax credits. Their children qualify for others, including CalWORKs and, as in other states, Section 8 rental subsidies. All told, a family of five in California with two illegal-alien parents, two US-born children, and one illegal-alien grandparent can receive public services worth more than $100,000 per year. 

State leaders are proud of it. In a recent podcast episode, Gov. Gavin Newsom bragged about his “controversial” decision to extend Medi-Cal coverage to illegal immigrants. His wife, Jennifer Siebel Newsom, encouraged people to sign up for the California Earned Income Tax Credit, a program whose promotional materials assure applicants that “no Social Security number” is “no problem.” 

The governor’s office did not respond to our comment request by deadline.

How is all this possible?

Federal law generally prohibits states from using federal dollars to serve illegal aliens. To dodge those restrictions, California created parallel state- and locally funded programs that allowed the state to extend benefits to illegal immigrants.

Medicaid is a good example. Federal law prohibits states from using federal dollars to provide wraparound coverage to illegal immigrants. So, California used a state-funding “bucket” within its Medi-Cal program to extend “full-scope” coverage to illegal aliens. The expansions enrolled some 1.7 million people, costing the state an estimated $10 billion annually — more than twice what the state legislative analyst originally projected. 

California also uses a distinct legal category that enables certain migrants to qualify for state programs. The state deems certain aliens to be “permanently residing under color of law” — living in California with the “knowledge and permission” of immigration enforcement — and allows them to use this designation to enroll in Medi-Cal, CAPI, and other government programs. In practice, because aged or disabled individuals are typically not deported, this means elderly foreign retirees can arrive in California and receive extensive benefits. 

Another way that California shuffles cash to illegal immigrants is through those aliens’ children. CalWORKs allows illegal-immigrant parents to receive benefits on behalf of their US-born kids. BenefitsCal, the state’s welfare clearinghouse, even tells applicants that the program will accept a “statement” that the applicant “intend[s] to file or [is] taking steps to become federally eligible” to qualify for the program. 

This model — permissive rules and large loopholes — costs the state billions per year. As benefits and eligibility continue to expand, that figure will only increase in the years ahead. California shows no sign of paring back this largesse.

In 2022, Newsom signed a bill into law that extended taxpayer-funded food benefits to illegal low-income residents. Beginning next October, qualified Californians 55 and older will become eligible for that program, regardless of immigration status. California’s Legislative Analyst estimates that it could cost up to an additional $400 million a year.

The state also has no citizenship requirements for various programs. California’s state-sponsored Low Cost Auto Insurance Program tells illegal-immigrant drivers that they may qualify for subsidized coverage “regardless of immigration status.”

In 2025, Newsom signed legislation banning California LifeLine — a program that provides free phones and cell service — from requiring applicants to produce a Social Security number.

As we walked around several LA welfare offices, we saw cellphone providers pitching California LifeLine plans. When we approached one provider, a representative told us that applicants can use a Mexican consular identification card to enroll. The program’s website confirms as much.

Between health insurance, cash transfers, and other programs, California’s shadow welfare system doles out generous benefits to illegal immigrants at taxpayers’ expense. Ordinary Californians, meantime, are depleting their savings, working long hours, and taking on tons of debt simply to pay the bills.

Under Gavin Newsom’s social contract, working Americans must not only contend with rising taxes and ballooning living costs but also bear the burden of financing benefits for illegal immigrants and their families.

In other states, citizenship establishes who qualifies for taxpayer-funded benefits. In California, citizenship merely determines who pays.

Christopher F. Rufo is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and the author of America’s Cultural Revolution. Kenneth Schrupp is an investigative reporter at City Journal. Austen Hufford is a senior investigative reporter at City Journal.

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