Eliminate Benefits Cliffs

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Well Being In the Nation Network

People face a benefits cliff when they receive government benefits and then make more money. If they get a raise, they may end up making too much money to receive housing, food, child care or other benefits. But they are not making enough money to pay for all these basic necessities. People facing a cliff fear losing their benefits and being worse off. Since it's not clear when and why they might lose them, they may make decisions that hold them back. For example, people receiving benefits may not take pay raises or take on more hours at work. This means they may not advance in their careers. Black and Hispanic families are more likely to face these barriers. Program changes can reduce benefits cliffs. A mutual aid fund could be designed to help. The drop off could be less steep. Families could be better informed about these barriers and offered strategies to deal with them. Employers can also make changes to reduce the impact on lower-wage employees.

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Advancing Equitable Economies Policy Library
Published on 04/20/2021