by: Lily McMahan, Policy Research Intern at Goodwill Industries of the Southern Piedmont
Research has shown time and time again that benefits cliffs are one of the most prevalent barriers faced by working families to achieving economic stability and breaking the cycles of generational poverty. The benefits cliff puts families in a difficult position. While accepting a raise or promotion furthers career goals and provides more opportunity, individuals become de-incentivized to pursue these paths – feeding a family or paying medical bills are pressing needs generally aided by public benefits. Even so much as a 50-cent raise can push people abruptly out of their eligibility for benefits, resulting in the cliff effect. Rather than providing a transitional aid to overcoming the loss of public benefits, in reality, the system creates a reliance on the benefits that any career advancement is actually more harmful to the financial well being of the family. Goodwill Industries of the Southern Piedmont has launched an initiative called the Benefits Cliff Community Lab to confront these obstacles in North Carolina. Goodwill is one of many organizations who have identified this insufficiency in public benefits; across the country a variety of approaches, from advocacy to material transitional aid, are underway. Understanding what our neighbors across state lines are doing to combat the benefits cliff will provide more information, experience and connection as we work together to ease the impact of the cliff.
In our neighboring state of Tennessee, an initiative of the Tennessee Alliance for Economic Mobility (TAEM) called Our ChanceTN has identified the pressing need for public benefits reform. A $25 million grant received from federally allocated TANF funds administered by the state of Tennessee allows Our ChanceTN to pilot solutions for restructuring the TN Social Safety Net programs in seven counties in central Tennessee. They have decided to approach the benefits cliff issue by providing a “transitional benefit which will be paid directly for food, childcare, housing, and health providers to increase families’ access to fresh food, childcare, housing, and health care when a family’s net resources decrease due to the benefits cliff.” Additionally, family-centered coaching allows “participant families [to] define goals for every member of the family and receive consistent support from their dedicated coach to achieve those goals.” Eligible families in these seven counties are provided with two and a half years of financial coaching, monetary support, relevant resources during the transitional period out of the benefits program, access to education options and engagement with a benefits specialist. Our ChanceTN is one of many organizations that have developed a benefits cliff calculator, which analyzes how much money each family will receive from the program to stably transition them out of public assistance benefits.
Massachusetts-based Economic Pathways MA Coalition focuses their approach towards advocacy for policy change. They are focused on the pilot initiative passed in a June 2022 Act. The program, which wrapped up at the end of last month, “test[s] whether a cash payment is an effective tool for the Commonwealth to close the cliff gap” during times of career advancement. According to the organization, Maine, Minnesota, Colorado and Connecticut have all piloted similar, successful programs. While the Economic Pathway Coalition’s main focus relates to advocacy, they also provide various tools and information about managing benefits cliffs for those individuals affected.
New York City’s Leap Fund “serves organizations nationwide with tools and resources to identify benefits cliffs, surface eligibility, and facilitate benefits cliff conversations for informed decision making.” The program brings coaches together with people receiving public benefits within the organizations, helping educate as well as determining what cliffs will affect them and when they will occur. Leap Fund developed a calculator to help navigate the benefits cliff, including when people can expect to encounter and overcome it. They offer this service as a platform for coaching organizations to obtain and use in practice with individuals experiencing benefits cliffs. From January to December of 2021, they ran a test program regarding helping coach people through the benefits cliff with their tools – in 15 different states with 40 different organizations participating. The coaches they work with provide financial, employment, housing, workforce development coaching as well as case managers and social workers. Through this program, Leap Fund found that 63% of the clients they worked with shared the fear of encountering a benefits cliff was enough to deter them from accepting a raise or promotion. This underscores the importance of education and awareness about cliffs and strategic planning around cliffs. With Leap Fund’s help, 75% of their clients told Leap Fund they will go forth in some new career opportunity. Additionally, their work with benefits eligibility education enabled 44% of their clients to apply for a previously unreceived benefit. Leap Fund offers this program to employers to reinforce the strength and stability of their workforce. Not only will they help employers understand how benefits cliffs affect people within the employer’s operation, Leap Fund works with the employees at those companies to assess their financial health and how to best approach the benefits cliffs they may be facing.
Finally, The Source is a Michigan-based organization that partners with employers to identify and meet the obstacles faced by their employees. This organization was founded out of a desire from Mark Peters, CEO of Butterball Farms, to identify patterns and overcome barriers, such as child care accessibility, which had increased turnover at his company. The Source partners with employers to help with workforce retention by identifying and problem-solving the challenges faced in the lives of their employees, so employers can promote internal growth and aid in the overcoming of barriers to this goal. The Source provides a resource navigator that works directly with employees to help identify and meet the needs of the employer’s workforce. The program is so effective that they announce to employers that working with The Source results, on average, in a 250% return on investment. Benefits cliffs are often a challenge that The Source combats within individual companies, providing recommendations to employers about the best internal policies to adopt for reducing turnover and maintaining a thriving workforce.
The varying nature of the efforts of these organizations prove that the solution to overcoming benefits cliffs is multifaceted and requires many approaches. Easing the impact of cliffs can be done through advocacy work, as seen in the Economic Pathways Coalition and their piloting of a benefits cliff transitional support program. It also has a place in the human resources departments of corporate organizations, as Leap Fund and The Source have found that giving internal support to help educate employees and employers alike about benefits cliffs results in meaningful contributions for easing the cliff impact. Our ChanceTN proves there is a mathematical approach paired with personalized analytics and coaching that can be taken as well. As visibility around the benefits cliff grows and more organizations begin to address the issue – be it through political analysis, data collection, telling personal stories or imagining solutions – amplifying and sharing information between organizations will be crucial to working together to curb the benefits cliff through legislative change across the United States.
 Budget & Tax Center, “Addressing the benefits cliff for child-care subsidies in North Carolina,” Benefits Cliff Community Lab, accessed July 17, 2023, https://benefitscliffcommunitylab.org/wp-content/uploads/2022/09/BTC-Fact-Sheet_ChildCareAssistanceBenefitsCliff.pdf.
 “Act relating to economic growth and relief for the Commonwealth,” The General Court of the Commonwealth of Massachusetts, June 2022, https://malegislature.gov/Laws/SessionLaws/Acts/2022/Chapter268.
 “Benefits Cliff Coaching Program Beta Program Learning and Insights,” Leap Fund, pg. 6, March 2022.
 “Benefits Cliff Coaching Program Beta Program Learning and Insights,” Leap Fund, pg. 16, March 2022.
 “Benefits Cliff Coaching Program Beta Program Learning and Insights,” Leap Fund, pg. 19, March 2022.