Reforming the Welfare Benefits Cliff

Imagine you’re a single mom earning $47,000 a year (or $22.59 an hour) working full-time as an assistant manager at large department store. Your boss pulls you aside with great news; you’re being offered a $1,000 promotion to manager. But your heart sinks when you realize the raise will cost you at least $6,000 in lost child care subsidies because your income is now too high.

Reluctantly you thank your boss, but explain that you can’t take the promotion.

This is a hypothetical situation, but for many families it’s is all too real.

All of us can agree on the need for a social safety net. Unfortunately, some of the well-intentioned programs we’ve created have unintended consequences—specifically, a benefits cliff which discourages work and punishes success.

At this cliff, families can lose tens of thousands of dollars in benefits if they earn just $1 more through work. Too many families are being trapped in a broken welfare system, it’s time for a change.

Representatives Steve Bloom and Tom Murt have put together legislation to address the benefit cliff in child care subsidies.  The House Poverty Initiative, led by Rep Dave Reed and his team, identified the cliff as a barrier to success.

Our social service programs should reward and encourage success, not penalize it. By offering incentives for work and smoothing the benefit structure, we can help move families from poverty to prosperity.

As lawmakers move forward and debate this proposal, we have an opportunity to bring attention to the benefits cliff problem in many other programs. Hopefully, this initiative can become a model for reform, not only in Pennsylvania, but across the country and in Washington DC, which mandates many of the barriers to success.