Testimony In Support of HB1616 - A Bill to Increase Childcare Development Fund Exit Eligibility to 250% FPL
Good morning Chairman Frizzell, members of the committee: thank you for providing me with the opportunity to testify at today’s hearing. My name is Derek Thomas. I am a senior policy analyst for the Indiana Institute for Working Families. We combine research and analysis of federal and state legislation, public policies, and programs to help low-income Hoosier families achieve and maintain economic self-sufficiency.
With that goal in mind, I have a two-minute info-graphic video to illustrate the “cliff effect”—the benefit “cliff” that occurs when even a $0.50 increase in hourly wages leads to the complete termination of a benefit, and a dramatic net loss of resources. The unintended consequence of this design either leads to a disincentive towards economic mobility, or leads to a situation in which the parent or guardian is working harder, but is financially worse off (cue video).
As you can see, for low-income families working their way towards the middle class, and towards self-sufficiency – the ability to support a family without public or private assistance – mobility is stifled.