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THE CLIFF EFFECT:
ONE STEP FORWARD, TWO STEPS BACK


Read the full report here

 

Most often the single greatest barrier to self-sufficiency for low-income individuals is the “cliff effect.” Eligibility for work support programs such as Supplemental Nutrition Assistance Program (SNAP), and Child Care Development Fund (CCDF) are based on income. Generally, eligibility for these programs is below 200% of the FPG, with benefits phasing out as earnings increase. 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.

 

 

Legislative Activity

Testimony Before the Senate Committee on Family and Children Services
Support Testimony for SB 549, Removal of asset limits for SNAP food assistance program
Presented by Derek Thomas, Senior Policy Analyst, February 16, 2015

 

Testimony Before the Senate Committee on Family and Children Services
In Support of SB 129, Eligibility for child care voucher
Presented by Derek Thomas, Senior Policy Analyst, February 9, 2015

Testimony Before the House Committee on Family, Children and Human Services
In Support of HB 1616, Eligibility for child care voucher
Presented by Derek Thomas, Senior Policy Analyst, January 28, 2015

Testimony Before the House Committee on Family, Children and Human Services

Presented by Derek Thomas, Senior Policy Analyst, January 28, 2014

 

 

Cliff Effect Resources

Community Conversation – A Presentation on Restoring Economic Mobility for Hoosier Families
These 'Community Conversations' will also offer advocacy opportunities to Restore Economic Mobility at the Indiana Statehouse on January 29th at 1:00 PM.
Please visit our Facebook Events Page for a ‘Community Conversation’ Near You!

SNAP Asset Limit - November 2015

TANF Asset Limit – November 2013

Eliminating the SNAP and TANF Asset Tests Will Encourage Self-Sufficiency & Administrative Efficiency: 
1. Promote savings and encourage families to develop behaviors that lead to self-sufficiency.
2. Allow families to preserve limited resources (college or emergency savings) to avert financial disaster.
3. Increase government efficiency with substantial savings for taxpayers.

Child Care Development Fund – November 2013 Policy Brief
The ‘exit‐level’ threshold in the Childcare Development Fund design is responsible for the economic phenomenon known as the childcare ‘cliff effect’ - which occurs when a $0.50 increase in hourly wages leads to the complete termination of the benefit and a dramatic net loss of resources. This creates a disincentive towards economic mobility; a parent or guardian turns down the raise due to the prohibitive cost of childcare, or does accept the hard‐earned increase but is now financially worse off.3 By reforming income thresholds in the childcare development fund, policymakers can restore the most basic incentive for hard work - a raise that results in an increase in net resources - and provide Hoosier families with a smooth landing into economic self‐sufficiency.


Cliff Effect News

Journal Gazette (Fort Wayne, Ind.), 4/9/2015
Family Friendly: Chid-care assistance can still pass Senate

The StatehouseFile.com, 3/17/2015
Low-income families could keep child care help longer under bill moving in Senate

WCLJ TV 42, 3/13/2015
Joy in Our Town, with guest Derek Thomas, senior policy analyst with IIWF

The Journal Gazette (Fort Wayne), 02/20/2015
Family Friendly: House bill strengthens bridge to self-sufficiency

 

The Journal Courier (Lafayette, Ind.) 2/19/2015

Bill to expand SNAP eligibility dies in committee

 

TheStatehouseFile.com (Franklin, Ind.), 02/17/2015
Bill to help low-income Hoosiers with child care moves to Senate

 

TheStatehouseFile.com (Franklin, Ind.), 02/17/2015
No vote on bill to eliminate asset test for food help

 

TheStatehouseFile.com (Franklin, Ind.), 02/09/2015
Lawmakers hear concerns about 'cliff' effect for child care program

 

The Guardian U.S. - 7/20/2014

The Benefits Cliff - When Minimum Wage Increases Backfire

 

Salem Leader 02/13/14
More Indiana working mothers are low-income

kpcNEWS.com 1/26/14
Focus On Efforts That Help Families Transition Off Welfare

 

Joy in Our Town 12/20/13
Interview with Program Manager Jessica Fraser on the Institute's Cliff Effect Research

IBJ 1/19/2013
Advocacy group waging war against welfare 'cliff effect

Reuters.com 12/20/2012
The Unequal State of America
 – A Hoosier Falls off the Benefit Cliff 

CarrierJournal.com 11/25/2012
Advocates look at how poor are pushed over Indiana's benefits cliff

IndyStar.com 11/15/2012
My View: Indiana policies hurt middle-class growth

WBEZ 10/26/2012
Front and Center profile story on Cliff Effect