Family Economic Mobility and Benefit Cliffs

Current as of:
Happy Mixed Race Family

Increasing Family Economic Mobility to Reduce Intergenerational Poverty through Addressing the Benefit Cliffs and Promoting Social Capital 

 

Intergenerational economic mobility is an ACF priority connecting ORO’s cross-program work to promote prosperity and economic growth in historically underserved communities. ACF supports efforts to collaboratively address the needs of children and families with low incomes to help break intergenerational cycles of poverty and poverty caused by unexpected hardship. Our activities support  holistic and integrated approaches help families achieve economic stability, upward mobility, and healthy child development. ACF elevates state and local solutions that have given low-income families the tools and opportunities that they need to transition from federal assistance to sustainable economic mobility. 

Through the strategic initiatives across our 10 regional offices, we:

  • Identify cross-cutting areas in policy and operations across federal programs that present barriers to intergenerational economic mobility, such as the benefit cliffs (link to Cliffs page here)
  • Foster closer collaboration between ACF’s Program Offices and the cross-cutting work of ACF’s Regions to work effectively with states, territories, tribes and other stakeholders. 
  • Create opportunities for peer learning, state-federal feedback, and policy/system innovations. The work should be intentional, innovative, and inclusive, taking into consideration the existing work of states, territories, tribes and other stakeholders. 
  • Put the family in the center as children, parents and elders span programs but intersect at home. 

 

Partnerships

ACF supports and promotes cross-sector approaches, leveraging innovative public-private partnerships so federal agencies can work together effectively with national, regional, state, territory, tribal, and local partners as well as public and private organizations to discuss local challenges, needs, and share solutions to increase intergenerational economic mobility, school readiness, food security and reduce poverty.

ACF works closely with several federal agencies within the Department of Health and Human Services (HHS), Department of Labor (DOL), Department of Agriculture (USDA) and others. Our non-federal partners on Economic Mobility include:

  • State Human Service Leaders
  • American Public Human Services Association
  • W.K. Kellogg Foundation
  • Federal Reserve Banks
  • National Governors Association
  • National Council of State Legislatures

 

 

Benefit Cliffs

 

What is a benefits cliff? 

A benefits cliff is the gap between what someone will earn in a new position or job and the value of benefits lost due to increased income. For some lower-income workers, even slightly higher income can mean the loss of hundreds or even thousands of dollars in public assistance benefits, such as child care, cash or food assistance, housing or Medicaid. Newly hired workers often decline employment offers because the decrease in family supports costs more than the employment gain. The wage is not enough to provide for the family and a transition plan of continuing but decreasing benefits, is lacking. 

 

What States Have Done to Address Cliffs

States are minimizing the cliff effect through policy and practice changes, such as: 1) phasing out benefits gradually, lengthening re-certification periods, permitting more earned income to be held onto in the shift to employment, or using sliding fee scales, 2) heightening eligibility limits or changing exit/loss of eligibility standards to facilitate a longer stay on benefits while working, and 3) using an array of tools to help parents and staff understand the interplay of public benefits and work choices with focus on family goals, financial literacy and navigating the cliffs. 

ACF understands the challenge of the benefit cliffs sits at the intersection of federal and state government. We are committed to raising awareness and increasing understanding of the cliff effect and its remedies among various constituencies — states, business, communities, non-profits and individuals. Our work on benefit cliffs supports federal-to-state and state-to-federal communication and learning on the cliff effect. ACF has integrated the voices of parents, business, and philanthropy to guide and strengthen this work. We have organized convenings, webinars, and ongoing learning communities and offer a range of resources to help states and communities build bridges over the cliff. 

 

Less Poverty, More Prosperity-States Tackle Benefit Cliffs Insights from Federal, State, Business, and Parent Leaders 

On January 4 and 5, 2024, ACF organized the Less Poverty, More Prosperity-States Tackle Benefit Cliffs convening, a first-of-its-kind discussion about the benefit cliffs and ways that federal agencies and the states may collaborate to improve family economic success. This convening was attended by 17 states and Washington, DC, and included important context from parents and business leaders, who shared their lived experience on how benefit cliffs restrict both family economic mobility and business growth. 

ACF expanded the dialogue with recorded interviews with federal, state, business, and parent leaders. These discussions aim to build on the momentum of the event by furthering the national conversation and actions needed to support individuals and families to diminish the cliff and build economic stability. 

Click the links below to view these insightful videos:

 

Resources on the Cliff Effect