WHAT IS THE CLIFF EFFECT?
The Cliff Effect occurs when a pay raise at work triggers a disproportionate loss of government assistance. Even a small raise can “push people off the cliff” when it comes to benefits. Suddenly ineligible for subsidized food, housing, healthcare, or childcare, the family is worse off than before receiving the raise.
How is Circles resolving the Cliff Effect?
For seven years, Circles USA has been conducting research and developing tools to better inform families and policy makers about this barrier that too often keeps people trapped in poverty.
Circles USA recently produced a policy platform that provides local, national, and federal recommendations for mitigating the Cliff Effect.
In previous years, Circles USA prototyped a planning tool to estimate the income levels that prompt the loss of benefits. Additionally, several states commissioned our researchers to make recommendations. For Michigan, Circles USA produced a field scan of solutions nationwide. For New Mexico, our report included case studies that point to ways to resolve the Cliff Effect. Several Circles chapters also piloted an online calculator developed by Leap Fund. This tool helps recipients of public benefits understand whether they will hit a cliff, when it will happen, and how long it will take them to recover.
Partnership to address the Cliff Effect
Federal Reserve Bank of Atlanta’s Community and Economic Development department created three tools to uncover the barriers to, and opportunities for, improved economic mobility. These tools make the data easily accessible for community planning and decision-making. Circles chapters piloted these resources to better support those who are facing the benefis cliff.
For more information or to get involved, contact us.