In June 2024, the National Governors Association Children and Families team hosted the monthly Human Services Policy Advisors Institute Call on mitigating benefit cliffs and supporting upward economic mobility.
Background
A benefits cliff occurs when there is a gap between what someone will earn in a new position or job and the value of benefits lost due to increased income. Benefit cliffs are often sudden and unexpected, occurring with a small increase in earnings that does not supplement the lost benefits. These cliffs leave families with the choice between economic mobility and losing critical support. Several policy solutions can mitigate the negative impacts of benefit cliffs and help ensure a smooth transition from benefit programs to economic mobility and independence.
Speaker
- Beth Hamm, Deputy Commissioner, Maine Department of Health and Human Services
Key Takeaways
- New England states are tackling benefit cliffs with a “Whole Family Approach to Jobs”, supporting parents/caregivers, children, and family’s economic well-being.
- The Atlanta Fed partnered with Maine partnered to develop a customized a benefit cliff tool for the state .
- Benefit cliff tools are beneficial when they are accessible and easy to understand:
- Participants using the tool reported:
- Improved understanding of how wages impact their benefits,
- Increased financial self-reliance, and
- Afforded participants with more informed opportunities for long-term financial planning.
- Participants using the tool reported improved understanding of how wages impact their benefits, increased financial self-reliance, and afforded participants with more informed opportunities for long-term financial planning.
Presentation: Highlights from Commissioner Hamm’s presentation on Maine’s approach to tackling benefit cliffs.
- Maine brought together a “Whole Family” team, comprised of state agencies, parents, businesses, legislators, philanthropy, and best practice organizations – with the goal of analyzing benefit cliffs across the state ad breaking down silos across state agencies.
- The team’s work resulted the bipartisan passage of two pieces of legislation that expanded the state’s work to increase family economic mobility
- Assisting workers in being able to chart their own path forward is something the team recognized as an important step in this process, in addition to assisting workers in understanding how their benefits would change over time.
- Partnering with the Atlanta Fed, Maine worked to customize a suite of tools for the state and became an early adopter of the Benefit CLIFF Tool. The tools included the calculator (short-term planning), the dashboard (long-term planning), the planner (more room for customization), and the employer edition (not yet implemented).
- Maine is one of the only states to evaluate the tool, with seven Maine organizations piloting the CLIFF dashboard and gearing up to pilot additional tools soon.
- Through the implementation process, Maine learned that tools need to be easy to use and must be informative and encouraging to the user.
