It will take everyone in our community working together to stop the negative effects of the benefits cliff. What can you do?
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What is the Benefits Cliff?
The Benefits Cliff (or Cliff Effect) happens when a person receives a pay increase and, as a result of that pay increase, they experience an overall loss of combined income and benefits. This happens because social benefit programs are designed in ways that create barriers that keep people from advancing financially. Many public benefits stop at a given income level; once a person crosses that level, the benefit amount drops to zero.
Benefits designed as slopes avoid the type of destabilizing income loss experienced with a benefit cliff.
A benefit designed with a slope gradually reduces the benefit amount as earned income increases; whereas a benefit cliff involves drastic benefit reductions at specific earned income thresholds. The Housing Choice Voucher is a good example of a benefit slope.
Of the benefits examined in this microsite, the North Carolina Childcare Subsidy has one of the largest benefit cliffs.
Explore the Benefits Cliff Simulator to better understand how individuals and families are affected by the sudden, drastic reduction in this benefit experienced as earned income increases. Check out the Index of Benefits for more information.
In Buncombe County, the benefit with the single greatest number of recipients is Food Assistance (Food Stamps).
With 17,152 people in Buncombe County receiving this benefit, its associated benefit cliff may have the largest detrimental impact on our community.
It’s important that employers in Buncombe County are aware of how different types of benefits are impacted at different wage levels. To get up to speed, follow the suggested steps below:
- To get started, learn about the benefits programs that your employees might be enrolled in.
- Next, gain an understanding of the relationship between benefits and wages and the Impact on Take Home Pay.
- Finally, consider sharing the Benefits Cliff Calculator with employees as a tool to understand in greater detail how a specific pay increase would impact their financial situation.
Knowledge is power. Getting off benefits can be hard. But advancing your career and economic mobility will help you and your family in the long run. Using this resource will help you prepare for what’s coming and give you a parachute to land safely over the cliff. Learn about the benefits programs that you might be enrolled in or eligible for.
The Types of Benefits page gives descriptions and overviews of the various benefit programs.
The Benefit Terminations page provides info on the income thresholds at which benefits are terminated.
It’s important that individuals who are in a position to champion community change understand the dynamics behind the benefits cliff that are impacting so many in Buncombe County. Change makers could be elected officials, organizational and institutional leaders, grassroots organizers, and others who are motivated to help improve the lives of local people. To get up to speed, follow the suggested steps below:
- Learn more about the Benefit Programs that people in Buncombe County are participating in.
- Next, learn about how various programs’ benefit cliffs are impacting people in Buncombe County.
- Learn about the overall impact of the benefits cliff on Buncombe County on the Community Impact page, as well as what other communities have done to begin to mitigate the negative impact of the benefits cliff.