Facing The 'Benefits Cliff': How A $1-An-Hour Raise Can Push You Over The Financial Edge | KERA News

Facing The 'Benefits Cliff': How A $1-An-Hour Raise Can Push You Over The Financial Edge

Mar 20, 2019

To avoid what's been dubbed the "benefits cliff," some workers turn down higher-paying jobs because it would disqualify them from public assistance.

"People can lose up to $500, $600 almost instantaneously for taking a $1 raise," says Shannon Rosedale,  opportunity assessment project coordinator for Catholic Charities of Fort Worth. The non-profit hopes a pilot program it has before the Texas Legislature will remedy that conundrum.

Rosedale answered some questions about the proposed program.

How the benefits cliff affects Texans

"One of the biggest things that we see with our clients is they've been working so hard, and then they get punished for taking that higher-paying job.

"It's not just that they lose a couple of dollars in benefits, and it's not just one benefit. We've had parents who, after spending months and months furthering their education, have accepted a job to find out they can't afford childcare yet — and the only way to get childcare is to go back on public benefits.

"So it's just an endless cycle. People can lose up to $500, $600 at a time, almost instantaneously for taking a dollar raise."

How the proposed pilot program would work

"It would test whether or not slowing the reduction — as people increase their wages, as they get a job — would help them succeed longer.

  • There'd be one control group where they would continue as normal. Nothing would change for them.
  • We'd have a first-treatment group, and those people would simply experience the benefits slowly reducing over time.
  • Then treatment group No. 2 would test slowing those benefits down, but pairing that experience with intensive case management.

"What we at Catholic Charities of Fort Worth want to see with our current work, and what we believe we will see, is that when you pair case management with the reduction, you no longer have somebody who's navigating the system, trying to get a job, then, you know, a tire goes out on their car and — what do they do? They can't get to the job, they lose that shift and now they're back at square one.

"So, even with the [gradual] benefits reduction, those life moments still happen. But when you pair it with case management, there's somebody to navigate that with you, to say, "You know, let's look at the options here, and let's see what else we can do."

On working with the Texas Legislature

"One of the biggest things about anti-poverty programs, a lot of them are so wrapped up in bureaucracy. There are so many hoops to jump through, there are so many different tests and requirements that you have to do. So we keep saying, you know, we don't necessarily want to expand the entire program.

"What we want to do is re-evaluate how we're spending funds, how people are being served. Every different individual on SNAP [Supplemental Nutrition Assistance Program] has different experiences, they have different backgrounds, they have different life events. We think that, if you treat them as individuals, we can see a lot more progress.

"If you look across the state of Texas alone, there are so many different [life experiences]. What somebody makes in El Paso is completely different than what it takes to survive in Tarrant County.

"So, we want legislators to see that what works for one person in Dallas doesn't work for somebody in Houston. [We tell them that], you all want to represent your constituents, and that's what we want to do — to make this more individual, more customizable for every person."

These interview highlights were edited for length and clarity.