Preventing People – and Companies – from Falling Over the “Benefits Cliff”

For many employees and their employers, pay raises and the opportunity to work overtime hours at a higher rate of pay sound like positive opportunities. But what are opportunities for some are pitfalls for others—especially those who receive public benefits. That’s because earning more may render someone ineligible to continue receiving public benefits like healthcare and child care.

This is known as the “benefits cliff”—the point at which public assistance recipients would lose more in benefits than they’d gain in additional pay—and it was a topic of discussion at a recent meeting of the Employ Buffalo Niagara coalition.

How Employ Buffalo Niagara can help

The “benefits cliff” is complicated and difficult to navigate—especially for employers whose employees might unexpectedly decline a raise or the opportunity to work overtime hours.

If you’re unfamiliar with the “benefits cliff,” a recent Buffalo News article can help. Entitled “The Welfare Trap: Two Mothers, Two Choices, and Two Struggles for Self-Sufficiency,” the article paints a compelling story of two local mothers who are caught in the “benefits cliff” dilemma. It also helps explain what it means to live in the so-called “middle gap”—another name for the financial gap between self-sufficiency and reliance on public assistance benefits.

At the February meeting of Employ Buffalo Niagara, attendees discussed creating a “benefits calculator”—a tool that would not only educate employers, employees, and community service organizations about the consequences of employment changes, but provide them with information they can use to navigate the “benefits cliff.”

As the discussion moves ahead, an Employ Buffalo Niagara working group is looking into creating a “benefits calculator” that could help:

  • Address changes in federal income guidelines
  • Model how private-sector benefits can help those in the “middle gap”
  • Give policymakers insight on ways to lessen the impact of the “benefits cliff”
  • Ensure cross-sector participation in creating a tool that’s broadly useful

Calculator

About Employ Buffalo Niagara

Employ Buffalo Niagara is a unique, cross-sector coalition of more than 130 employers, spearheaded by the Buffalo Niagara Partnership, that effects systems change to lower barriers for the working poor, resulting in a more inclusive economy.

To learn more about Employ Buffalo Niagara, stay up-to-date on its work, and subscribe to the quarterly newsletter, click here.

Moyla Halimy Headshot

About Moyla Halimy

Manager, Workforce Development