Cliff Effect brief

The cliff, sometimes called the benefits effect, occurs when a family’s income increases above the income eligibility for financial supports. Income requirements force parents to choose between the needs of their child(ren) and income increases, leading to the potential loss of critical supports including Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), child care assistance, health care coverage, subsidized housing, and the Earned Income Tax Credit (EITC). This is a significant issue for families with low-incomes given that typically an increase in hourly wages is less than the amount the family loses in benefits.