Resources
Outreach + Awareness
Applying + Enrolling
Eligibility

Balancing at the Edge of the Cliff: Experiences and Calculations of Benefit Cliffs, Plateaus, and Trade-Offs

Balancing at the Edge of the Cliff: Experiences and Calculations of Benefit Cliffs, Plateaus, and Trade-Offs
2022
Urban Institute
Author(s): 
Theresa Anderson, Amelia Coffey, Hannah Daly, Heather Hahn, Elaine Maag, Kevin Werner
Balancing at the Edge of the Cliff: Experiences and Calculations of Benefit Cliffs, Plateaus, and Trade-Offs
Source Sector(s)
Non-profit
Benefits Program
TANF: Temporary Assistance for Needy Families
SNAP: Supplemental Nutrition Assistance Program
Medicaid/CHIP
Housing
CTC: Child Tax Credit
Level of Government
Federal/National
State/Provincial
Location
Colorado, Minnesota, New York
Format
Report

As family’s earnings rise, those earnings increases are often offset by declines in public assistance benefits (commonly called “benefit cliffs” when the declines are sharp) and increases in taxes owed. At the same time, refundable tax credits—which offset taxes owed and are delivered as a tax refund—can boost income. These interactions can be confusing and make it difficult for parents to anticipate how increasing their work hours, hourly wage rate, or both will affect their benefits, taxes, and income to support their families. This study estimates what happens to benefits and taxes when earnings increase and also explores how people perceive public benefit interactions, trade-offs, and benefit cliffs as they increase their work hours or earn higher wages.