
Food stamps program a top opportunity for increasing access to work and savings for taxpayers

Food stamps program a top opportunity for increasing access to work and savings for taxpayers
Key Points
- SNAP’s benefit cliffs discourage work and career growth by abruptly cutting off assistance when recipients earn even modest income increases, trapping families in financial instability and reducing workforce participation.
- Proposed reforms aim to eliminate benefit cliffs through gradual benefit reductions, clear exit points, and adjusted benefit levels, encouraging financial independence without penalizing career advancement.
- Comprehensive SNAP reform benefits all stakeholders, empowering workers, stabilizing families, addressing labor shortages for businesses, and potentially reducing program costs by $30 billion annually.
Benefit cliffs discourage work and trap families in long-term financial struggles. A new policy solution offers a way out.
The Supplemental Nutrition Assistance Program (SNAP) is one of the largest anti-poverty programs in the U.S., providing over 41 million Americans with critical food assistance in 2024. But for many recipients, a system designed to support often ends up trapping—with significant barriers known as benefit cliffs.
These cliffs occur when small increases in income result in recipients suddenly losing their SNAP assistance, leaving them in a worse financial position for working more hours or earning an income boost. For example, a single parent’s modest hourly raise might lead to a benefit cut that completely offsets their increased take-home pay.
The negative ripple effects extend far beyond individuals and households. Benefit cliffs reduce workforce participation and make it harder for plenty of small businesses and industries to find the workers they need to grow and serve customers.
A new proposal for reform, developed with research by Erik Randolph at the Georgia Center for Opportunity in collaboration with Angela Rachidi of the American Enterprise Institute (AEI), offers a way to dismantle SNAP benefit cliffs and restore the program’s original mission—helping families achieve financial independence and stability.
SNAP’s design discourages career growth among recipients
SNAP is meant to help low-income families put food on the table. But the system unintentionally penalizes those who pursue better wages or career opportunities.
For many recipients, earning extra income—not just large raises but even modest increases as one gains skills or works more hours—means abruptly losing SNAP benefits altogether. Instead of slowly tapering down, benefits “fall off a cliff” as income rises.
This financial disincentive creates a dilemma for households relying on SNAP. While accepting additional shifts or applying for a higher-paying position could signify career growth, it may financially set them back without SNAP assistance offsetting basic expenses.
The economic impact is widespread. With fewer prime-age workers, employers encounter labor shortages, and their ability to operate efficiently is compromised. Workforce productivity also declines when workers are stuck in part-time, lower-skilled jobs rather than advancing to higher economic opportunities. The result is a cycle that makes it harder for families to break free from reliance on public assistance programs.
New SNAP reform proposals offer a way forward
Research by AEI and GCO outlines actionable steps to eliminate benefit cliffs while maintaining SNAP costs close to historical levels. These recommendations include changes to critical factors within the program’s structure to allow for a smoother, gradual reduction in benefits as income rises.
Key reforms involve adjusting the following elements of SNAP’s benefit system:
- Adjust participants’ cost-sharing responsibilities. The proposed plan would reduce the benefit reduction rate from 30% to 18%, making it easier for families to transition off benefits.
- Cost-sharing should begin as soon as income increases. Right now, deductions delay cost-sharing, which creates benefits cliffs when income limits run out. The new plan is a middle ground, starting benefit reductions earlier but at a lower rate. While it might lower benefits for many families, benefit cliffs are eliminated or reduced.
These structural adjustments effectively close the gap between earned income and benefit loss, removing financial penalties for participants who work more hours or accept higher-paying opportunities.
A win for workers, families, small businesses, and taxpayers
Simplifying and improving SNAP’s benefit structure solves major labor market challenges. For recipients, reforms encourage workforce participation and career advancement, empowering them to climb the economic ladder without fear of a financial setback.
For employers, these changes help restore a steady supply of available workers, addressing hiring difficulties in industries that rely on hourly, shift-based, or entry-level staff. Additionally, SNAP reform creates fiscal balance while allowing the government to save money long term—potentially reducing program expenses by 27% or $30 billion annually.
GCO continues to investigate ways to improve safety-net programs to help families escape poverty, and these recommendations for SNAP are an important piece of those efforts. Employment is one of the most reliable ways to break cycles of poverty, yet benefit cliffs trap too many families in stagnant economic conditions. Eliminating these barriers will strengthen the workforce, stabilize families, and create economic momentum that benefits us all.
Download the full report from American Enterprise Institute and Georgia Center for Opportunity here.