Fix the Benefits Cliff in Missouri
It’s Time To Give Missourians a Better Path Out of Poverty
Benefits Cliffs Are a Barrier to Lowering Missouri’s Poverty Rate
Imagine working hard for a raise only to find that it makes you financially worse off. This is the harsh reality many Missourians experience when they encounter a benefits cliff.
A benefits cliff—also referred to as a “welfare cliff”—occurs when a small increase in income triggers an immediate, substantial loss of government assistance. For most households, typical pay increases aren’t enough to make up for this loss in benefits. As a result, benefits cliffs are trapping 600,000 Missourians in poverty and government dependency, making it nearly impossible for them to have the educational, financial, and work opportunities they deserve.
The Impact of Benefits Cliffs in Missouri
Any individual or family trying to break out of poverty will eventually experience a benefits cliff. In Missouri, where there is a 13.2% poverty rate, benefits cliffs are a barrier to financial independence for these groups:
772,992
Missourians who are living below the poverty level.
19.3%
of African-American households live in poverty.
17%
of Hispanic households live in poverty.
14.1%
of Missouri women, who face a 2.3% higher rate of poverty than Missouri men.
The Real World Impact of Benefits Cliffs
AMANDA, 26-year-old single mother of two kids
Amanda’s Cliff:
$1 per hour pay increase = $2,000 loss in benefits
If Amanda accepts a raise of $13.52 to $14.52 per hour, her family will lose nearly $2,000 in essential benefits.
It’s Time to Fix the Cliff in Missouri
The best way to reduce benefits cliffs is to reform Missouri’s welfare programs so that government assistance gradually phases out as a person’s income increases. This approach empowers more people to improve their financial situation over time without being held back by the fear and hardship of losing essential benefits all at once.
Missouri policymakers and state agencies can begin solving the cliff problem by implementing new legislation, like Senate Bill 82.
Key Features of Senate Bill 82
Allows the state to fund a transitional benefit program so that SNAP and TANF recipients can have their benefits phased out as income increases.
Addresses cliffs in the childcare subsidy program by creating a scale of step-down payments.
Empowers Missouri to be one of the first states to use federal waivers and a pilot program to fix program design flaws, especially in SNAP and the childcare subsidy, that are causing the benefits cliff problem in the first place.
These reforms are a good start to help more Missourians break out of poverty, but other changes will be needed—like addressing Medicare, which is the single biggest driver of cliffs in Missouri.
Tell State Leaders to Fix the Cliff in Missouri
Everyone in Missouri should have a chance at success and self-sufficiency, regardless of their current circumstances.
Sign our petition to tell state officials to fix the cliff and create a better path for economic opportunity. It’s a simple but powerful way to demand change and support the most vulnerable in our communities.
The Cliff Effect:
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