Missouri lawmakers<br />
Senate Bill 82<br />
public assistance provisions<br />
benefits cliffs<br />
Temporary Assistance for Needy Families (TANF)<br />
Supplemental Nutrition Assistance Program (SNAP)<br />
child care subsidy programs<br />
transitional benefits program<br />
poverty level<br />
state median family income<br />
welfare programs<br />
fiscal note<br />
Medicaid<br />
self-sufficiency<br />
workforce solutions<br />
government assistance<br />
economic opportunity<br />
dependence on the government<br />
benefits cliff phenomenon<br />
social and economic opportunity

Missouri is first state to pass law addressing benefits cliffs


Key Points

  • Missouri Leads the Way: The enactment of Senate Bill 82 establishes Missouri as the first state in the nation to address public assistance provisions, breaking ground in reforming safety-net benefits and combating the cycle of dependence on government support.

  • Benefits Cliff Challenge: The legislation acknowledges the pervasive issue of benefits cliffs, where individuals and families face a sudden loss of government assistance as their income increases. The law aims to mitigate this challenge by introducing transitional benefits programs in TANF, SNAP, and childcare subsidy programs.

  • Incomplete Solution: While the Missouri law is a commendable first step, there are concerns about its comprehensive effectiveness. The legislation, utilizing new funds, creates a supplemental program to ease the loss of benefits but doesn’t address underlying program variables contributing to benefits cliffs. Additionally, potential underfunding and the absence of Medicaid in the scope raise questions about the long-term sustainability and impact of the solution.

Missouri lawmakers recently took an important step toward helping poor and working-class residents escape safety-net benefits cliffs and experience the dignity and opportunity of work. By enacting Senate Bill 82, the Show Me State is now the first in the nation to address public assistance provisions that often entrap program participants by punishing work and perpetuating dependence on the government.

It’s no secret that many Americans rely on government assistance programs to make ends meet. But they often get caught in a Catch-22 situation—a benefits cliff—which disincentivizes them from looking for more meaningful work and gaining independence.

These benefits cliffs occur when an individual, family, or household experiences a sudden, steep loss of government assistance as income increases. Perversely, this net loss undermines the natural desire to earn more income because it takes a huge pay bump to overcome the cliff. The unintended consequences of a benefits cliff can be devastating—trapping individuals and families in a cycle of poverty.


How the new law works

This new Missouri law modifies benefits cliffs to enable residents to more easily earn additional income and experience the fulfillment and belonging that comes with social and economic opportunity. It does so by easing the loss of benefits in the Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP) and child care subsidy programs for families that lose income eligibility for these programs.

Specifically, this law establishes a transitional benefits program for TANF and SNAP—subject to funding from the state legislature—to help the transition off of benefits and reduce the impact of the program cliffs. The benefit is stepped down on a one-to-one basis as income increases.

It also helps to alleviate the loss of benefits from the child care subsidy program by creating a transitional benefits program using a sliding scale that steps down transitional benefits until the household reaches 300 percent of the poverty level or 85 percent of the state median family income.

When funded and implemented, this law will positively impact all individuals and families on the SNAP and childcare subsidy programs whose income exceeds program limits—but remain under income limits for the transitional benefits. It would not, however, impact TANF recipients because the program’s cash assistance tampers to zero, which means there would be no transitional benefits. 

And building upon the foundation laid in Missouri, other states should similarly experiment with creative solutions to the cliffs problem.

And building upon the foundation laid in Missouri, other states should similarly experiment with creative solutions to the cliffs problem.

The next step

While the new Missouri law is a commendable first step by a state to correct design flaws in benefit cliffs, there is still more work to do. For example, this legislation fails to address the variables in each program that drive the benefits cliff phenomenon in the first place. Instead, it uses new money to create a bridge that eases the loss of benefits when coming off designated programs.

Precisely because it uses new money, this solution represents a potentially huge and expensive expansion of welfare programs in Missouri. Indeed, the fiscal note accompanying the legislation estimates a cost of around $200 million per year in state revenue.

So rather than a comprehensive and holistic resolution to the benefits cliff problem, this new law essentially creates a supplemental program at risk of being underfunded in years when the legislature fails to fully fund at levels to meet demand—creating challenges for state agencies charged with program implementation. Moreover, the law doesn’t address Medicaid at all—the biggest driver of benefit cliffs in terms of dollar impact to families.

Despite these limitations, this new law recognizes that benefits cliffs are a real problem in need of a solution. And it attempts to address design flaws in two of the biggest-offending programs—SNAP and childcare. Finally, it recognizes the need to step down benefits in ways that eliminate cliffs as people earn additional income and learn to stand on their own with increasingly less dependence on the government.

In tackling the challenge of benefits cliffs, Missouri lawmakers have set the bar for other states to consider solutions to welfare systems that prevent people from becoming self-sufficient by holding them back from working as much as they could or should.

And building upon the foundation laid in Missouri, other states should similarly experiment with creative solutions to the cliffs problem. This includes waivers and other steps to address systemic program flaws. It also includes pilot projects to demonstrate how to eliminate cliffs with a net positive impact on those who work more, earn additional income and become self-sufficient faster than would otherwise be possible.

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