Mitigating the Cliff Effects
We have discovered that Circle Leaders who adhere to their plan earned an increased income of 181% on average. Even with this progress more work is needed. A person who is well below the national poverty level, and who receives an increase in pay, can still struggle to reach economic stability because of the current negative “cliff effects” built into public assistance programs.
That’s because public assistance ends when a person’s income increases to a certain level. The sudden loss of assistance programs such as SNAP, childcare or public housing can create what is known as the “cliff effect.” Oftentimes an increase of less than $50 a month can lead to the loss of several hundred dollars’ worth of programs. When the gain in income doesn’t cover the needs of their family once assistance is lost, it can cause someone to turn down a raise or even promotions.
Solution : Circles recognizes there are systemic barriers to escaping poverty, which is why we partner with and educate local and national policy makers. We help them understand the issues faced by families striving to move out of poverty. While we know that assistance programs are essential for people achieving economic stability, we view them as just that—assistance programs, not permanent, long-term support. We believe that assistance programs should be there in the time of need and are most effective if they are phased out as people earn enough income to cover these needs on their own. We advocate for changes in policy that eliminate the negative “cliff effects” in favor of the gradual reduction of supports throughout the entire journey out of poverty and to an economically sustainable future.