Understanding “Benefits Cliffs”: Implications for Helping Washingtonians Advance to Self-Sufficiency through Workforce Strategies

The goal of workforce development efforts serving individuals in poverty is to provide them with the skills and credentials they need to increase their earnings in the labor market and advance to self-sufficiency. It is important for workforce stakeholders to understand that low-income families’ household income is often partly comprised of public benefits (such as supports for housing, child care, and health care) that phase out as increases in earnings are made through higher wages and/or more hours on the job. Rapid phaseouts of benefits – what are known as “benefits cliffs” – can have the effect of canceling out large portions of a family’s earnings gains, or even make a family substantially worse off from a self-sufficiency standpoint that prior to its earnings gains. This latest research by the Seattle Jobs Initiative examines the impact of benefits cliffs on low-income Washington families. The goal is to support workforce and social service providers in their efforts to better help these families to navigate the potential loss of benefits as they assist them to make earnings gains.