The Cliff Effect occurs when families’ income increases enough that they lose eligibility for public assistance supports like food, childcare, and housing, but not enough to afford these on their own. 

The result is that an increase in wages leads to a decline in standard of living. It causes people to turn down raises and promotions and is a major factor in perpetuating multi-generational poverty.

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Example: Mary, a head of household with two children under the age of 8.

  • Mary earns $14 per hour, which is $24,430 per year after taxes.
  • Additional housing, childcare, and food assistance benefits worth $28,570 brings her net resources to $53,000.
  • Her net salary has now increased to $34,900!
  • BUT she loses $18,000 in benefits because of that increase.
  • Now her net resources are only $45,000, a decrease of $8,000 in net resources  even though she got a raise.

What are the impacts of the Cliff Effect?

"I constantly feared that increasing my wages would result in losing my benefits that were essential to caring for my family, but I wanted to make sure I was doing everything I could to care for my son and be a role model for him."
"I’ve been avoiding promotions for so long knowing that I would lose all this support, but I’m tired of it now. For years I’ve had to choose between job opportunities and buying groceries. I couldn’t save money. I didn’t grow because of it.”
"I was grateful for the support of public assistance but…it was also a hindrance sometimes…maybe I could get a housing voucher or a voucher for childcare, but if I made a little more money (even .10c more per hour!), I might lose those services, or my health care was threatened."
"I wanted to work again but was scared to do so because I knew that if I went back to full-time work I could lose a lot of help for my daughter…I lost half of the aid for my daughter. Six months later we stopped receiving any SNAP."
"It’s difficult because you make a couple dollars more an hour and your benefits are cut. You’re making less money than you were when you were on assistance so I can understand why people would go back to not working and just getting assistance. I remember crying."
“Eventually I was able to find childcare for my toddler, but only with the financial support of Dress for Success…Am I going to get a good enough full-time job that will sustain my family? Because if it pays too much I might not qualify financially for other supports and it will be an extreme struggle.”

The Bridge to Prosperity Pilot, which was passed by the Massachusetts legislature in the 2022 Economic Development Bill, would fill the gap and provide Mary with $8,000 as she continues to advance her career, allowing her to take the job!

Shayvonne website

Springfield WORKS is implementing the innovative three-year Bridge to Prosperity Pilot. We will work with up to 100 residents and their families across Massachusetts who are receiving any form of public assistance to attain higher-paying jobs and careers.

As participants’ income increases and the value of their safety net benefits decrease, the program will provide supplemental cash benefits to bridge the gap. Participants will also receive one-on-one career and financial coaching to reach their goals, and connections with several participating employer partners with living wage employment opportunities.