The Welfare Cliff

The Problem:

Some welfare recipients are trapped in a poverty cycle from increased income pushing off the cliff of reduced benefits.

Image source: United Way of Central Iowa

 

The Solution:

Create a stair-step reduction of benefits instead of a cliff. 

Our Welfare System is Broken

Creating a path for people to work their way out of poverty should ultimately reduce public assistance costs as more individuals become financially independent and no longer need government assistance.

 

Individuals trying to work their way out of poverty struggle because benefits are reduced faster than their wages increase. This is particularly true for single parents relying on government assistance for childcare costs. Trapping people in a cycle of poverty is unfair for individuals trying to work their way out of their situation and off public assistance. It’s also costly for taxpayers, as individuals who could become net tax contributors are stuck in a cycle of being net recipients of tax dollars.

 

Creating a stair-step system to help people work their way out of poverty would help address the shortfalls in current public assistance programs. People should ultimately be financially better off by working and earning more money. Putting workers in a position where a raise could mean losing the ability to afford a rent payment is not a situation anyone should have to face. Creating a path for people to work their way out of poverty should ultimately reduce public assistance costs as more individuals become financially independent and no longer need government assistance.

Policy Solutions

Subscribe To Our Newsletter