Working Family Stability and Bridging the Benefits Cliff

Benefits Cliff is a systemic barrier that arises when a slight increase in income leads to a significant, sudden loss of public assistance, often resulting in a net decrease in resources. Benefit cliff is particularly evident in working families earning low- to mid-range wages. Workers and families facing the benefits cliff continue to live in cycles of poverty, experience significant instability in both their finances and daily life, and are held back from personal and career advancement. Solving the benefits cliff has positive outcomes for workers, their employers, and our communities. 

Working Communities Challenge (2020 to 2024)

The Greater Barre region received a three-year, $300,000 grant to implement an initiative that focuses on creating a nimble workforce development system that will lower the rate of single female head of households in poverty. Green Mountain United Way is the backbone organization for this work. The workforce development system will achieve economic stability and improved quality of life for the region’s single mothers for the mutual benefit of local businesses, communities, and future generations.

Challenge

In the city of Barre, 55.3% of single female head of households with children lived below the federal poverty threshold in 2018, a sharp 10% increase from 2016 and 2017.

While many demographics are impacted, single mothers face unique challenges in obtaining and retaining employment. These include limited transportation and child care choices, financial barriers, and lack of integration between service programs and employer policies and practices. Employee-focused service delivery and employer cultural change can help single mothers attain economic stability and realize their full potential for themselves and their children.

Strategy

  • The team will take the Working Bridges approach and deliver services at the place of employment. This involves using a navigator who works with employees and also focuses on employer policy and practice changes.

  • The team will build out the Agency of Human Service’s Children’s Integrated Services model to provide wrap around services and turn every organization’s case manager into a Working Bridges-type navigator. It will also collaborate with financial institutions to build a savings program.

Vision

To lower the rate of single female head of households in poverty by 15% in 10 years.

The Team

  • Green Mountain United Way

  • Barre Mayor’s Office

  • Community Economic Development, Capstone Community Action

  • Family Center of Washington County

  • Central Vermont Home Health and Hospice

  • Central Vermont Medical Center

  • Central Vermont Economic Development Corporation

  • Barre Area Development, Inc.

  • Community College of Vermont

  • Central Vermont Adult Basic Education

  • Vermont Agency of Transportation

  • Barre Partnership

For more information, visit the Boston Fed website.

The Benefits Cliff

This graphic shows the difference between what happens to food access and financial stability for someone hitting the benefits cliffs without support and those who are being supported by us as they experience those cliffs. There are many economic benefits that are affected by these cliffs and this is a snapshot of the domino effect of losing food benefits alone.

Making A Tough Decision

Josie was a Working Bridges employee who faced the benefits cliff. She was a single parent with 3 kids who worked full time for $24.08 per hour, and was offered a $1/hr raise for her hard work. But that raise bumped her just $34 over the monthly limit to receive food assistance; while her raise amounted to $2,080 more per year (before taxes), she lost $18,000 in food assistance. 

None of her options were great: she could decline the raise and keep her food assistance, but jeopardize her career; quit her job and find a lower-paying job; or use credit cards to buy food, with no plan for paying off the debt. 

Thankfully, Josie’s Working Bridges Resource Coordinator has solutions. She connected Josie with several food assistance programs that do not depend on income to qualify, including food shelves and Veggie VanGo, plus she received a low-cost CSA share. Together, these programs covered the loss in food assistance, so that Josie could accept the raise, advance in her career, and feed her family, all at the same time.