A parent’s role is to provide their children the emotional and material support they need to thrive. But some struggle to meet their children’s’ financial needs through low-wage jobs. These families often turn to public assistance programs to help fill the gap.

However, securing public assistance doesn’t guarantee stability. If a family’s earnings increase while they are enrolled in assistance programs, they may face a benefits cliff. In other words, they would lose a large share of benefit support relative to new earnings and may even be worse off financially than before their earnings increased.

These changes in benefits can be difficult to predict. Adding complexity, parents whose earnings rise might begin to owe state and federal taxes, or tax credits might boost income. These tax changes are also hard to predict.

Our new study of Temporary Assistance for Needy Families recipients in Colorado, Minnesota, and New York highlights parents’ challenges as they consider working more because of benefit instability. Their experiences show that parents with low incomes need more stability and certainty in their benefits as they work more to support their families.

  1. Income from earnings alone is not enough for many parents of young children to afford their families’ basic needs.
  2. The benefits and tax systems are confusing, and it can be difficult for families to anticipate how changes in earnings will affect the supports they receive.
  3. Families often can’t stabilize their budgets through work because their benefits are uncertain.

Read the full article about benefits cliffs by Amelia Coffey and Hannah Daly at Urban Institute.