Connecticut lawmakers failed to pass a bill this legislative session aimed at mitigating the “benefits cliff,” when a small wage increase causes a person or family to lose public benefits equal to or greater than the raise.

Part of the bill called for a pilot program to eliminate the Temporary Family Assistance program’s asset limit and increase assistance to some households.

Melvette Hill, executive director of the Commission on Women, Children, Seniors, Equity and Opportunity, said the benefits cliff can affect families in multiple ways.

“Whether it’s through losing their childcare benefits, there’s a rent increase for their Section 8, if they’re losing TANF — Temporary Assistance for Needy Families — or SNAP,” Hill said.

The bill received heavy support during a public hearing, with many people saying families need help navigating unstable financial situations.

A similar bill was introduced in 2024 to create a two-year pilot program to provide subsistence assistance for people who had hit the benefits cliff. That bill also failed to pass.

The pilot program stems from a 2024 study that examined several options to help families. The study noted that the benefits cliff creates statewide economic challenges for employers.

Christina Morales, statewide coordinator for Connecticut’s Two Generational Initiative, said the cliff creates uncertainty for families trying to further their careers.

“Families are going to hesitate to accept raises,” Morales said. “They’re going to hesitate to increase their hours at work or pursue better jobs because of the potential benefit loss. And, if that’s happening, then it also affects employers who are also trying to maintain and build a stable workforce.”

A separate Connecticut Two Generational Initiative survey described a typical benefits cliff scenario: A single parent with two children was offered a 10-cent-per-hour raise by her employer, which put her over the eligibility limit for a childcare subsidy.

The $200 annual increase would have cost the parent $9,000 in childcare subsidies.

Source: Public News Service