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This Forsyth Futures microsite highlights a phenomenon, commonly called the benefits cliff or the cliff effect, in which a pay increase results in a net loss of combined income and benefits.
This Forsyth Futures microsite highlights a phenomenon, commonly called the benefits cliff or the cliff effect, in which a pay increase results in a net loss of combined income and benefits.
Forsyth Futures studies our community to inform action by providing valuable context to community stakeholders and advocates on all levels. We believe that a better-informed community is empowered to advocate for the evidence-based policies and solutions that can improve quality of life for all in Forsyth County. Learn more at ForsythFutures.org
Let's dive in with the question, "how might the benefits cliff affect a Forsyth County resident?" Scroll through the slide shows below to see how the benefits cliff might affect Forsyth County individuals and families.
Hover over the slide and click the left and right arrows to navigate the slides.The benefits cliff occurs because many public benefits instantly stop at a given income threshold. Once a participant crosses the threshold, benefits plummet to zero. There is no gradual phase-out.
The benefits cliff occurs because many public benefits instantly stop at a given income threshold. Once a participant crosses the threshold, benefits plummet to zero. There is no gradual phase-out.
For many benefits, the income thresholds are set by the Federal Poverty Guidelines. Food and Nutrition Services, for example, abruptly terminate when recipients earn more than 200% of the guidelines. This explains why the folks in the examples above saw their benefits vanish with modest increases in earned income.
Benefits Cliff Key Findings
Benefits Cliff Key Findings
Benefits designed as slopes avoid the type of destabilizing income loss experienced with a benefit cliff. A benefit designed with a slope gradually reduces the benefit amount as earned income increases; whereas a benefit cliff involves drastic benefit reductions at specific earned income thresholds. The Housing Choice Voucher is a good example of a benefit slope.
In Forsyth County, the benefit with the single greatest number of recipients is Food Assistance (Food Stamps). With 25,079 Forsyth County families receiving this benefit, its associated benefit cliff may have the largest detrimental impact on our community.
Of the benefits examined in this microsite, the North Carolina Childcare Subsidy has one of the largest benefit cliffs. Explore the Benefits Cliff Simulator to better understand how individuals and families are affected by the sudden, drastic reduction in this benefit experienced as earned income increases. Check out the Index of Benefits for more information.
We have to work together to mitigate the detrimental impact of the various benefit cliffs experienced by Forsyth County residents. Solutions will require a sustained, multi-pronged, collaborative effort between business, government, non-profit, and grassroots leaders. Learn more about Pathways to Action.
Goals of the Benefits Cliff in Forsyth County Microsite
Goals of the Benefits Cliff in Forsyth County Microsite
Goal 1
Goal 1
Explain the benefits cliff (a complex topic) as clearly and simply as possible to provide context for community stakeholders.
Goal 2
Goal 2
Provide clear pathways to potential action that community stakeholders might take -- at a local, state, or federal level -- to mitigate some of the negative or disruptive effects of the benefits cliff. We also provide examples of action that other communities have taken.
Navigating this Microsite
Navigating this Microsite
The following section below (with a gray background) is designed to walk you through the content covered in this microsite, providing some context for each section. Click on any of the buttons or hyperlinks below to navigate to that section. Alternatively, you can access the main site menu by clicking on the menu icon in the top left corner of the page to navigate to any page in the microsite.
Understanding how income and assets affect the ability of families of different sizes to qualify for benefits:
Understanding how income and assets affect the ability of families of different sizes to qualify for benefits:
The Benefits Cliff Simulator -- an interactive dashboard that illustrates benefit thresholds for families of different sizes in Forsyth County -- is a great jumping off point in the benefits cliff discussion.
The Impact on Net Income page shows how the net income of different family sizes are impacted at specific benefit thresholds.
The Benefit Terminations page provides helpful tables with specific dollar-amount thresholds for each benefit.
Some benefit thresholds are based on assets rather than income; the Asset Limits page provides details on asset-based benefit thresholds.
Understanding the benefits cliff as a community-level issue and making connections to action:
Understanding the benefits cliff as a community-level issue and making connections to action:
The Community Impact page breaks down the numbers of households living at or below certain benefit thresholds, as well as the numbers of enrollees with specific benefits, in Forsyth County.
Forsyth Futures studies our community to inform action. We believe that information is a tool that our community can use to improve local conditions and enhance quality of life for all of our residents. The Pathways to Action page highlights relevant local, state, and federal policy issues that are connected to the benefits cliff, as well as strategies that other communities have implemented to achieve positive results.
Digging deeper:
Digging deeper:
The Index of Benefits page explains each of these benefits in detail and links to additional resources.
The Methodology page provides additional information and context on the data sources and methods used to generate this microsite.
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