Testimony on SB 397: An Act Promoting Employment Advancement and the Economy by Addressing the Benefits Cliff

Human Services Committee

March 17, 2020

Submitted by: Stephen Wanczyk-Karp, LMSW

The National Association of Social Workers representing over 2,400 members is in support of SB 397. This bill will mitigate the problems that will arise as beneficiaries of income support programs reach the benefits cliff due to income increases from the higher minimum wage and other sources of income that increases a household or individual’s income without reaching the point of self-sufficiency.

The intent of increasing the minimum wage, receipt of the Earned Income Tax Credit and other sources of increased income, such as temporary increase in employment, is to assist individuals and families to move toward having sufficient income to rise above poverty. However, if such increased income causes a reduction or loss of public financial support so that the person or family is now no better off than prior to having their income increased, the effect is to disincentivize seeking improved employment or additional hours of employment. In essence the benefits cliff punishes those who are trying to better their lives economically.

SB 397 addresses this problem in several key ways: it creates a study of the effects of the benefits cliff; addresses ways to mitigate the effects of the benefits cliff; reduces the disincentive for seeking higher paid employment; eliminates the punitive family cap under TANF; increases access to child care; encourages public-private partnerships for ;increased employment opportunities, develops a benefits cliff calculator so that individuals can determine the impact of potential employment opportunities; and calls for the provision of information on employment training and support.

State policy must work toward helping all households to reach economic levels of self-sufficiency. This cannot occur however if we do not address the benefits cliff that gives added income on the one hand and because of that new income removes financial supports on the other hand. NASW urges the Human Services Committee to vote for a joint favorable passage of SB 397.

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