Meaning of benefits cliff | Babel Free

Definitions

A situation that occurs when a small increase in wages results in a sudden decrease in net income, due to suddenly becoming ineligible for benefits.

Examples

“There is this issue of the benefits cliffs, where some programs are designed so just a very marginal increase in earnings can result in a loss of a very important benefit.”

“The benefits cliff is a paradox. For employees living in poverty, the real cost of higher minimum wage could be benefits lost and a few dollars gained.”

“A remaining downside with potentially big unintended consequences is the legislated proposal doesn’t yet adjust the spouse income test, excluding many couples where one earner loses their job and leading to a perverse and undesirable "benefit cliff".”

CEFR level