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".”

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