benefits cliff

plural benefits cliffs · alternative benefit cliff

1. 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.

   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.

   2017, Pamela Hampton-Garland, Lisa Sechrest-Ehrhardt, Benson George Cooke, Socio-Economic and Education Factors Impacting American Political Systems, →ISBN, page 95

   2 more 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.

   2014 July 20, Jana Kasperkevic, “The benefits cliff: when minimum wage increases backfire on the people in need”, in The Guardian

   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".

   2020 March 24, Peter Whiteford, Bruce Bradbury, “Your guide to coronavirus payments for the extra million on welfare”, in The Conversation