Poverty & Safety Net
Article

Three strategies to address Ohio’s ‘benefit cliff’

John R. Corlett
Visiting Senior Fellow
Additional Contributors
No items found.
October 17, 2022
Read time:
Download Fact Sheets
Register now
Share this resource
Subscribe to our Newsletter
By subscribing you agree to with our Privacy Policy.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Download this as a PDF

This Op-Ed was originally published in cleveland.com.

Many of us who study public policy as it relates to poverty have long talked about eliminating or reducing the “benefit cliff.”

The benefit cliff refers to that moment when low-wage workers are offered a raise or a promotion and turn it down because they don’t want to lose their childcare, health or nutrition benefits.

These benefit cliffs can be so severe that low-income workers may be temporarily better off financially by not advancing to take a higher-paying job.

The Federal Reserve Bank of Atlanta found that “these benefit cliffs can be so severe that low-income workers may be temporarily better off financially by not advancing to take a higher-paying job.”

These questions have become more pressing in light of the continuing labor shortage.

Public benefits such as childcare, Medicaid health coverage, housing vouchers and food assistance continue to help low-income working families meet their basic needs. In many cases, they make it possible to enter and stay in the workforce.

Public benefits keep nearly half a million Ohioans from falling below the poverty line.

Public benefits keep nearly half a million Ohioans from falling below the poverty line. It’s also important to keep in mind that in Ohio, someone working 40 hours per week for 52 weeks per year at minimum wage would still earn less than the federal poverty level for a family of three.

While nearly all public benefit programs have to follow federal rules and requirements, states do have some flexibility. In fact, both “red” and “blue” states are increasingly making changes to benefit programs and tax policies with the explicit intention of reducing benefit cliffs facing families.

That’s because fixing the benefit cliff is an issue that attracts conservative, moderate and liberal support.

There are three main strategies for Ohio to pursue:

  • The State of Ohio should consider expanding its Benefit Bridge Pilot program. This program began in Allen County to support low-wage workers with job-coaching assistance and financial incentives benchmarked to employment goals, as well as subsidized employment. Of course, any expansion should provide local communities with flexibility to design a program that meets local community needs.
  • Childcare is another issue to address. The pandemic showed the challenges which arise for employees and employers when childcare is disrupted. Ohio’s childcare subsidy eligibility rate is too low and needs to be raised to 200 percent of the federal poverty level. The eligibility threshold for families returning to the childcare subsidy program is too low. Parents are reluctant to take the risk of a new job if it means they can’t get their childcare subsidy back if things don’t work out.
  • Lastly, the Earned Income Tax Credit (EITC) is one of the most effective federal programs to reduce poverty and incentivize work. Refundable tax credits, including EITC, had the effect of pulling 5.3 million Americans out of poverty in 2020, most of whom were children and working-age adults.
Both “red” and “blue” states are increasingly making changes to benefit programs and tax policies with the explicit intention of reducing benefit cliffs facing families.

The good news is that Ohio has an EITC for state income taxes -- but it’s one of a small minority of states that don’t make them refundable. Making Ohio’s EITC refundable would help bridge the gap between where benefits end and where family-sustaining wages begin.

It also requires no additional state spending to implement and is the simplest way to address the impact of the benefit cliff.

By implementing these policies, we can show hard-working Ohioans that we support their efforts to move up by offering them a hand up to a better life.

Download Fact Sheets

District 10

Download

All Council Districts 2024

Download

District 4

Download

District 2

Download

District 11

Download

District 9

Download

District 8

Download

District 5

Download

District 7

Download

District 1

Download

District 3

Download

District 6

Download

West Boulevard

Download

University

Download

Union-Miles

Download

Tremont

Download

Stockyards

Download

St.Clair-Superior

Download

Old Brooklyn

Download

Ohio City

Download

North Shore Collinwood

Download

Mount Pleasant

Download

Lee-Seville

Download

Lee-Harvard

Download

Kinsman

Download

Kamm's Corners

Download

Jefferson

Download

Goodrich-Kirtland Park

Download

Glenville

Download

Fairfax

Download

Euclid-Green

Download

Edgewater

Download

Downtown

Download

Detroit Shoreway

Download

Cudell

Download

Collinwood-Nottingham

Download

Clark-Fulton

Download

Central

Download

Buckeye-Woodhill

Download

Buckeye-Shaker Square

Download

Brooklyn Centre

Download

Broadway-Slavic Village

Download

Bellaire-Puritas

Download

All Neighborhoods 2024

Download

West Boulevard Factsheet

Download

University Neighborhood Factsheet

Download

Union-Miles Neighborhood Factsheet

Download

Tremont Neighborhood Factsheet

Download

Stockyards Neighborhood Factsheet

Download

St. Clair-Superior Neighborhood Factsheet

Download

Old Brooklyn Neighborhood Factsheet

Download

Ohio City Neighborhood Factsheet

Download

North Shore Collinwood Neighborhood Factsheet

Download

Mount Pleasant Neighborhood Factsheet

Download

Lee-Seville Neighborhood Factsheet

Download

Lee-Harvard Neighborhood Factsheet

Download

Kinsman Neighborhood Factsheet

Download

Kamm's Neighborhood Factsheet

Download

Jefferson Neighborhood Factsheet

Download

Hough Neighborhood Factsheet

Download

Hopkins Neighborhood Factsheet

Download

Goodrich-Kirtland Park Neighborhood Factsheet

Download

Glenville Neighborhood Factsheet

Download

Fairfax Neighborhood Factsheet

Download

Euclid-Green Neighborhood Factsheet

Download

Edgewater Neighborhood Factsheet

Download

Downtown Neighborhood Factsheet

Download

Detroit Shoreway Neighborhood Factsheet

Download

Cuyahoga Valley Neighborhood Factsheet

Download

Cudell Neighborhood Factsheet

Download

Collinwood-Nottingham Neighborhood Factsheet

Download

Clark-Fulton Neighborhood Factsheet

Download

Central Neighborhood Factsheet

Download

Buckeye-Shaker Square Neighborhood Factsheet

Download

Brooklyn Centre Neighborhood Factsheet

Download

Broadway-Slavic Village Neighborhood Factsheet

Download

Bellaire-Puritas Neighborhood Factsheet

Download

All Neighborhoods 2016

Download

District 2

Download

District 1

Download

Ohio Women Statewide

Download

All Women Fact Sheets

Download

Wyandot Women

Download

Wood Women

Download

Williams Women

Download

Wayne Women

Download

Washington Women

Download

Warren Women

Download

Vinton Women

Download

Van Wert Women

Download

Union Women

Download

Tuscarawas Women

Download

Trumbell Women

Download

Summit Women

Download

Stark Women

Download

Shelby Women

Download

Seneca Women

Download

Scioto Women

Download

Sandusky Women

Download
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Download report

Subscribe to our newsletter

5 Things you need to know arrives on Mondays with the latest articles, events, and advocacy developments in Ohio

Explore the fact sheets

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique.

No Related Fact Sheets

Explore Topics

Browse articles, research, and testimony.

Poverty & Safety Net
Article

The Jedi public health approach and four more ways to address weathering

Natasha Takyi-Micah
October 7, 2024
Poverty & Safety Net
Article

Community Solutions supports annual Glenn Leadership Forum, October 18

Tara Britton
October 7, 2024
Poverty & Safety Net
Article

Data Days: Using data for civic engagement, social justice, and advancing policy 

Jason Kluk-Barany
October 7, 2024
Poverty & Safety Net
Article

Current state of Ohio’s state budget

Tara Britton
September 30, 2024
Poverty & Safety Net
Article

Populations growing and shrinking in Cleveland, by age

Emily Muttillo
September 30, 2024