7 Things Your Nonprofit Can Do To Help Your Clients Avoid or Escape the Welfare System

The working poor face a variety of challenges in attempting to escape poverty, but none is quite as mind boggling or discouraging as the disincentives to work that are ingrained in our country’s poverty relief programs.

At our organization, we call these “benefits cliffs,” points where minimal pay increases can lead to the loss of thousands of dollars in benefits. Our modeling of the problem in a dozen states – representing more than a third of the US population – shows us that the problem exists in many of the largest welfare programs and is made worse when a family is enrolled in multiple programs.

To make matters worse, for those receiving benefits, it’s not an easy thing to determine when they are likely to fall off a benefits cliff. Instead, it’s a bit of a guessing game that results in many recipients giving up working hours, pay increases, or promotions simply to avoid the possibility of a catastrophic loss in benefits.

If, like us, you counsel clients who are receiving benefits (or are eligible to receive them) and trying to earn enough to escape poverty, you probably wonder if there is anything you can do to help them better deal with the disincentives in the system. While there is no single solution or approach that works, what follows are some things you can do to equip your clients to make an informed decision and, hopefully, set the stage for reforming the system.

1: Knowledge is power

If your state is in our platform, you can use it to help your clients figure out when they are likely to hit cliffs and plan accordingly as they earn more money. To sign up, visit benefitscliffs.org/sign-up.

2: Find Alternatives

If you’re working with clients not already receiving welfare benefits, now is the time to see if there are other ways to provide help. In many communities, there are charities that can help with short- and long-term needs but without the negative incentives of the government system. Remember, once someone is receiving welfare benefits, it becomes very difficult financially – though not impossible – for them to leave the system.

3: Work First at Every Turn

For clients who are work-capable (and most are), promoting and helping them to find work is the most loving thing you can do. Work not only provides income, it offers dignity that comes from self-sufficiency—and much more. Work allows all of us to express our creative nature as God’s image-bearers. It allows us to serve the needs of others, can give us purpose, and helps us build social networks that make us resilient. If your organization serves emergency needs, consider partnering with an organization that can help your clients find employment. GCO’s Better Work team has helpful tips for doing this well. 

4: Plan for Raises and Negotiate

For working clients receiving benefits, the benefits cliffs model can help you see when the client will hit one or more cliffs as they earn more money through work. Depending on your client’s situation (family structure, etc.), the cliffs they face may be dramatic and costly, but not all are. Some cliffs are small enough that receiving a slightly higher raise can help a client leapfrog a particular cliff. If armed with this knowledge, it could provide clients with the information and incentive they need to ask their employer for more. For most employers, a slightly higher raise is far better than the costs associated with losing a good employee.

5: Benefits Can Make a Difference

The loss of childcare (CCAPs) and Medicaid benefits are two of the programs most commonly lost by welfare recipients as they earn additional income. Given the cost and importance of childcare and healthcare, it’s no surprise they are also the most difficult welfare benefits to give up. 

For clients with the looming loss of these welfare benefits, a strategy that points clients to employers offering childcare or healthcare benefits (or both) can help eliminate the impact of the client losing these welfare programs and allow them to continue moving up the pay scale. In the case of childcare benefits, it is also important to note that federal tax credits (and similar credits in many states) may exist to offset the cost of employer-provided childcare assistance.

6: Escape the System

There are numerous private and public options that provide workforce development  designed to help workers obtain training and certifications for high-demand industries. Right now, those jobs include many good-paying positions in healthcare, IT, logistics, and construction among others. Many programs will pay for the certifications and training needed to enter these fields and many of the certifications can be achieved in weeks or a few months. The best news is that most of these positions pay starting wages that make welfare unnecessary.

7: Become an Advocate for Reform

While the suggestions above can help your clients minimize the negative effects of the benefits cliffs, none solve the problem entirely. For that to happen, we need our state and federal leaders to understand the scope of the problem and hear our collective demands for reform. Some reforms can begin at the state level, but some must come from the federal government. If you want to learn more about our state and federal reform ideas, email me at ericc@foropportunity.org or download a summary of our suggestions here.

Eric Cochling is the Chief Program Officer and General Counsel for the Georgia Center for Opportunity, a True Charity member organization.

FROM THE TRUE CHARITY TEAM: We appreciate the perspective of our knowledgeable guest contributors. However, their opinions are their own, and do not necessarily represent positions of True Charity in all respects.