New program would allow workers to pursue career advancement without fear of having public benefits such as childcare stripped away
During the debate over the newly passed economic development and tax relief package, the Massachusetts State Senate approved Senator Eric P. Lesser’s amendment to allocate $1,000,000 toward establishing the Cliff Effect Pilot Program. “The passage of the Cliff Effect amendment is a tremendous victory for workers and families throughout the Commonwealth,” said Senator Eric P. Lesser. “During a time of great financial and economic uncertainty, we must encourage and reward workforce participation while making sure that we do not abandon our workers by stripping away public benefits too rapidly.”
The cliff effect describes when a worker becomes ineligible for public benefits because of a promotion or pay raise at work. Because the loss in government benefits far outweighs the modest pay raise, workers often are forced to decline promotions or opportunities for career advancement because their families would be worse off without essential benefits such as childcare or housing.
The amendment’s pilot program will send 100 individuals and families across the Commonwealth an Earned Income Tax Credit to close the cliff effect gap and reward workforce participation. The program aims to gradually phase workers out of public benefits as their wages increase while ensuring that the loss of these benefits does not negate the increase in wages. If successful, the pilot program can lead to a future economic ecosystem that incentivizes work and increases the quality of life for workers.
“As a firm believer in the social safety net, I am excited to work on maximizing its effectiveness and protections. Workers, mostly mothers, are making rational decisions to stabilize their household incomes. We need to incentivize broader career paths while helping them protect their access to childcare, housing, etc. I am so grateful that legislative leadership sees the value in these efforts,” stated Representative Patricia A. Duffy.
“The cliff effect legislation approaches the challenges those trapped in the cycle of poverty face by investing in opportunity,” said Representative Carlos González. “This hand up, not a hand out, approach will afford families with the equal access to success that everyone deserves and will save the taxpayer millions of dollars in the long run on social programs.”
“Many thanks to Senator Lesser for his leadership on securing funding for the cliff effect pilot program in the Senate Economic Development bill. A special thank you to Senator Gomez, the Western Mass Legislative Delegation, and the Economic Pathways of Massachusetts Coalition for their hard work in moving the cliff pilot forward. This bill is an important step in building a strong economy by removing obstacles for people as they earn a livable wage and grow in their careers,” stated Anne Kandilis, Director of Springfield WORKS/Western Mass Economic Development Council.
“We’re thrilled that the Cliff Effect pilot has been included in the Senate Economic Development bill, thanks to Senator Lesser’s leadership,” said Laura Sylvester, Public Policy Manager at the Food Bank of Western Massachusetts. “There are thousands of people in Massachusetts who cannot afford to accept raises or new jobs because the loss of their housing, food, or transportation benefits will leave them worse off. This predicament is a major contributor to food insecurity and keeps people from being able to advance in their careers. Massachusetts will now be the first state in the country to use the Earned Income Tax Credit to close this ‘cliff’, enabling people to have economic mobility and support their families.”