It’s no secret that many North Carolinians rely on governmental assistance programs to make ends meet. But they often get caught in something called a “benefits cliff” that disincentivizes them from looking for more meaningful work and gaining independence.
Benefits cliffs occur when an individual, family, or household experiences a sudden, steep loss of government assistance as their income increases. This net loss perversely undermines the natural desire to earn more income because it takes a huge pay bump to overcome the cliff. The unintended consequences of a benefits cliff can be devastating—trapping individuals and families in a cycle of poverty.
Examples of this Catch-22 situation are far too common. Joyelle was a single mother of four who always paid her rent on time and made ends meet. But she was forced to flee an abusive relationship and live in public housing. Despite these challenges, she graduated from school and was offered a full-time job. Joyelle turned to shock when she soon realized that her new salary put her over the poverty line and she would lose her subsidized housing allowance—forcing her to pay nearly $1,000 a month in rent. After falling off this benefits cliff, Joyelle was forced to move but couldn’t afford to rent an apartment rent—even with her salary increase.