Flexible cash is what families need to be able to create a nurturing, stable platform from which they and their children can successfully launch. There are multiple ways to deliver flexible cash to families. CDF-MN is working on three: improving the cash assistance portion of the Minnesota Family Investment Program, guaranteed income pilots, and tax credits. In this brief we focus on tax credits.
One Step Forward, Two Steps Back: Addressing the Benefits Cliff Barrier to Family Economic Stability and Mobility
Many experts point to cliff effects as the primary reason low-income families fail to achieve self sufficiency. Cliff effects occur when benefits from public work support programs (such as medical assistance, SNAP, child care assistance, etc.) decrease or end completely as household income increases. Because program eligibility and benefit amounts are based on income, as families earn more money, public work support benefits phase out or end abruptly. Often the increased amount of income a family may receive by accepting a new job, getting a raise or increasing hours worked does not make up for the loss or decrease of benefits. The result is that families are stuck on a one-step forward, two steps back pathway that delays their progress toward economic stability and prevents them from successfully making the transition to self-sufficiency. Children’s Defense Fund-Minnesota recommends a variety of approaches that could be taken to address the benefits cliff challenges faced by struggling families. Using our Economic Stability Indicator (ESI) tool, we are able to build scenarios that allow us to analyze and evaluate potential solutions that would soften the impact of cliff effects.
We ALL benefit when children and families thrive, including those growing up in Black, Indigenous and communities of color. At Children’s Defense Fund-Minnesota, we believe everyone has a role to play in ensuring every child has a Healthy Start, a Head Start, a Fair Start, a Safe Start and a Moral Start in life and successful passage to adulthood with the help of caring families and communities. The Children’s Defense Fund envisions a nation where marginalized children flourish, leaders prioritize their well-being, and communities wield the power to ensure they thrive.
As COVID has upended our communities and families, Minnesota state and local leaders have responded with urgency and creativity. We at CDF-MN are ready to work with policymakers to continue the extraordinary leadership and vital investments in families necessary to meet this moment.
The 2018 Minnesota KIDS COUNT Data Book entitled "Building Community in a Time of Changing Needs" focuses on trends in key indicators of child and family well-being [...]