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.
Over the last several decades, there has been a growing awareness of the importance of supporting the social and emotional well-being of young children and their families. Through a public-private project, Building Strong Foundations for Families, Minnesota’s team developed policy recommendations to strengthen the infant and early childhood mental health (IECMH) system and recommended a systems map of the current system. These report recommendations were derived from interviews with 19 stakeholders representing the Minnesota’s early childhood mental health system, including advocates, state government staff, early childhood educators, mental health professionals, pediatricians, and others.
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.
We know that significant investments in working families and their children pay off for both them and our state. As we move through this moment of acute crisis, we lift up our shared values and use them as a guide for what comes next.
We stand in solidarity with our community today. The horrific killing of George Floyd at the hands of members of the Minneapolis Police Department is a shocking and painful reminder of how systems are often designed to hurt Black and brown people.