Glossary
Benefit cliff
A point where earning a little more money causes you to lose so much in benefits that you end up with less money overall.
A benefit cliff happens when your income rises just enough to make you ineligible for a program, and you lose benefits that are worth more than the extra money you earned.
Example: You earn $100 more per month. But that pushes your income over the limit for SNAP (the Supplemental Nutrition Assistance Program), so you lose $200 in monthly food benefits. You're now $100 worse off.
Benefit cliffs can affect many programs at once. For example, earning more money might make you ineligible for SNAP, Medicaid, child care assistance, and housing help in the same month.
This is why it's worth checking what programs you might qualify for before turning down extra work or a raise. Rules are complicated, and only the agencies decide eligibility.
Programs where this matters
Child Tax CreditInternal Revenue ServiceThe Child Tax Credit is a federal tax credit that may lower the tax you owe if you are raising qualifying children.EITCInternal Revenue ServiceThe EITC is a federal tax credit for people who work and have low to moderate income. It may lower your tax and add to your refund.LIHEAPHHS Administration for Children and FamiliesLIHEAP helps households with low income pay heating and cooling bills, and may help in an energy crisis such as a shut-off notice.LifelineFCC / Universal Service Administrative CompanyLifeline is a federal program that may give households with low income a discount on phone or internet service.MedicaidCenters for Medicare & Medicaid ServicesMedicaid is free or low-cost health coverage run by each state with federal funding, for children, adults, pregnant people, older adults and people with disabilities.SNAPUSDA Food and Nutrition ServiceSNAP gives monthly benefits on an EBT card to help households with low income buy food.WICUSDA Food and Nutrition ServiceWIC gives healthy foods, nutrition education and breastfeeding support to pregnant women, new mothers, infants and young children with low income.ACA SubsidiesCenters for Medicare & Medicaid ServicesPremium tax credits may lower the monthly cost of a health plan you buy through the ACA Marketplace.CHIPCenters for Medicare & Medicaid ServicesCHIP gives low-cost health coverage to uninsured children in families that earn too much for Medicaid.Child Care AidHHS Administration for Children and FamiliesChild care assistance helps families with low income pay for child care so parents can work, look for work, or go to school or training.Extra HelpSocial Security AdministrationExtra Help may lower what people with Medicare and limited income and resources pay for Medicare Part D prescription drug coverage.Head StartHHS Administration for Children and FamiliesHead Start and Early Head Start offer free early learning, health and family support services to young children from families with low income.MSPCenters for Medicare & Medicaid ServicesMedicare Savings Programs help people with Medicare who have limited income and resources pay Medicare costs such as premiums.Section 8US Department of Housing and Urban DevelopmentHousing Choice Vouchers, often called Section 8, help families with low income pay rent for a home they find in the private market.TANFHHS Administration for Children and FamiliesTANF gives cash help and support services to families with children who have low income. Each state runs its own program.Property Tax ReliefState revenue departmentsMany states offer property tax relief that may lower property tax bills for some homeowners, such as older adults, people with disabilities and veterans.SSDISocial Security AdministrationSSDI pays monthly benefits to people who cannot work because of a disability and who have worked and paid Social Security taxes.School MealsUSDA Food and Nutrition ServiceFree and reduced-price school meals help children eat well at school, and Summer EBT helps families buy food for children in the summer.VA BenefitsUS Department of Veterans AffairsThe US Department of Veterans Affairs offers disability pay, pension and health care to eligible veterans, and some benefits to their families.WeatherizationUS Department of EnergyThe Weatherization Assistance Program makes free energy-saving home improvements, like insulation and heating repairs, for households with low income.