In the state of Missouri, benefits cliffs refer to the point at which a person’s income surpasses the eligibility threshold for certain government benefits, causing a sudden loss of those benefits. The biggest sources of Missouri’s benefits cliffs include the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), and child care subsidies.

Overview of Missouri’s Benefits Cliffs Challenge

This cliffs phenomenon can create a disincentive for individuals to earn more income because the loss of benefits can outweigh the financial gain from increased earnings.

For example, a single parent with two children who earns $15 per hour may be eligible for SNAP benefits, but if their income increases to $16 per hour, they may suddenly become ineligible for those benefits, even though the increase in income is not sufficient to make up for the loss of benefits. This creates a difficult situation for individuals who want to improve their financial situation but are faced with the prospect of losing essential benefits.

Missouri has taken steps to address benefits cliffs by implementing the Cliff Effect Pilot Program, which is designed to provide transitional benefits for individuals who are approaching the eligibility threshold for certain benefits. The program allows individuals to gradually phase out of benefits as their income increases, rather than losing them all at once.

Additionally, policymakers in Missouri have considered increasing the eligibility thresholds for certain benefits to reduce the number of individuals who are impacted by benefits cliffs. By doing so, individuals can improve their financial situation over time without fear of losing essential benefits. 

Benefits cliffs can create significant challenges for individuals and families in Missouri, but there are efforts underway to address this issue and provide more support for those who are impacted by benefits cliffs.

Business Impact of Missouri’s Benefits Cliffs

While benefits cliffs primarily impact individuals and families, they can also have indirect effects on employers in Missouri. 

Missouri Cliffs and Employee Retention

Benefits cliffs can make it difficult for employees to transition off government benefits and into higher-paying jobs. This can lead to a higher turnover rate among lower-wage employees, increasing employers’ costs for recruiting and training new employees. 

Missouri Cliffs and Employee Absences

Individuals who lose essential benefits due to benefits cliffs may experience increased financial stress, which can impact their overall health and well-being. This burden can result in increased absenteeism among employees who are struggling to make ends meet.

Missouri Cliffs and Worker Productivity

Financial stress can also impact an employee's ability to focus and be productive at work. As a result, employers may see a decrease in productivity among employees who are dealing with the effects of benefits cliffs.

Missouri Cliffs and Skilled Workers

Employers in Missouri may struggle to find skilled workers if individuals are deterred from pursuing career advancement due to benefits cliffs. This can make it challenging for employers to fill positions that require specialized skills or knowledge.

Policy Approaches to Missouri’s Benefits Cliffs

The welfare reform efforts in Missouri have focused on implementing policies that encourage work and self-sufficiency among welfare recipients. 

Overview of Missouri’s Welfare Reform Efforts

Work requirements: Missouri has implemented work requirements for able-bodied adults without dependents receiving Supplemental Nutrition Assistance Program (SNAP) benefits. This requires them to work or participate in job training for at least 80 hours per month.

Time limits: The state has also set time limits for Temporary Assistance for Needy Families (TANF) benefits. Adults can receive benefits for a maximum of 24 months, after which they must work or participate in job training to continue receiving assistance.

Drug testing: Missouri conducts drug testing for TANF applicants with a history of drug use. Those who test positive must complete a treatment program to continue receiving benefits.

Childcare subsidies: The state has also expanded access to childcare subsidies for low-income families to help parents work and participate in job training.

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