{"id":268017,"date":"2025-10-30T12:53:44","date_gmt":"2025-10-30T16:53:44","guid":{"rendered":"https:\/\/ncrc.org\/?page_id=268017"},"modified":"2025-11-07T09:49:07","modified_gmt":"2025-11-07T14:49:07","slug":"trapped-by-success-how-benefits-cliffs-undermine-economic-mobility-for-single-mothers","status":"publish","type":"post","link":"https:\/\/ncrc.org\/trapped-by-success-how-benefits-cliffs-undermine-economic-mobility-for-single-mothers\/","title":{"rendered":"Trapped by Success: How Benefits Cliffs Undermine Economic Mobility for Single Mothers"},"content":{"rendered":"\t\t
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Trapped by Success:<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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How Benefits Cliffs Undermine Economic Mobility for Single Mothers<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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October 2025<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Doug Mollett, <\/b>Economic Mobility\u00a0Manager
<\/em>Simon Wang,<\/strong> Economic Mobility Specialist
<\/em>Manan Shah,<\/strong> Policy Advisor
<\/em>Joseph Dean,<\/strong> Junior <\/em>Racial Economic Research Specialist<\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Introduction<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The National Community Reinvestment Coalition (NCRC) recently partnered with Share Our Strength to enhance the work of six community-based NCRC member organizations that are supporting single mothers through their unique workforce development, housing, small business and financial literacy programming. The six organizations are located across the following states: Florida, Louisiana, Mississippi, Ohio, Virginia and California. Over the past three years, NCRC has worked with these organizations via regular site visits, intentional convenings and technical assistance assessments to identify current problems and potential solutions facing single mothers attaining economic stability.<\/p>

One of the major challenges that was identified was the benefits cliff, which is when an individual\u2019s increase in their annual earned income can trigger the loss of important social assistance benefits, such as the Temporary Assistance for Needy Families program (TANF) and the Supplemental Nutrition Assistance Program (SNAP).<\/p>

The loss of benefits can make it difficult for single mothers to support their households, leading them to compromise their financial security to retain their social assistance.<\/p>

Through research analysis and direct engagement with our members, NCRC has developed key lessons and policy recommendations that could help reform the current benefits structure and offer single-parent households a concrete pathway towards economic mobility.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t

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How Benefits Cliffs Trap Single Parents<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Single parents face some of the most persistent barriers to economic mobility in the United States. With only one income to support an entire household, they stretch limited resources across housing, transportation,\u00a0child care\u00a0and food expenses.<\/p>

These issues affect many single parents and low-wage workers without children. However, women of color are especially impacted by the benefits cliff. Women of color are more likely to be single heads of household and are more likely to live in neighborhoods with fewer high-quality jobs, limited transportation and higher housing costs. Black women renters, for example, are\u00a0the most likely group to be housing\u00a0<\/a>cost-burdened<\/a>, with 60% spending at least one-third of their income on housing. The result is that many single mothers are more likely to be cost-burdened and often have no choice but to rely on public benefits to get by.<\/p>

Federal policy has long treated public benefits as conditional and tied to work requirements. While these programs are intended to support families, their design often reflects outdated assumptions about work instead of addressing the structural barriers that hold families back. High child care costs, limited affordable housing and stagnant wages are everyday realities for Single mothers households. Yet, benefits programs frequently penalize parents for modest income gains or for failure to account for the costs of raising children alone. Benefits should be structured as bridges to economic stability and mobility rather than barriers to progress.<\/p>

The benefits cliff occurs when a small increase in income results in a much larger loss of benefits, leaving families financially worse off than before. Our analysis shows that these cliffs most often appear at the income thresholds for the Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP) programs, with losses often totaling thousands of dollars. The cliff is especially steep when child care deductions are factored in because they temporarily increase financial support to eligible families but make the eventual drop-off more severe. These findings highlight the need for reforms, such as gradual phase-outs, income and asset disregards, better alignment across programs and policies that allow families to build savings while still receiving assistance.<\/p>

The Federal Reserve\u2019s community development arm (Fed Communities) outlined\u00a0real-world examples of the benefits cliff<\/a> in action against single mothers. A mother of two receives a $0.10\/hour raise.This $200 increase in annual income caused her to lose the $9,000\/year she was receiving in child care subsidies. In another scenario, a mother of four relies on SNAP benefits to feed herself and her children. She receives a promotion at her job and earns an additional $1\/hour. This additional $160\/month makes her ineligible for SNAP, with the mother losing $800\/month in assistance. These examples show the counterintuitive positions current policies put low-wage workers into \u2013 turning a raise or a promotion into reductions in their overall income \u2013 and reveal the disjointed nature of the economic ladder in the United States.<\/p>

Unfortunately, the experiences of these women are not isolated. In fact,\u00a0recent research<\/a> from Washington University in St. Louis\u2019 Center for Social Development suggests they are quite common. They found that out of the 40 million low-wage workers across the United States who receive public benefits, approximately 1 in 5 have had some sort of experience with the benefits cliff. Although these estimates do not speak directly to the experiences of single parents alone, another study from Oxfam<\/a>\u00a0indicates single parents are more likely to be low-wage workers, with 42% of working single parents making less than $17 an hour compared to 12% of partnered parents.<\/p>

The financial and caregiving responsibilities single mothers face place them at unique risk. They are nearly twice as likely as single fathers to experience poverty, with\u00a028% of single mothers living in poverty<\/a> compared to 15% of single fathers. They also remain concentrated in low-wage jobs with little opportunity for advancement.\u00a0Child care\u00a0stands out as the most pressing financial barrier, with costs that are unaffordable in many states and limited provider availability in others. These realities show that the benefits cliff is not only about income thresholds, but also about systemic failures in how we support families. The US Department of Health and Human Services (HHS) set a\u00a0child care\u00a0affordability benchmark of 7% of a family or individual\u2019s household income.\u00a0Recent studies<\/a>\u00a0have shown that single-parent households spend an average of 24% of their income on center-based\u00a0child care, more than triple the HHS benchmark.<\/p>

This report examines six states that reflect both high- and low-performing environments for single parent economic mobility. Using the Atlanta Federal Reserve\u2019s Policy Rules Database, we modeled benefits eligibility for a single adult with two children in each state. The results demonstrate where cliffs emerge, how they interact with wages and\u00a0child care\u00a0costs and how they influence household decisions. These findings are paired with policy recommendations and strategies that practitioners can use to reduce cliffs and strengthen the economic stability of families.<\/p>

Our goal is clear: Families should not be penalized for striving to get ahead. Public benefits must provide stability while parents pursue long-term opportunities. By centering single mothers in this analysis, we highlight both the urgent need for reform and the potential for solutions that benefit all low-income families by building a safety net that functions as a true bridge to opportunity.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Brief Overview of TANF and SNAP<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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There are several public benefits and tax credit programs intended to support low-income workers. Two of the most notable being the Temporary Assistance for Need Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP) programs. Both are cash assistance programs, meaning beneficiaries receive direct payments from the federal government. There is also a broader patchwork of safety net programs, including the Child Care and Development Fund (CCDF), the Housing Choice Voucher Program, the Low-Income Home Energy Assistance Program (LIHEAP) and the Medicaid\/Children\u2019s Health Insurance Program (CHIP). Together, these programs are often critical” instead of towards helping working families make ends meet from month-to-month.<\/p>

Here, we choose to focus on the cash assistance program SNAP due to methodological constraints and the more straightforward interpretation of their effect on families\u2019 balance sheets. Qualifying for any of these programs requires people to go through a confusing maze of paperwork and interviews for each individual program. For working families with jobs and children, the administrative burden and disconnect between agencies imposes additional time and energy constraints.<\/p>

Despite similarities in their direct impact on families’ budgets, TANF and SNAP are distinct programs and differ significantly in their respective designs. While states are responsible for setting income eligibility thresholds for TANF, SNAP eligibility is generally set at the federal level. This means that eligibility is not always aligned between programs, which can further complicate families\u2019 financial planning and lead to repeated benefits cliffs as they move up the income ladder and past the program\u2019s income limits.<\/p>

Eligibility is not only about determining who is allowed to receive assistance and how much for a given\u00a0income, but\u00a0also determining what counts as income. Employers deduct some of what you earn from your income to pay Social Security taxes to the federal\u00a0government,\u00a0with whatever is leftover being the number you see on your paystub. Adding up\u00a0all of\u00a0those lines on\u00a0all of\u00a0those paychecks at the end of the year yields a person\u2019s gross annual income, which is the number reported to the Internal Revenue Service every spring during tax season.<\/p>

However, a person\u2019s gross annual income is not always the number used to determine eligibility for SNAP or TANF because states can offer exemptions and deductions to families for expenses like\u00a0child care, housing and transportation. Deductions are intended to account for necessary expenses and ensure public benefits help support families beyond just the bare necessities needed to survive. After verifying an applicant\u2019s gross annual income and accounting for all applicable deductions, this net income is then used to determine eligibility for public benefits programs such as SNAP and TANF.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Key findings of state-level analyses<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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To better understand the SNAP benefits cliff, we deployed the Policy Rules Database model from the Atlanta Federal Reserve. To simulate the challenges a single mother would face dealing with the SNAP benefits cliff, we used a three-person household with two children as our family unit of measurement.<\/p>

All six of the\u00a0states\u00a0highlighted in this analysis structure SNAP differently. While all six share the same maximum benefit amount, they differ in their gross eligibility thresholds, or the point at which a household\u2019s income makes them ineligible for benefits. Because of these differences, the starting point and steepness of the SNAP benefits cliff varies by state. Without accounting for deductions (other than the 20% deduction of earned income and standard household deduction), SNAP benefits taper off as intended with a small cliff at the eligibility threshold point. It is with the introduction of deductions, particularly the childcare deductions, that the cliff widens dramatically.\u00a0Child care\u00a0costs are deducted from a family\u2019s net income, which raises the SNAP benefit amount. This larger benefit comes later as overall income\u00a0rises, but\u00a0also results in a larger benefits cliff.<\/p>

Figure 1 below shows the SNAP benefits cliff with all deductions, including\u00a0child care\u00a0expenses. Ohio has the most dramatic cliff with no phaseout rate and an abrupt benefits cut-off around 129% of the federal poverty level. A $1 increase over this point leads to a reduction of over $8,000 in benefits to a family of three.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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