Voice of Business Blog

New York State spends billions of dollars on public assistance programs that inadvertently trap millions of people in poverty through a phenomenon known as the Benefits Cliff. It’s time to address this issue that perpetuates cycles of generational poverty by keeping individuals in low-income positions and hindering their ability to pursue career advancement opportunities. When employees must forego promotions or raises to maintain their benefits, they miss out on long-term career growth and personal development prospects. This worsens workforce challenges in New York and nationwide, contributing to labor shortages across a variety of industries.

Leaders in the New York State Legislature are pushing for systemic change at the New York State level. This brief is intended to highlight the key ways that the Benefits Cliff is being addressed in Albany.

Last year the FY24 Enacted State Budget included a one-time income disregard for individuals in an approved employment program whose income does not exceed the 200% federal poverty level (FPL). This policy allows individuals to retain full public assistance benefits for six months, allowing workers time to transition off of public assistance programs more gradually instead of losing all benefits at once when they’re even a single dollar over the limit.

While the 2023-24 Enacted Budget represents significant progress, there is still more to be done. This year, we have engaged in several meaningful conversations to build on the momentum of last year’s budget and create greater change for vulnerable New Yorkers. There are multiple bills on the table this legislative session that aim to mitigate the effects of the benefits cliff:

• S2144/A5875: This bill would exempt income earned by persons from certain job training or adult education programs from the determination of need for public assistance (PA) programs. A5875/S2144 would allow for a greater number of individuals to benefit from the six-month income disregard thereby helping more people work toward a better financial future. In turn, the need for PA benefits decreases which leads to significant savings at the local, State, and Federal levels.
  
  S2144/A5875 is currently in the Assembly Social Services committee. This bill passed unanimously in the Senate. Greater Rochester Chamber encourages organizations to express support for this legislation by sending a letter to Assembly Speaker Carl Heastie. Greater Rochester Chamber has provided a template available here.

• S8374: This bill removes the 200% federal poverty level requirement for recipients where it concerns the one-time disregard of earned income. The 200% income disregard makes progress in the right direction, but all individuals should be able to gradually transition off of public assistance programs rather than go off the “cliff.” While every individual and family’s budget is different due to several factors, 200% of Federal Poverty for an individual hovers right around the state minimum wage if working full-time.
  
  It was announced on Tuesday, May 7th that the bill is being reported from the Senate Social Services Committee to the Senate Finance Committee for review. This is notable progress for the bill and we are eager to continue to support this as the Voice of Business for Greater Rochester.

  Update as of May 20: This bill has been amended (S8374A) to increase the earning limit from 200% to 400%, rather than striking it completely as was proposed in the original language. This amendment also directs the Office of Temporary and Disability Assistance to seek any required federal waivers (i.e. TANF).

• S7830/A8431: This bill calls to establish a bi-partisan fiscal cliff task force to conduct a study on benefits cliffs in the state's public assistance programs. The task force created by this legislation would address these issues and make recommendations on strategies and legislation needed to reduce/eliminate these fiscal cliffs.
  
  S7830/A8431 also passed unanimously in the Senate and is currently up for discussion in the Assembly Social Services committee.

Greater Rochester Chamber extends our deepest thanks to Senator Roxanne Persaud for her leadership on this issue, and for sponsoring all of the above bills in the State Senate. We are eager to see the results of these important conversations surrounding the Benefits Cliff.

To learn more about the Benefits Cliff, please visit GreaterRochesterChamber.com/Benefits-Cliff. To learn more about specific policy issues you want to learn more about, please contact Greater Rochester Chamber Chief of Staff Marc Cohen at Marc.Cohen@GreaterRochesterChamber.com.