Solving the Benefits “Cliff Effect”

Governor Chris Sununu and the New Hampshire Department of Health and Human Services (DHHS) recently released "Helping Business Thrive and Families Prosper", a paper on the impact of the “Cliff Effect” on New Hampshire’s families and employers.

The Cliff Effect occurs when wages from a new employment opportunity do not make up for a family’s loss of state benefits, putting the family in a worse financial situation. The paper examines how these “benefits cliffs” keep families from climbing up and out of poverty and into self-sufficiency, the resulting workforce challenges for employers, and action steps for policymakers, employers, and other stakeholders to work collectively to end the Cliff Effect.

When children see their parents advance in a career, it forecasts their future expectations of themselves and their own families. To set that positive example for their children, working parents need access to safe and nurturing environments for their children as they grow. The absence of these vital community supports and benefits create the barriers that stop families from entering and succeeding in the workforce.

To begin breaking down these barriers, an initial Whole Family Approach to Jobs team has been convened, consisting of partners from the State of NH, including the Governor’s Office, the NH Department of Education (DOE), NH Employment Security’s (NHES) Economic and Labor Market Information (ELMI) Bureau, and DHHS; educational stakeholders, including the Community College System of NH; New Hampshire businesses; philanthropic organizations; community providers; and parents.

The Cliff Effect initiative complements the recent “Community Collaborations to Strengthen and Preserve Families” federal grant received by DHHS, which focuses on strengthening families, building parents’ capacity for self-sufficiency, and ensuring children are in safe and nurturing environments. It will also build upon initiatives including recent federal awards in affordable housing vouchers and planning for quality preschool; the State Opioid Response grant; increasing quality initiatives at Family Resource Centers; and the new 10-Year Mental Health Plan, among others. Each of these initiatives focus on strengthening families, making the State’s work to close the Cliff Effect critically important.