The new “Making Work Pay” bill may mean the end of the benefits cliff

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AUSTIN (KFDX/KJTL) On May 27, Governor Greg Abbott signed House Bill 1483, more commonly referred to as the “Making Work Pay Act,” into law.

This new, bipartisan Texas law holds the potential to fundamentally transform the way poverty is addressed statewide through a change in the way public welfare benefits are administered.

The legislation will address the fundamental problem in two welfare programs, Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance to Needy Families (TANF): the benefits cliff. This “cliff” is the immediate, disproportionate drop-off of public benefits that occurs when a wage earner from a family begins working or takes an incremental raise. The increased income is not enough to move them to self-sufficiency but immediately disqualifies them from receiving public benefits.

That lack of immediate financial gain and decrease in financial assistance results in families remaining in or re-entering poverty.

“We see clients turning down higher-paying jobs because the increased income would disqualify them from benefits that they still need to meet immediate and necessary expenses. Recipients then remain in public benefit programs long-term because of this gap,” Shannon Rosedale, Project Coordinator at Catholic Charities Fort Worth, said. “Like our client Sarah who has four kids, one with severe autism who requires in-home therapy. Sarah began a part-time cleaning job for less than $10 an hour — immediately losing more than $500 in public assistance as a result. Five hundred dollars that meant groceries for her children, a roof over their heads, and gas to get to work. In the end, Sarah quit her job because she could not afford to go to work. She just could not survive on her own yet.”

The Making Work Pay legislation creates a pilot program that tests whether a slow reduction of benefits, paired with wrap-around case management aimed at securing a sufficient-wage job; emergency savings; and debt management plan, will help clients reach long-term self-sufficiency independent of public benefits. The pilot also includes an external program evaluation.

“Working more hours or working for higher pay should never leave people worse off than they were before,” Representative James Frank, Wichita Falls, said. “This is why we need real reform. We must realign current government programs in a way that gives meaningful help to those who want to get out of poverty once and for all.”

The pilot will serve up to 500 recipients of TANF or SNAP for 24 to 60 months. There is also room to expand the program by 20 percent once the pilot is operational.

For more information about the bill, visit Catholiccharitiesfortworth.org

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