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Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20150&cosponId=17954
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House of Representatives
Session of 2015 - 2016 Regular Session

MEMORANDUM

Posted: April 1, 2015 02:05 PM
From: Representative Thomas P. Murt and Rep. Stephen Bloom
To: All House members
Subject: Smoothing the Child Care "Benefits Cliff"
 
While well-intended, government has inadvertently designed many human services programs to keep individuals trapped “on the system.” This leads to instances where individuals lose all or most of their benefits if they accept a promotion or additional work hours that even slightly increase their incomes.

These “Benefits Cliffs” exist throughout the entire Human Services benefits structure. As a first step to reform, our legislation will eliminate the cliff present in the Child Care Subsidy program by re-working the current co-payment-to-subsidy ratio.

Currently, parents pay a flat co-payment amount for their subsidized child care. As the parent earns more money, he or she eventually reaches an eligibility “cliff” in which earning one additional dollar makes the parent completely ineligible for the subsidy program.

This all-or-nothing system forces a parent to make a choice between the “best of two worst” situations. The parent can accept their $1 raise and become completely responsible for their child care payments, which they cannot afford with one additional dollar in pay, forcing the parent to find substitutionary child care or stay home and watch the child themselves. If they stay home, they will lose their job, therefore making the raise completely moot. The parent’s second option is to decline the raise, still remain able to work, keep their children in the same care, and continue to receive benefits.

Inherently, many parents make the intentional and rational decision to decline additional wage earning potential simply to keep their children in a care program while they work. In practice, this forces many parents to cap their own earning potential to keep their benefits in place, therefore becoming long-term beneficiaries of human services programs.

Our legislation will redesign this child care benefits structure to retain the temporary assistance given to families who need some help, while allowing individuals to earn their way out of poverty. Government should never dis-incentivize work, let alone force individuals to remain long-term beneficiaries of assistance due to poorly designed regulations. By changing these outdated co-payment structures to smooth the child care “Benefits Cliff”, we allow individuals to help themselves, therefore enforcing the original concept of the safety net: a structure which is not for long-term assistance but provisional, short-term help.

Please join us in co-sponsoring this legislation that incentivizes individuals to help themselves.





Introduced as HB1164