The Benefits Cliff

in Forsyth County, North Carolina

It will take everyone in our community working together to stop the harmful effects of the benefits cliff.

What can you do?

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The Benefits Cliff is a condition in which a pay increase results in an overall loss of combined income and benefits. When a person experiences the Benefits Cliff, they suddenly have less money in their monthly budget to meet their household’s essential needs like food, healthcare, child care, and transportation, as examples.

This threatens their household’s financial stability, which can have a major, long-term, negative impact on their wellbeing. 

Many people in our community are exposed to harm from benefit cliffs and the Asset Building Coalition of Forsyth County (ABC) is committed to working to change these conditions. This microsite is designed to be a tool to advance our local work.

What is it like to Experience a Benefit Cliff?

Click the images below to walk through three common scenarios about how a benefit cliff might affect three hypothetical households.
Meet Samantha, a 24-year-old single mom with three kids.
Meet Jeremiah, a 19-year-old single adult with no kids.
Meet Ann & Taylor, a married couple in their mid-40s with three kids.

Quick facts about Benefit Cliffs

Some benefit programs are designed in ways that create barriers against upward mobility.

Benefit Slope

When benefits taper off slowly as income increases, this is called a ‘slope’ and it is characterized by a gradual change.

Example: Housing Choice Voucher

Benefit Cliff

On the other hand, a ‘cliff’ happens when a benefit decreases rapidly or is eliminated altogether once a recipient’s income increases beyond a specified amount.

Example: North Carolina Child Care Subsidy

The North Carolina Child Care Subsidy has the largest benefit cliff.

Of the benefits examined in this microsite, the North Carolina Child Care Subsidy has the largest cliff. In 2023, the Asset Building Coalition published a report that goes into depth about this benefit program and its associated benefit cliff titled, NC Child Care Subsidy Program Recipients Threatened by Benefit Cliff Complications.

Learn more about the benefit programs that are available in Forsyth County and the support they provide.

About 1 in 5 People in Forsyth County are Enrolled in Food and Nutrition Services (FNS)

With 72,474 people in Forsyth County receiving this benefit, its associated benefit cliff may have a large detrimental impact on our community.

What is the Benefits Cliff?

The Benefits Cliff threatens the financial stability of households with working people who receive public benefits. It is experienced when a person who receives public benefits gets a pay increase, and as a result, experiences an overall loss of combined income and benefits.

Income is money earned by working for a wage or a salary.

Income or Pay Icon

A Benefit is financial support received from a public program.

icon for public benefits

Such programs are designed as a social safety net to protect people against experiencing poverty.

A household’s monthly budget is their combined income and benefits.

Income or Pay Icon

Sustaining a monthly budget is key to sustaining financial stability. If a household’s monthly budget is thrown off, they risk not being able to afford basic needs like food, rent, child care, or transportation.

Sometimes, a pay raise earned at work can cause a decrease in the benefits a person receives. If this decrease is severe enough to cause a net loss in income and benefits, this is known as the Benefits Cliff.

Income or Pay Icon

What Can You Do?

What Can Employers Do?

The first step for employers in helping their employees navigate the benefits cliff is to learn more:

  • Learn about Benefit Programs that employees might be enrolled in and the income thresholds at which benefits are terminated.
  • Learn about the relationship between benefits and wages and the Impact on Take Home Pay.
  • Share the Benefits Cliff Calculator with employees as a tool to understand in greater detail how a specific pay increase would impact their financial situation. 

There are many ways that employers can work with employees to navigate the benefits cliff, beyond pay increases. The most important priority for employees is their overall take-home pay.

Incremental wage increases can cause a net loss in overall take-home pay. Employers should consider alternative ways to work with them as they grow in their careers, without impacting take-home pay. It’s important that employers work with employees to make sure they understand the approach being taken and give their consent.

Contribute to Employee's FSA/HSA

An employer could offer an employee a contribution to a health or dependent care FSA instead of a slight raise. In such a case, the employee’s income for benefits purposes would not rise.

Alternative Schedule

Consider schedule flexibility, reduced hours (keeping overall pay the same), or an increase in paid time off.

Additional Benefits

In the event of an overall net loss, alternatively, employers could provide lunches, child care or grocery stipends, connect to community resources (United Way 211), or bring resources (food bank, after-school care) to the workplace.

What Can Benefit Recipients Do?

Tips and Resources

The benefits cliff impacts everyone differently. Use the tips and tools below to help you navigate your experience with the benefits cliff.


Already working and nervous about how it will impact your benefits?

If you are currently working, don’t be afraid to take the next step in your career…Consider working with your employer to consider your hours, wage and benefits work together to determine the best path for advancement while working to get over the cliff.

Receiving benefits and exploring employment opportunities?

Upfront and open communication is always best! Talk with your caseworker.

Call 211

If you need new resources to help you handle a loss in any of your benefits, give 211 a call to help you learn about the resources available to you. Additionally, some organizations have emergency financial assistance

What Can Change Makers Do?

Elected officials, organizational and institutional leaders, nonprofits and foundations, grassroots organizers, and others can help mitigate the benefits cliff in Forsyth County.

The first step to creating change is to learn more: