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benefits cliff

noun

Definitions

  1. A situation that occurs when a small increase in wages results in a sudden decrease in…

    A situation that occurs when a small increase in wages results in a sudden decrease in net income, due to suddenly becoming ineligible for benefits.

    • There is this issue of the benefits cliffs, where some programs are designed so just a very marginal increase in earnings can result in a loss of a very important benefit.
    • The benefits cliff is a paradox. For employees living in poverty, the real cost of higher minimum wage could be benefits lost and a few dollars gained.

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sense glosses and etymology drawn from English Wiktionary · source · CC-BY-SA