Benefits Cliff Broken Down and Low-Income Workforce Initiative Signed by Governor

House Republican bills addressing “American Dream” become law

HARRISBURG – After two-and-a-half years of community input, two pieces of legislation designed by House Republicans to greater assist those attempting to achieve the “American Dream,” were signed into law by Gov. Tom Wolf.

The legislation, co-sponsored by House Majority Leader Dave Reed (R-Indiana), encourages low-income families in Pennsylvania to earn their way out of poverty through educational supports and breaks down the current so-called “benefits cliff” for child care assistance programs.

House Bills 1164 and 934, which were both contained in the Human Services Code (Act 92 of 2015), reform two, separate programs, which were serving as disincentives to economic growth and self-reliance.

“In the attempt to help families in need, government sometimes adopts laws that have unintended consequences,” said Reed. “This new law makes the necessary changes so parents are not dissuaded from finishing their education or refuse a raise due to the loss of government benefits.

“These reforms are essential in helping families fulfill their own version of the American Dream – through hard work, playing by the rules, and working their way off the welfare system.”

In the past, families who earned more money eventually reached a so-called “benefits cliff” at which point even a slight increase in their income made them ineligible for services worth substantially more than the potential raise. This discouraged many families from accepting pay increases or working additional hours.

The legislation addresses this issue by increasing co-payments as parents earn more income. Under the new law, when parents reach the current benefits cliff, they would not be cut off from services. Instead, as they earn more money, their responsibility for the cost of services would increase until their income can support it entirely.

Additionally, the law redesigns the Keystone Education Yields Success Program (KEYS) to allow Temporary Assistance for Needy Families (TANF) and Supplemental Nutrition Assistance Program (SNAP) recipients the ability to graduate with associate degrees in a “high-priority occupation” at any of Pennsylvania’s 14 community colleges, a career or technical school, or a Pennsylvania State System of Higher Education university. High-priority occupations are classified as jobs Pennsylvania businesses desperately need filled that pay family sustaining wages.

Prior to the legislation, the KEYS program only allowed students to enroll in the program for one year – which was not enough time to complete an associate’s degree.

Therefore, many students dropped out of the program after one year. The legislative fix ensures students actually graduate from the program armed with the educational support they need to find an in-demand job with family-sustaining wages.

“The best anti-poverty program is a job with a family-sustaining income. With a small   programmatic fix to the KEYS program, a whole community is helped. Job seekers find jobs; job creators can fill long vacant positions; and community colleges connect with businesses to assess a community’s needs. It’s a huge win for Pennsylvania,” Reed added.

Reed, in his prior position as House Majority Policy Committee chairman, led the “Empowering Opportunities:  Gateways Out of Poverty” initiative, which held hearings across the state to gain a better understanding of issues related to gaining self-sufficiency and crafting legislative solutions to help fulfill the American Dream. Both bills grew out of the committee’s examination, which included input from community groups, nonprofits and municipal officials.

For more information on Reed and his legislative priorities, please visit www.repdavereed.net or www.Facebook.com/RepReed.

 

 

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