House unanimously passes bill to analyze and address public benefits cliff

UPDATED: In an effort to help Kentuckians make sound financial decisions, legislation to offer more resources to support working families and create a task force to study Kentucky’s benefits cliff passed the House unanimously Friday.

House Bill 708, sponsored by Rep. Jonathan Dixon, would require the Cabinet for Health and Family Services to develop a proposal to make available a “benefits cliff” calculator to Kentuckians applying or reapplying for public assistance benefits. A benefit cliff is when an individual suddenly loses eligibility for a public assistance benefit due to a wage increase or because they took a job. The bill also establishes a benefits cliff task force with the Legislative Research Commission to conduct a comprehensive study of benefits cliffs in Kentucky and make recommendations to assist benefit recipients in transitioning to work and new career opportunities.

On the House floor, Dixon said many Kentuckians are ready to transition back into the workforce or advance their career but aspects surrounding public benefits they are receiving are holding them back which is why the calculator would be made available to the public to help make those decisions.

Kentucky Chamber President and CEO Ashli Watts testified in favor of the legislation in a committee meeting Thursday pointing to Kentucky’s workforce crisis and the need for a multifaceted policy approach. She said House Bill 708 is part of that solution as benefits cliffs are also a major barrier to work, higher wages, and new career opportunities for many Kentuckians.

Especially as the Commonwealth has seen higher wages across many industries and sectors in recent years, the benefits cliff is becoming a bigger issue, she stated.

“We have heard stories from numerous employers about challenges they have experienced with, for example, offering a worker a promotion and pay increase only to find out that it would cause them to lose a public assistance benefit like a child care subsidy,” Watts said. “Analyzing and addressing benefits cliffs is a key recommendation from the Chamber’s workforce report. This bill takes a strong step toward addressing this major workforce issue by working to make available a benefits cliff calculator to public assistance recipients in Kentucky and by taking a deep dive into how benefits cliffs affect workforce, wages, health, education, and poverty in the Commonwealth.”

Kentucky Chamber Senior Policy Analyst Charles Aull told the committee other states are taking action and implementing task forces to study these issues and create a tool for families, employers, and individuals to understand the implications of taking a new job, a pay increase, and other career decisions.

House Bill 708 passed the House 86-0 and now moves to the Senate for consideration in committee.