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The Benefits Cliff Dilemma: Navigating Wage Increases and Public Benefits

Brief Wages & Benefits
April 1, 2023

This brief explored the perspectives of NYC home care workers who received a $2 minimum wage increase (bringing their minimum wage to $17/hour) and the effects that this had on their access to public benefits. Home care workers who receive public benefits are susceptible to benefits cliffs when their wages go up. The Financial Health Network worked with three organizations that serve low income workers in New York City for this study of 11 home care workers. To view the original source, click here.

Key Takeaways

Ten out of the 11 home care worker participants in this study had financial health scores that were less than the 2022 national average, which points to the financial precarity that many home care workers face.
Almost 2/3 of home care workers in study were using at least two kinds of public benefits to supplement their income, as most did not get employer-subsidized health insurance. These home care workers were limited in the hours that they were able to work and averaged 22.75 hours of work per week.
Most home care workers in the study did not know about the benefits cliffs despite being at risk of reaching it themselves. More transparency and awareness about benefits cliffs is needed for workers who receive wage increases.

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