What Is a Benefits Cliff? How a Raise Can Leave You With Less, and How to Find Yours

A benefits cliff is the point where earning one more dollar ends a benefit that was worth more than that dollar, so a raise leaves you with less money than before. Put your household in the calculator below and it finds the pay where each of your benefits ends, and how much more you would need to earn to come out ahead.

What is a benefits cliff?

A benefits cliff is a sudden drop in the money you have, caused by a small rise in pay. It happens when a program has a hard income limit: under the limit you get the full help, and one dollar over it you get none. If the help was worth $400 a month and the raise added $50, you are $350 worse off.

Most help does not end that way. It shrinks a little with each extra dollar, which is called a phase-out. SNAP, for example, takes about 30 cents off your food benefit for each extra dollar of income after deductions. A phase-out does not leave you with less money than before a raise, because you keep part of each dollar. A cliff does: for one step of pay, you lose more than you gain.

1. Your pay goes upA raise, more hours, a second job
2. Taxes take a littleAbout 7.65% for Social Security and Medicare, then income tax
3. Help shrinksSNAP, tax credits and marketplace help fall a little with each dollar
4. A limit is crossedSome help stops all at once at a set income: Medicaid, child care help, CHIP
5. The cliffOne dollar more in pay, hundreds less in help
6. The climb backThe pay where you are ahead again: the calculator finds it

Many families are on several programs at once, and each has its own limit. That is why the same raise can be harmless for one family and a cliff for another, and why a cliff can be at a different pay in each state. Nobody can see them all from the application forms. The calculator works every program out together, at every level of pay, for your household.

Which benefits have cliffs?

A program has a cliff when it stops all at once at a set income. These are the common ones:

• SNAP’s gross income limit. Most households must have gross income under 130% of the poverty line, 7 CFR 273.9 says; many states let households in up to a higher limit. One dollar over the limit, SNAP ends, even if the amount you were getting was large. For 1 and 2 person households in those states, SNAP pays at least $25 a month right up to the limit, then nothing.
• Medicaid and CHIP. Each state sets a limit for each group: babies, children, pregnant women, parents and other adults. Cross it and that person’s Medicaid ends. For a child, CHIP may take over; for an adult, the next step is usually a marketplace plan with a premium.
• The marketplace tax credit at 400% of the poverty line. For 2027 coverage, a household whose income is even one dollar over 400% of the poverty line gets no tax credit at all, under 26 U.S.C. 36B. The extra help that removed this limit for 2021 to 2025 was not extended. For an older person, whose premium is high, this is often the biggest cliff there is.
• Child care help. Each state sets an income limit for its child care help. Past it, the family pays the whole child care bill.
• SSDI and work. After the trial work period, earning over $1,770 a month in 2027 can stop the whole disability check, as the Social Security Administration’s 2027 notice sets the amount.
• WIC, school meals, Lifeline and energy help. Each has a hard limit too, though the help is smaller.

Some help has no cliff of its own. The Earned Income Tax Credit and the Child Tax Credit shrink slowly as pay rises. A housing voucher’s share rises by 30 cents for each extra dollar of adjusted income, and it ends only when your share reaches the whole rent. SSI falls by about 50 cents for each extra dollar of pay, after the first $85. These do not make a cliff, but they add up with taxes and other phase-outs.

How big can a cliff be?

It depends on what the help was worth when it ended. Here are two worked out by the calculator with this year’s figures.

The first is a single parent with two children (ages 4 and 8) in Illinois, earning $2,000 a month, paying $1,400 rent with heating and $900 a month for child care. At that pay the family gets $808 a month in SNAP, worked out with the federal rules and its state’s own. As pay rises, SNAP shrinks, but it does not reach zero before the state’s gross income limit for 3 people, because the family’s rent and child care keep its income after deductions low. At $3,758 a month the family goes over that limit and SNAP ends. Just below that point it was still getting $472 a month; just above it, nothing, so the family would have $471 less each month than just below the limit.

The second is a 60-year-old in Ohio who buys a marketplace plan, where the benchmark silver plan costs $1,100 a month (an example price). At $5,000 a month in pay, the tax credit pays $589 of the premium and the person pays $511 a month, 10.22% of income. At $5,321 a month, income passes 400% of the poverty line and the credit stops: they would pay the full price, and have $555 less each month than just below the line. The price is an example; the real one depends on your ZIP code and age, and HealthCare.gov’s tax tool shows it.

What is the difference between a cliff and a high tax on a raise?

Even without a cliff, a raise can be worth much less than it looks. Out of each extra dollar of pay, Social Security and Medicare take 7.65 cents, income tax may take 10 or 12 cents, SNAP may fall by 24 to 36 cents (30% of income after its deductions, which move as pay rises), and the EITC may fall by 16 to 21 cents. Together they can take more than half of the raise. People call this the effective marginal tax rate: the share of an extra dollar that does not reach you.

That is not a cliff, because you still keep something. But it means a raise of $1 an hour can add far less than $173 a month to what you have. The calculator’s “What if you earn more?” box works out exactly what a raise of your choosing would leave you, after taxes and every change in help, and says how many cents of each extra dollar you keep.

How do I find my own cliffs?

Fill in the calculator above: your state and county, who lives with you, what each person earns and gets, your rent and child care. The answer shows five things:

1. Your month: what comes in, each benefit counted as money, federal taxes and child care, and what is left.
2. Your next cliff: the pay, to the dollar, where a benefit ends and you would have less money than just below it, which programs end there, and the pay where you would come out ahead again. Under it, a line shows what you would have left in a month at every level of pay; a red drop in the line is a cliff.
3. What a raise leaves you: drag the slider to try a raise in dollars an hour, and see each change.
4. Where each benefit ends for you: your pay on one line, with the pay where each program ends.
5. What you can likely get, program by program, with what each is worth and where to apply.

The figures are estimates from the published rules. Offices count income over particular months, and some help has waiting lists or runs out of money, so only the office that runs a program can say for sure.

What can a family do about a cliff?

Knowing where a cliff is lets you plan for it rather than be surprised by it. A cliff is not a reason on its own to turn down a raise: pay that keeps rising usually carries you past it, and the calculator shows the pay where you come out ahead. What helps most is to see the whole picture before a change:

• Check how big the cliff is for your household, not a general rule. A $100 cliff and a $700 cliff call for different plans.
• Look at where you come out ahead. If a raise takes you just past a cliff, a slightly bigger raise or more hours may take you clear of it.
• Tell each program about a change in pay when its rules say to, and ask the office what will change and when. Each program has its own rules for reporting a change.
• Look at the other side of the cliff. When Medicaid ends for an adult, a marketplace plan with a tax credit may cover them; when SNAP ends, school meals or WIC may still apply.

Why do benefits cliffs exist?

Each program was written on its own, by different laws, with its own idea of who it is for and its own way of counting income. An income limit is the simplest way to say who qualifies, and it makes a cliff at the limit. Some programs phase out gradually, such as SNAP’s 30% rule and the tax credits; others still end at a hard edge. States set many limits of their own, so the edges are in different places in each state.

Figures checked October 31, 2026.

Questions people ask

Can a raise really make me worse off?

Yes, if it takes you over a hard income limit for help worth more than the raise. It is not common for small raises, but it happens, most of all with health coverage, child care help and SNAP. The calculator shows whether a raise you are offered does it.

What is the biggest benefits cliff?

It depends on the family. For many older adults it is the marketplace tax credit at 400% of the poverty line, because their premiums are high. For families with young children it is often child care help or children’s health coverage.

Is losing the EITC a cliff?

No. The Earned Income Tax Credit shrinks slowly as income rises and reaches zero gradually. It adds to the share of each extra dollar you lose, but it does not drop all at once.

Does working more hours have the same effect as a raise?

Yes. Programs look at how much you earn, not at your hourly wage. More hours at the same pay count the same as a raise.

Will I lose my benefits the day I get a raise?

Not always on the same day. Each program has its own rules for when you must report a change in pay and when the amount changes, so ask the office that runs it. The calculator shows where the cliff is, not the day it reaches you.

Does the calculator save my information?

No. It works in your browser and sends nothing anywhere. Close the page and what you typed is gone.

Updated November 1, 2026