Heather Newcomb knows what itโs like to fall off a cliff.
Not literally, but eight years ago, struggling to make ends meet, Newcomb received money through a state assistance program known as Reach Up. When her employer offered a 25-cent raise, she hesitated to take it, unsure how it would affect her benefits.
She took the raise, which gave her an extra $40 per month, but as a result she lost $100 per month in benefits.
โTaking a raise actually left me in the hole $60 per month,โ Newcomb said.
Legislators this session acknowledged that โbenefits cliff,โ and passed a law to try to cushion the fall.
The bill, which squeaked through in the final hours of the legislative session, is a scaled-back version of the original. However, it provides two changes advocates say will make a big difference for families working their way out of poverty.
The bill increases the amount Reach Up families may earn from a job before their government benefits shrink. It also increases โ from 12 months to 24 months โ the length of time a family coming off Reach Up qualifies for a child care subsidy.
Christopher Curtis, an attorney at Vermont Legal Aid and co-chair of the governorโs Pathways from Poverty Council, pushed for the bill. โAny movement in a positive direction for families does make a huge difference,โ Curtis said.
The new benefits wonโt cost additional money, state officials say. It will be paid for with savings from a declining number of people receiving Reach Up benefits.
Last week there were 15,386 people on Reach Up, including 6,112 families, according to David Yacovone, commissioner of the Vermont Department for Children and Families. A year ago there were 16,584 people enrolled, he said.
Current law allows families to exclude the first $200 they make, plus 25 percent of their earnings before benefits begin to decrease. The bill increases the amount to $250.
The original bill proposed a more generous โincome disregard,โ in graduated steps over the course of a year, but lawmakers scaled it back.
Newcomb works as the kitchen operations coordinator at FRESH Food, a program associated with the Winooski-based organization Vermont Works for Women. At her job, she works with women on Reach Up.
โItโs hard to convince, especially people from generational poverty, itโs just really hard to get them to see what theyโre working toward, because for them itโs just so far in the future,โ Newcomb said.
Families on Reach Up also need more training programs, she said, not only for job skills but for life skills.
For example, she has explained to Reach Up participants why it is better to open a bank account than cash checks weekly at the supermarket, Newcomb said.
Some employers want to promote their workers, or move them from part-time to full-time, but workers wonโt accept more pay because they fear falling of the benefits โcliff,โ she said.
The bill is the result of a study produced last year by a working group that was commissioned to look for ways to improve Reach Up.
The new law essentially amounts to a 4 percent raise for a single head-of-household meeting the programโs work requirements, according to Vermont Legal Aid.
Lost in the legislative process was a section of the bill that allowed Reach Up participants to save more money without being kicked off the program.
The bill originally called for increasing the amount families can save from $2,000 to $5,000. Some states have abolished the so-called “asset limit.”
โIt sends the wrong message to families, that savings is somehow bad,โ Curtis said.
Newcomb said at one point she was forced to liquidate an IRA savings account, and pay penalties and taxes, in order to keep her Reach Up benefits.
Advocates said they hope to revisit that aspect of Reach Up next year.
