Safety Net Recipients Face Marriage, Work Penalties

Policy analysts gathered at the American Enterprise Institute Tuesday to suggest potential reforms and policy proposals to limit disincentives to work and marriage in programs such as the Earned Income Tax Credit and SNAP.

In a conference titled “Marriage and Work Penalties in Government Programs,” analysts from AEI, the Georgia Center for Opportunity, the Sutherland Institute and the Niskanen Center agreed that many low-income Americans can face financial penalties or loss of benefits from the income increases that come from marriage or employment gains.

“We couldn’t have created a system more perverse than the one we have now,” said Rep. Gary Palmer (R-AL). “We’ve created a system that disincentivizes people to work and to marry.”

Nic Dunn, vice president, Strategy and Communications at the Sutherland Institute and Erik Randolph, director of research at the Georgia Center for Opportunity, presented data from work their organizations have done that illustrates the problem.

Dunn said a new paper from the Institute surveyed just under 500 families in Utah and found that well over two-thirds felt that if their household income increased, they would be worse off as a family and nine percent said they had decided not to get married because of these concerns.

The programs respondents were most worried about losing access to were Medicaid and SNAP.

Dunn suggested one relatively easy reform would be to establish more transparent and robust communication with aid recipients to outline the impact of income increases and potential benefit cliffs.

Randolph suggested an array of steps to help encourage marriage, including:

• Change the tax system to account for people living together
• Require all safety net programs to do the same
• Create incentives for those living together to be married
• Require benefit applicants to show they are pursuing child support
• Scrub all eligibility rules to make sure programs are marriage friendly
• Create a 0ne-door administrative structure and eliminate benefit cliffs

In a subsequent panel, Randolph, Dunn and AEI Rowe Scholar Angela Rachidi suggested aid recipients face many of the same concerns and potential benefit losses when taking a new job or getting a promotion.

“In many ways, our safety net programs are designed to hold people back or frustrate them—frustrate people who want to work more,” Rachidi said.

In a panel devoted to potential federal responses to the problem, Rep. Palmer, Josh McCabe, the director of Social Policy at the Niskanen Center and AEI’s Matt Weidinger said the new Congress and administration will have an early opportunity to make changes, particularly with the Child Tax Credit, in next year’s expiration of the Tax Cuts and Jobs Act.

Dunn said no matter the policy proposal, proponents of reforms to emphasize marriage and work must keep in mind that messaging is crucial.

“Lead with families desire to work and escape poverty—don’t lead with policy complexities,” Dunn said. “These cliffs are standing in the way of families achieving the American dream. Policymakers job is to clear obstacles in their path.”