Governor Introduces Bill to Curb “Welfare Cliff”

May 12, 2015

For Immediate Release: May 12, 2015
Contact: Adrienne Bennett, Press Secretary, (207) 287-2531

AUGUSTA – Governor Paul R. LePage on Tuesday introduced a bill that will tier benefits to curb the “welfare cliff”—the point at which Mainers on public assistance have an incentive to turn down raises and promotions at work for fear of losing all of their benefits at once.

The bill, LD 1402, increases the “income disregard,” or amount of income not considered for the purposes of determining Temporary Assistance for Needy Families (TANF) eligibility, and creates tiers of time and benefit amounts to gradually reduce eligibility as recipients gain employment.

The bill also increases funding for transportation assistance and Family Development Accounts (FDAs), which assist families in saving for the purchase of a car or home or with education or business-startup expenses.

“We have to keep reforming Maine’s welfare programs into a system geared toward achieving prosperity, not perpetuating poverty,” said Governor LePage. “This legislation eliminates the incentive to choose welfare over work and helps Maine families become self-sufficient and independent. I ask lawmakers to join me in turning the welfare cliff into an employment ladder.”

The Governor’s bill is sponsored by House Republican Leader Kenneth Fredette, with Senate President Michael Thibodeau as lead co-sponsor. Unlike other proposals, the Governor’s bill requires that TANF recipients receiving tiered benefits meet the federally mandated work-participation requirement of a minimum 20 hours per week.

“The additional cost of this tiered benefit system will be borne entirely within existing resources, through savings made possible by the Governor’s past reforms of the TANF program,” added DHHS Commissioner Mary Mayhew. “DHHS looks forward to implementing this reform, which will serve as an important component of our broader efforts to transition Mainers from welfare to work.”