November 2014

The future of Philadelphia depends on ending severe income inequality. The city tops the list for having the most families living in deep poverty. To improve Philadelphia’s outlook, it is crucial that the city supports families as they work to become economically secure enough to raise well-nourished, healthy children who are ready to learn.

Earning more income through work should always be a step forward for working families as they strive toward economic independence. But in Philadelphia, and throughout the U.S., families who rely on benefit programs to make ends meet are often harmed when assistance programs are yanked away before they can get on their feet. Such losses can have drastic impacts on family health and stability, as it can limit their ability to purchase food and other basic necessities, forcing families to return to benefit programs they were working so hard to leave.

In 2013, more than 1 in 5 children in Philadelphia County were food insecure, over twice the national average.ii Children under the age of four are especially vulnerable to the negative effects of food insecurity, as they are in a critical time of brain and body growth. Research by Children’s HealthWatch demonstrates the negative child health consequences associated with food insecurity, including higher risk for poor health, hospitalizations, and developmental delays.

The nation’s flagship program for alleviating food insecurity is the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps). Participation in SNAP effectively reduces food insecurity, helps families to juggle living expenses, and sustains the health of children and families.

SNAP is an important work support for families. However, when families receive even modest increases in earnings, their benefits get reduced disproportionately. When benefits are reduced too quickly, the resulting net loss in the family’s budget is referred to as the “cliff effect.” Families experiencing the cliff effect find themselves cutting their household budgets to pay for basic living expenses. This creates more stress and hardship. Additionally, when families report they get a job, and therefore lose SNAP, they may also lose other benefits that help to cover childcare or medical expenses. This additional cliff not only puts family health at risk, but puts families in a worse position where they must re-apply for SNAP or other benefits to make ends meet.

In a sample of 4,580 families with children under the age of four receiving care at St. Christopher’s Hospital for Children in Philadelphia, Children’s HealthWatch found 19% of families were food insecure between 2005 and 2013. This high rate inherently connects to policies for nutrition assistance programs, but at its roots, comes back to employment, wages and a family’s ability to make ends meet.

Summary of Findings

Compared to young children whose families consistently received SNAP, families with young children whose SNAP benefit had been reduced were more likely to:

1. Be food insecure
2. Be marginally food secure
3. Live with a family member who was forced to forgo receiving health care due to cost

Compared to families consistently receiving SNAP, young children in households that lost SNAP benefits were more likely to:

1. Have fair or poor oral health
2. Have foregone needed health care due to cost
3. Live with a family member who was forced to forgo receiving health care due to costs
4. Live in a household that made a trade-off between paying for other basic living expenses such as food, rent, or housing in order to pay for health care

Key Terms and Definitions

• Food insecurity: When families lack access to adequate food for all members to lead active, healthy lives because of insufficient family resources.
• Marginal food insecurity: Less severe condition than food insecurity, but has been associated with impaired health and nutrition. 

Families and Young Children Experience Hardships when SNAP is Cut or Reduced

To explore the impact of the cliff effect among families receiving SNAP in Philadelphia, Children’s HealthWatch analyzed the health outcomes among families at varying stages on their trajectory to economic independence:

• No income increase, consistent SNAP receipt: families received SNAP benefits at the time of interview and had no decrease in their benefit amount in the past year.
• Increase in income, reduced SNAP benefit: families reported a decrease in the amount of SNAP benefits in the past year because of their household earnings increased or assets were too high.
• Increase in income, loss SNAP benefits: families reported loss of all SNAP benefits in the past year because their household earnings increased or assets were too high.

Compared to families with young children that consistently received SNAP, families with young children whose SNAP benefit had been reduced were:

• 34% more likely to be food insecure 
• 32% more likely to be marginally food secure

Compared to young children whose families consistently received SNAP, young children in families that lost SNAP benefits were:

• 186% more likely to have fair or poor oral health

The reduction or loss of SNAP benefits also impacted a family’s ability to pay for both health-related expenses and other basic expenses, including food, rent, and utilities. Compared to families that consistently received SNAP, families whose SNAP benefit had been reduced were:

• 56% more likely to forgo seeking medical care, prescriptions, and/ or oral health care because of an inability to afford care for a family member

Compared to families consistently receiving SNAP, families that lost SNAP benefits were:

• 101% more likely to forgo seeking medical care, prescriptions, and/or oral health care for their young child because of inability to pay
• 61% more likely to forgo medical care, prescriptions and/or oral health care for one or more household members other than the young child because of inability to pay
• 95% more likely to report having to make health care trade-offs – being unable to pay for other basic living expenses including rent, food, and/or utilities because they had to pay for medical care or prescription medicines

Policy Solutions

Philadelphia families need more supports as they rise to the challenge of becoming economically independent. There are many ways our city, state and country can create supportive conditions to help families break the cycles of poverty, stop churning in and out the system and keep them moving toward economic independence.

Reduce barriers to employment for families of young children.

Families face many barriers to employment. To reach economic independence and stay economically secure, families need to find, secure, and keep a living wage job.

• Develop career pathways to jobs with family-sustaining wages and benefits
• Establish mandatory paid sick leave for all employees
• Increase access to quality, affordable childcare

Provide wages that allow working families to achieve self-sufficiency without the need for benefit programs.

More than 80% of families with children who receive SNAP include an adult who has worked in the year prior to or after receiving SNAP. Working families need SNAP and other benefit programs because they do not make enough money in their jobs to make ends meet.

• Raise the minimum wage and index it to inflation
• Support initiatives and policies that encourage employers to pay employees a living wage

Develop processes for work support programs that help families move and stay off of the programs.

Once a family is moving toward economic independence, benefit programs need to support their transition off of government assistance rather than add to the cycle of churning.

• Streamline the application process for programs with similar eligibility requirements so when families need support they can access it
• Create a more gradual decline in benefits across programs, including SNAP, to reduce the churning of families
• Remove the asset test for SNAP

Conclusion

SNAP is effective in reducing food insecurity, improving young children’s health and development, and assisting families as they juggle expenses for food, rent, utilities, and health care. When SNAP is reduced too quickly or families are cut off of SNAP because of even a modest increase in income, families experience greater hardships than those who consistently receive SNAP.

Philadelphia families experiencing the cliff effect struggle to make ends meet as they continue to work towards economic independence. By seeking creative solutions across local, state, and federal policies, we can improve the health and development of young children and create access to opportunities for economic independence for all families.