When people on welfare start to make “too much” money, they immediately lose all of their benefits. This encourages people to deny pay raises or work only part time because the loss of those benefits doesn’t outweigh the progress they made by the raise or going full time. Welfare benefits should be a tiered system where it will never make sense to deny pay raises or limit hours. There should also be an amnesty period where people continue with their benefits after making enough to be off them. It may cost the government more money in the short term, but it will encourage people to ultimately get off the benefits and thrive without them.
We refer to this as the hamster wheel effect. Most people do not want to be on assistance but they lose their job or have a major setback and what starts as temporary turns into a cycle you can’t break free from. You get the raise and you need 6 months to save up to get back on your feet but instead they see your raise and increase your rent and take away your food benefits which means you are right back where you started. Having a grace period to put money into savings so you can move out and back on your own would be life changing.
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