Understanding the ‘cliff effect’
September 17, 2008
ASPEN ” A financial “cliff effect” that is being felt by families around Colorado will be the focus of a presentation from 11:30 a.m. until 2 p.m. on Friday.
The cliff effect is what happens when the bread-winner of a family of limited income gets a small raise, and suddenly finds him- or herself and the family cut off from government subsidies.
According to Nan Sundeen of the Pitkin County Social Services Department, the phenomenon is far more common in this county than some might think. Sundeen, along with a representative of The Women’s Foundation of Colorado, are among the presenters at the meeting, to be held at the Schultz Health and Human Services Building on Castle Creek Road near Aspen Valley Hospital.
“Six percent of our population lives at the federal poverty level,” Sundeen explained, noting that that means the people in question earn only about $9,300 per year.
But even more relevant is the fact that 19 percent of the county’s residents “makes less than a sustainable income,” she said. And many of those families are teetering on the edge of the cliff, so to speak ” they get help from the government, but that help could be taken away if their family income rises only slightly.
Sundeen said a sustainable income is one that allows an individual and a family to make ends meet, which she said is difficult given the high costs of living in the Roaring Fork Valley.
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A sustainable income is estimated to be roughly $25,300 for a single adult and about $51,400 for a single parent with one child. That compares to the federal poverty standard of $9,310 for a single adult, or $12,490 for a single parent with one infant child.
For a family made up of one adult, one infant and one preschool-aged child, Sundeen said, the sustainable income level is $71,491 per year (or nearly $34 per hour), compared to the federal poverty line of $15,670.
“We have never found the federal poverty level to be helpful here,” she said, noting that the county’s social services agencies have been able to adjust the eligibility criteria for such things as food stamps, welfare, child care, housing subsidies and other safety-net benefits.
For example, Pitkin County offers child care assistance to families making 225 percent of the federal poverty level per year. For food stamps, the cutoff is at 130 percent of the federal standard. For medical prenatal care, it is 133 percent, while it is 250 percent for state-sponsored children’s health insurance.
A family qualifies for help from the low-income Energy Assistance Program if it lives off of 185 percent of the federal guideline or less.
Given all that, Sundeen said, 165 families in Pitkin County qualify and receive public assistance, a number that she expects to rise.
“The self-sufficiency wage is so high, anything can throw a family into crisis,” she noted, mentioning examples such as a family member getting sick, a car breaking down or a child sustaining a serious injury.
In general, she said of the presentation, “I want to get some energy and passion around starting to address the subject of poverty in Pitkin County. It’s getting tight.”
She said she hopes human services professionals from all area governments can attend Friday, as well as citizens from anywhere in the valley.
“We don’t want people to go home depressed,” she concluded, but “when the economy tanks, the public assistance caseload goes up.”
In Pitkin County, she added, the caseload has increased by 17 percent in the past three months, along with numbers that are “exponentially higher” in Garfield and Eagle counties.