More money, more problems: Community members talk about how higher pay can create more strain

Most people might think that a raise in income is the biggest solution to helping the economic mobility — the ability to improve or change one’s economic status over time — of lower-wage earners.

But earning more isn’t always the answer for some and can even leave folks with more complications.

It comes down to “perception vs reality” when higher-wage earners assume that one’s financial situation is improved with an income rise, said Germantown neighbor Michelene Mobley-Altice.

Sometimes, a slight increase in someone’s income causes them to lose public benefits so abruptly that they end up worse off. This is called the benefits cliff.

An example could be a parent who gets a raise of $100 a month, but that raise pushes them over the eligibility limit for child care help, so they then lose a subsidy worth far more than the raise and have less money to live on.

Mobley-Altice was one of 13 community members, varying in race/ethnicity, age, job status, economic status, and more, who attended the Germantown Info Hub & Next City’s Economic Mobility event, sponsored by Philadelphia Journalism Collaborative, on Thursday, April 9, at the Our House Culture Center.

The Germantown Info Hub put out a call to community members from the neighborhood and surrounding areas to talk more about their experiences with the benefit cliff over dinner. Collectively, the group sparked several themes about how the cliff affects them — and ways they can see making it better.

Experiences with the Benefits Cliff

“Someone can go from being a $15,000 worker [to] getting their first entry-level at $45,000; I myself have been in the same spot, so I’m going to lose benefits in three months,” said Mobley-Altice.

“The welfare system is going to take my transportation; they’re going to take my food stamps; they’re going to take my Medicaid — Everything is coming out of my pockets.”

Even with a recent increase in income, it won’t compensate overnight for the many benefits she used to help support her and her children. And Mobley-Altice isn’t the only one.

Upper North Philly resident Carolyn Hill also reflected on her personal struggles of maintaining benefits while helping to raise her three grandchildren.

As someone who has maintained benefits for years, everything changed when told she made too much after the SNAP restrictions began with the HR1 Bill.

“With them taking my food stamps now, I have to use some of my bill money to put towards food,” Hill said. “I got to dib and dab into my bill money to put more food on the table and eat healthy.”

“Now I get less, and the kids are bigger… they eat more,” she added.

President Donald Trump signed the H.R.1 Bill into law on July 4, 2025, making big changes to safety-net programs, like SNAP food assistance and Medicaid, impacting millions of families who rely on the support.

Policy analysts estimate the law will cut SNAP by about $186–187 million over 10 years, while slashing Medicaid’s funding by nearly $990 billion over the same period. The changes also lessened the monthly food payments that families can receive, as 600,000 low-income households saw their benefits drop by an average of $100.

With benefits like the SNAP program having income limits that vary by state, Hill has also seen how people’s fear of experiencing the cliff has grown, saying that “You can’t even get a side job,” as you could lose crucial support.

This cliff can also lead to one being hit with the benefits plateau — when the cliff reduces one’s benefits gradually and new costs kick in at the same time. As Hill has been going through the benefits lost, she’s also seen a recent increase in rent, which has added even more strain.

Hill also mentioned that same fear lives with her 70-year-old cousin, saying, “She won’t even let them give her a raise because she’s comfortable with her [current expenses], and she said ‘if they give me any more money, they ain’t going to do nothing but raise everything so I’m going to stay where I’m at.”

The costs of disability and hidden labor

Another Germantown attendee, Amanda Kreiss, spoke about the stress that comes with maintaining disability benefits.

“You’re always at risk that if you come off it, it’s not easy to get back on,” she said.

“If you have something that is a genetic medical condition or a lifelong medical condition, there’s no way to [take the risk] even if you have the capacity to earn more income.”

In 2026, to receive Social Security payments for disability treatment, one must not make more than $1,690 a month as a non-blind individual and $2,380 for legally blind individuals. But there are more limits, including work incentives, trial work periods, and some extended eligibility periods.

Making slightly above the income limit means you could be hit with the full burden of annual medical costs. According to the National Disability Institute, a household containing an adult with a disability that limits their work ability requires an average of 28 percent more income, or an additional $17,690 a year, to live with the same standard of living as a household without a member with a disability.

She also spoke about the hassle of obtaining the right documents and spending money in the process of gaining support, which could ultimately affect one’s economic mobility.

“The thing that goes along with it to me is the amount of unpaid labor it is to fill out all these applications, and to give out private information over and over again,” she said.

“It’s just the amount of things that we have to spend time filling out, and for those of us who are dealing with medical conditions, it’s the energy, time, cost, or caring for other people.”

Calls for another expansion of the Child Tax Credit

Last year’s H.R.1 Bill added minimum income requirements to benefits like the Child Tax Credit (CTC), so that folks can’t make less than a certain amount in order to obtain it.

Neighbors in attendance echoed that reverting the Child Tax Credit to how it was during its 2021 expansion would help millions of families with economic stability.

The American Rescue Plan temporarily expanded the CTC to up to $3,600 per child under the age of six and up to $3,000 for ages six to 17, and made the credit fully refundable. This was a jump from the prior payments of $2,000 and compared to today’s $2,200 per qualifying child. Hill mentioned how the recent changes to the child tax credit have made it less accessible for low-income families, saying that it used to be a huge difference-maker for her as she’s raising children.

“It helped me a lot; I got caught up on my bills. My rent was paid on time. The kids got to get clothes and shoes at the same time, instead of waiting one week to get something, and next week [to get something else],” Hill said. “Now that it’s gone, I’m back to waiting until next week we’ll get this and next week we’ll do this… all over again.”

The expansion effectively cut child poverty by almost 46 percent and lifted 2.9 million children from below the poverty line.

The recent changes in 2025 from the HR1 Bill made the credit less accessible to low-income families with updated guidelines.

Another Germantown neighbor, Pat Albright, plus one’d the credit’s grand impact. In the wake of the changes, she asked, “Is this what society should be about? Something successful and then they drop it?”

The reality of the tax system and ideas for adjusting it

Germantown neighbor Afroza Hossain mentioned the possible use of the tax system as a means of reevaluating societal norms and economic mobility.

“I pay a lot of taxes because I’m in the weird bracket now where I don’t qualify for any benefits, and I pay more percentage of my income in taxes than the top 1% in this country.”

According to IRS data by the National Taxpayers Union Foundation, the top one percent of income earners in the country paid 38.4 percent of federal income taxes in 2023, while the top 50 percent of earners paid 96.7 percent.

For them, folks should have more autonomy over where their tax dollars go, as it could be used to create safety nets for low-income families who may lose access to public benefits.

“It is our own money, but it’s being used for things other than taking care of us,” Hossain exclaimed.

“I don’t want my money to go bomb children in other places. I want my money to feed my neighbors. I want my money to go to SNAP benefits. I know I don’t want my money to go elsewhere.”

Michelene Mobley-Altice also had thoughts about how the tax system can be adjusted so that folks can have more autonomy over their income taxes.

“How can I connect with somebody financially to have those taxes not come out of my paycheck?” she said. “Or learn how to pay semi-annually or at the end of the year so it’s going to benefit me, and so I can pay my [bills] and not worry about getting it cut off when I do choose to buy a home. How am I going to fulfill those emergencies that arise?”

Community-led and policy-driven safety nets

A common solution amongst attendees was pushing for more affordable services and local safety nets across the city — formed on both community and policy levels.

In theory, these supports could alleviate the need for public benefits, which would then reduce the fear of losing these supports. When low-income families know that there are safety nets available if needed, the fear of the benefits cliff and plateau could possibly decline.

Some things neighbors said should be included:

• Free bus transportation
• Food hubs across the city
• Universal child medical care that’s similar to New York City’s model, where children under 19 can receive free or low-cost healthcare options regardless of immigration status.
• Free child care assistance
• Rent-to-own programs for home renters
• Public housing

In regards to food support, Afroza Hossain noted that more could be done on a city policy level — saying that “We need to have strategic setups around the city that aren’t just community fridges, but [ones where] you can go in and get food for your children, disabled [people] and the elderly.

“Food insecurity in this city is so out of control. We need to be able to say that we don’t have to depend on the kindness of strangers,” they added.

Another attendee built off this point and her earlier sentiments about maintaining disability support, stating that “I don’t know how we can do anything without Universal Healthcare.”

Organizing on a community level was something that Germantown native Michael Byrd emphasized, reflecting on the community support he received during his childhood.

“I think about how important it is for us to civically engage, but just at the very basic human level, look out for each other,” he said.

“I remember growing up off of that $20,000-a-year household income, and if it wasn’t for those free lunches on the block, we weren’t eating.”

By the end of the event, it became apparent that community and legislative organizing to address the issue was on everyone’s mind.

“The importance of our collective investing and having a social net, and also the really important task we have in reweaving a social fabric, it seems like both of those ways are important,” Amanda Kreiss said.

“In which we cultivate old and new practices of coming together as a community, and also ways in which we can have actual government support.”

This article was originally published by Germantown Info Hub and Next City. It is part of a national initiative exploring how geography, policy, and local conditions influence access to opportunity. Find more stories at economicopportunitylab.com.