More money, more problems: Loss of benefits can stop Floridians from seeking higher pay
Ryan Hiott wants a job.
He’s 54 and has a 3-year-old son, also named Ryan, with his wife, Erica, a hair stylist.
After working 24 years as a pilot and aviation operations manager, Ryan was unexpectedly let go last December. Without his $80,000 annual income, his family’s finances evaporated.
The Hiotts now live almost entirely off of government benefits, supplemented by whatever help they can get from friends and family.
Job offers aren’t necessarily the issue. Having applied to more than 60 open positions in the last two months, Ryan received an offer that he might’ve taken: an airport job, loading bags into the bellies of planes.
But the pay, $16.50 per hour, was unworkable. “We would’ve lost our childcare benefits,” he said, glancing at Ryan Jr.
Peering over the edge of what’s known as the “benefits cliff,” Ryan, like many Florida parents, could not financially justify jumping.
A benefits cliff occurs when an income bump disqualifies someone from receiving state assistance but doesn’t offset the cost of losing those benefits.
In other words: By making more, you end up with less. And while an individual person might be able to absorb those losses, someone with a child often cannot.
“Our suite of benefits is designed for a single person but not for families with children,” said Michele Watson, CEO of the Florida Alliance of Children’s Councils and Trusts, a children and families advocacy group.
Making an extra $34,000 a year, Ryan’s household would have incurred astronomical expenses. Paying for daycare — which he currently gets for free but can run upward of $700 monthly — and healthcare for Ryan Jr., monthly premiums for which can cost hundreds of dollars per month, would have been punishing enough. Factoring in the loss of his Social Security disability insurance and food stamps, the numbers just weren’t there.
Ryan feels stuck in a benefits loop and “majorly discouraged” by having to reject a job he otherwise might’ve taken.
Caught between providing for their children and advancing their careers, many parents like Ryan choose the former.
According to Kyle Baltuch, executive vice president of the Florida Chamber Foundation, the Florida Chamber of Commerce’s research arm, 33% of polled Florida businesses reported employees turning down jobs for fear of losing benefits.
Without state help, those workers wouldn’t be able to afford the cost of having a family on the salary they’d be making.
Part of the problem is that income qualifications are low — as prices have risen, so have wages, excluding many financially struggling households from accessing benefits.
The federal government underwrites many of the childcare benefits that Florida families receive. As such, income qualifications depend on wages nationwide, not Florida wages. The federal minimum wage is $7.25 per hour, compared to $13 per hour in Florida, which has a relatively high cost of living.
As such, many low-income Florida families are locked out of childcare benefits, like the federal School Readiness Program, which helps low-income families pay for early education and childcare for children up to 13 years old.
Households earning less than 150% of the federal poverty line qualify for the School Readiness Program. For a three-person household in 2024, that’s $38,730. A two-income Florida household with both parents earning the state’s minimum wage would be shut out.
The Florida Legislature has made some moves to address the benefits cliff when it comes to childcare.
In June 2023, it raised eligibility for Florida KidCare, health insurance for children, from 200% to 300% of the federal poverty line. That means a three-person household can now earn as much as $77,460 per year, up from $51,640. As their earnings increase, parents pay a greater portion of their kids’ insurance premiums.
Earlier this year, Florida introduced the School Readiness Plus Program. The state initiative lets families that are currently enrolled in the federal School Readiness Program earn beyond that program’s income limit — $38,730 for a family of three — while keeping some childcare benefits. The more those families earn, the more they contribute to their childcare costs. Benefits run out when a family hits the Florida median income — $89,908 for a family of three.
But access remains an issue. The Plus initiative is only available to the roughly 20,000 children who are already enrolled in the federally funded School Readiness Program, for which nearly 5,000 kids are on the waitlist.
Expanding access to the federal School Readiness Program by raising the income threshold, which Florida has the ability to do, is a priority for state Sen. Alexis Calatayud, a Republican representing parts of Miami-Dade County, moving into the next legislative session, which begins in March.
Tying eligibility to state median income, rather than the federal poverty level, which is substantially lower, would increase accessibility, she said, enabling parents to return to the workforce or advance in their careers.
But the price tag of doing so — Calatayud estimates somewhere between $100 million and $150 million annually — was its legislative undoing last year. Lawmakers were unwilling to add that cost to the state’s budget, she said.
“A perfect fix would be an enormous amount of money,” she said, adding, “but there are so many competing interests.”
Ultimately, noted Calatayud, any expenditure on the issue would be an investment in Florida’s productivity and output.
For Ryan, it could be a badly needed ticket back to work.
As his son ran giggle-shrieking around the room, Ryan sighed and chuckled, “I gotta get out of the house.”
This story was produced with financial support from supporters including The Green Family Foundation Trust and Ken O’Keefe, in partnership with Journalism Funding Partners. The Miami Herald maintains full editorial control of this work.
This story was originally published October 30, 2024 at 5:00 AM.
