Falling off the Benefits Cliff: Challenges for ALICE Households

Picture a single mother working full-time while navigating a divorce. Although she has a steady job and a sense of stability, she is still barely making ends meet. Her story reflects a broader reality: being employed does not necessarily equate to financial security.

At a recent community meeting, local leaders came together to discuss the growing struggles of the ALICE population—households that are Asset Limited, Income Constrained, Employed. These are working individuals and families who, despite holding jobs, are unable to afford basic necessities such as housing, food, child care, and transportation.

Miles Crawford, Regional Development and Operations Manager at DPI Staffing, says that being an ALICE household is almost the new norm. He shares statistics that show the majority of people in the United States have less than $1,000 in savings and are living paycheck to paycheck.

"How do you break out of the mold?" he asks. Crawford's work focuses on preparing individuals to reach and maintain employment, recognizing that there are often deep, underlying barriers that prevent long-term job retention. Many of the individuals his organization supports are aspiring just to become part of the ALICE population.

The critical flaw in current systems that Crawford points out is that as individuals begin to stabilize and improve their situations, they often lose access to essential support services.

"If they’ve only been working 30 days, they’re not ready to stand on their own yet,” he said. “They’re being asked to perform a herculean task." The abrupt loss of benefits—commonly known as the “benefits cliff”—creates a paradox where working more or earning slightly more actually leaves individuals worse off.

Patricia McMullin from the Community Rescue Mission noted that ALICE families face different financial challenges than those living in deeper poverty. Once someone moves into the ALICE bracket, they’re often left in limbo—earning too much to qualify for aid but too little to build savings or find stability.

The panelists also stressed the importance of addressing foundational needs such as housing, hygiene, and transportation—barriers that prevent many from even entering the workforce.

“If you can’t find someone a safe place to live, their life is chaos,” Crawford added.

Both panelists agreed that simply getting people into jobs isn’t enough. The transition from poverty to ALICE requires more than income—it demands mental and emotional resilience, planning, and long-term support.

Drawing from her own experience, McMullin shared, “I was in prison and I didn't know how to get from there to where I am now. It's doable. Everybody has a story. A lot of people come from hardships. Letting them see that it can be done—that gives them hope.”

Crawford described the importance of instilling a new mindset.

“You have to ask them their ‘why’ and help them have some grit for a season,” he said. “They need to paint a future vision for themselves.”

He also highlighted the difficulty of choosing between survival and progress.

“It’s a big decision to give up a SNAP card for a couple extra dollars on your paycheck,” he said. For many, it’s an economic tradeoff that doesn't make sense without a clear path forward.

McMullin echoed the need for wraparound support. Many of the individuals she works with don't see the benefit in getting a job or they choose part-time work just to retain the safety net, which, in turn, limits their career advancement.

Despite the complexity of the issues, some solutions are within reach. Programs like FAFSA, workforce training, and career navigation services offer promise for ALICE individuals with the right support network.

Both McMullin and Crawford underscored the importance of ongoing relationships, mentorship, and motivation. Transitioning out of ALICE isn’t a quick fix—it’s a journey.

“Help them plan for their future and give them milestones along the way,” Crawford advised.

As community organizations and policymakers grapple with these challenges in real time, one thing is clear: supporting ALICE households requires more than temporary aid—it calls for systemic change, patient guidance, and a renewed commitment to helping working families truly thrive.