Some working poor could be hurt by $15/hour
HARTFORD — As Connecticut leans toward passing a $15 minimum wage, no legislation has been filed to avoid a potential “benefits cliff” for some low-income workers who might be forced off Medicaid and child-are subsidies because of higher wages.
For the state budget, fewer people accessing subsidized health and child care may result in some savings.
But for a bill intended to put more money in the pocket of workers, putting people into higher-income brackets may actually make their lives tougher.
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“In terms of the benefit cliff issue, I think it is important for us all to realize it’s real and it matters, to a small group of people but it matters,” said Janet Mills, director of fiscal policy and economic inclusion for the New Haven-based Connecticut Voices for Children.
Lawmakers heard testimony Thursday on several bills that would raise the $10.10 mininum wage. A bill backed by Senate Democrats would incrementally raise the minimum wage to $15 by 2022. The governor’s proposal would reach $15 by 2023 and would allow a “training wage” of 75 percent of the minimum wage for learners or workers under 18 in the first 90 days of their employment.
Raising the wage has been highlighted as a top Democratic priority , and with majorities in the House and Senate as well as a Democratic governor, its passage seems likely.
Democrats Thursday acknowledged the potential for a benefits cliff and spoke favorably of adjusting health care and child care eligibility to avoid one.
“That is where we have to focus our savings or our studies to make sure we are not hurting people by helping them,” said Sen. Julie Kushner, D-Danbury, co-chairman of the Labor and Public Employees Committee.
Under current state health care eligibility guidelines, a parent making minimum wage who works 40 hours a week 50 weeks a year and supports her child, would qualify for state health insurance at no cost. If the wage were raised to $15, that parent would no longer qualify under current eligibility guidelines.
For Husky A recipients, generally parents with children, they would have one year of additional coverage after becoming disqualified for the benefit, said David Dearborn, spokesman for the Department of Social Services.
Similarly, parents who use the state’s Care for Kids child care subsidy program have income thresholds that determine what percentage of their child care costs they pay. If their wage goes up, they may pay more for child care or lose access to the subsidy altogether.
Massachusetts and New York both changed eligibility for child-care subsidies when they increased their minimum wages, said Mills. Massachusetts minimum wage is now $12 an hour and will reach $15 in 2023. In New York, the minimum wage will be $15 for all employers in New York City by the end of 2019, while the rest of the state will reach that level more gradually.
“We also have the power to change the benefits calculator,” said Rep. Robyn Porter, D-New Haven, House co-chairman of the Labor Committee. “We are fully aware of the benefits cliff. We are looking to address that to make sure that we are not putting the money in the front pocket and taking it out the back.”
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