DIRECTING THE DEPARTMENT OF HEALTH AND SOCIAL SERVICES TO CONDUCT A REVIEW OF STATEWIDE BENEFIT CLIFFS AND IDENTIFY ACTIONABLE STRATEGIES TO ALLEVIATE CLIFF EFFECTS THAT CONTRIBUTE TO ALICE OUTCOMES.

Legislation Document

SPONSOR:

Sen. Cruce & Rep. Snyder-Hall & Rep. Harris & Rep. Minor-Brown

Sens. Buckson, Hansen, Hocker, Lawson, Lockman, Pettyjohn, Poore, Richardson, Seigfried, Sokola, Sturgeon, Townsend, Wilson; Reps. Bolden, Gorman, Griffith, Morrison

DELAWARE STATE SENATE

153rd GENERAL ASSEMBLY

SENATE CONCURRENT RESOLUTION NO. 102

DIRECTING THE DEPARTMENT OF HEALTH AND SOCIAL SERVICES TO CONDUCT A REVIEW OF STATEWIDE BENEFIT CLIFFS AND IDENTIFY ACTIONABLE STRATEGIES TO ALLEVIATE CLIFF EFFECTS THAT CONTRIBUTE TO ALICE OUTCOMES.

WHEREAS, ALICE, an acronym for Asset-Limited, Income-Constrained, Employed, represents Delawareans whose income is insufficient to afford basic necessities like housing, childcare, healthcare, food, and transportation; and

WHEREAS, in Delaware many households working full-time and earning above the poverty line still cannot afford housing, childcare, and other essentials, making them invisible in traditional poverty statistics and underserved by existing policy responses; and

WHEREAS, the Federal Poverty Level (FPL) drastically underestimates what it takes to survive in Delaware, with the ALICE Household Survival Budget showing that a family of four requires more than three times the FPL to meet basic needs; and

WHEREAS, ALICE is not a feeling or label, it is a data-driven equation. Developed by the national United for ALICE network, in which Delaware participates, the ALICE framework uses a standardized methodology and official, publicly available data to develop survival budgets to measure economic hardship based on what it actually costs to live and work in each county; and

WHEREAS, according to the latest ALICE data, 44% of Delaware households are either below the FPL or fall into the ALICE category – meaning nearly half of Delawareans live in financial precarity, despite many being employed; and

WHEREAS, according to the most recent ALICE report, a family of four with two adults, one infant, and one preschooler must earn $85,524 annually in Delaware just to afford basic necessities like housing, childcare, transportation, food, and healthcare. This threshold significantly exceeds the wages of many workers in Delaware, illustrating how structural conditions, not individual choices, leave families trapped in financial insecurity; and

WHEREAS, the high cost of housing and childcare in Delaware are among the most significant drivers of ALICE status, with the ALICE Survival Budget estimating minimum monthly housing costs at $1,330 and childcare costs for two young children exceeding $1,500. These costs far outpace what many of Delaware’s most common occupations pay, as reported by the Delaware Department of Labor (DDOL); and

WHEREAS, the DDOL reports that nearly 60% of the state’s top 20 most common occupations pay less than $45,000 per year, including positions in retail, food service, home health care, and early childhood education. This makes it nearly impossible for workers in these roles to meet ALICE household budgets without supports; and

WHEREAS, many of these jobs are also classified as essential or frontline roles, and yet workers in these fields are disproportionately represented in ALICE statistics, highlighting a disconnect between the value of the work and the wages it provides; and

WHEREAS, the DDOL reports that of the 20 most common occupations in Delaware in 2023, 14 paid less than $20 per hour, and, of all workers in these occupations, 36% lived in households below the ALICE threshold; and

WHEREAS, ALICE households are not defined by geography or party affiliation – they exist in every county and every legislative district in Delaware, with rates over 50% in parts of Kent and Sussex Counties, proving that this is a systemic, statewide economic crisis; and

WHEREAS, benefit cliffs, or sudden drops in public assistance when a household’s income slightly increases, create poverty traps, disincentivize economic advancement, and undermine upward mobility by making it economically rational for families to remain at lower income levels in order to retain essential supports like subsidized childcare, housing assistance, and health coverage; and

WHEREAS, a coordinated, data-driven review of cliff effects across programs is necessary to identify where program rules and eligibility thresholds unintentionally contribute to ALICE outcomes, and to develop actionable policy recommendations to modernize Delaware’s safety net.

NOW, THEREFORE:

BE IT RESOLVED by the Senate of the 153rd General Assembly of the State of Delaware, the House of Representatives concurring therein, that the Department of Health and Social Services (DHSS) shall conduct a statewide review of public assistance programs to identify and map benefit cliffs, including the points at which individuals and families experience net losses in total resources due to income increases.

BE IT FURTHER RESOLVED that the review shall assess the scope, severity, and cumulative impact of benefit cliffs across key programs, including childcare, housing, health coverage, and nutrition assistance, and consider regional and demographic variations.

BE IT FURTHER RESOLVED that DHSS shall collaborate with the Office of Management and Budget and any other interested stakeholders of the ALICE initiative to analyze and visualize statewide data related to asset-limited, income-constrained, employed individuals.

BE IT FURTHER RESOLVED that DHSS shall prepare a report that details its findings and recommendations.

BE IT FURTHER RESOLVED that the report must include all of the following:

(1) An inventory of all state-administered public assistance programs with income-based eligibility criteria.

(2) Identification of specific income thresholds where benefit cliffs occur, quantifying the financial impact on recipients.

(3) Analysis of the interaction effects between multiple programs, assessing how combined benefit structures may exacerbate or mitigate cliff effects.

(4) Evaluation of best practices from other states that have successfully addressed benefit cliffs, including policy adjustments and program redesigns to prevent ALICE outcomes.

(5) Recommendations for legislative or administrative actions to mitigate abrupt reductions in public assistance as beneficiaries' incomes increase, with all proposals grounded in the Delaware ALICE Survival Budget.

These recommendations shall include strategies that enable working households to move toward meeting or exceeding that budget threshold, including wage growth, improved benefit phase-outs, and access to affordable housing and childcare.

(6) Strategies to enhance interagency coordination and data sharing to monitor and address benefit cliffs proactively, create gradual phase-outs, and promote workforce advancement.

(7) A stakeholder engagement strategy to include voices from all three Delaware counties of directly impacted individuals, employers, and community organizations in crafting solutions.

BE IT FURTHER RESOLVED that DHSS shall submit a copy of the report to the Governor, members of the General Assembly, and the Director and Librarian of the Division of Legislative Services by January 9, 2026.

SYNOPSIS

This Senate Concurrent Resolution directs the Department of Health and Social Services to conduct a review of public assistance programs to identify benefit cliffs and consider these outcomes with perspective of asset-limited, income-constrained employed (ALICE) individuals. The Resolution also direct the Department of Health and Social Services to prepare a report that details its findings and recommendations by January 9, 2026.

Author: Senator Cruce