cliff effect

The abrupt termination of eligibility of some social benefits once the client's earnings have reached a certain point. Making one more dollar causes loss of all benefits. This often results in clients striving to keep any income below that point. Many public-assistance administrators point out that people become trapped in the public assistance cycle by fear of losing all their economic and medical benefits under this system and thus recommend more gradual reductions. However, other administrators claim the alternative is the benefit rate reduction (BRR), which also has disincentives.