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LR 171

Interim study to examine the impact of the "cliff effect" on Nebraska families receiving public assistance

109th Legislature (2025-2026) Introduced by Terrell McKinney

Nebraska will study how small earnings gains can sharply cut public assistance and what reforms could reduce this cliff effect to boost work and self-sufficiency.

Referred to Health and Human Services Committee
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Bill Summary · LR 171

Summary of LR 171: Interim study on the "cliff effect" for Nebraska families on public assistance

Quick overview

  • Bill Number: LR 171
  • Title: Interim study to examine the impact of the "cliff effect" on Nebraska families receiving public assistance
  • Status: Referred to Health and Human Services Committee
  • Introduced: May 12, 2025
  • Classification: Legislative Resolution (non-binding guidance directing study)

Purpose and intent

  • LR 171 proposes an interim study by the Legislature to investigate the so-called cliff effect—the phenomenon where small increases in earnings or hours of work lead to a disproportionately large loss of public assistance benefits (e.g., Aid to Dependent Children, Medicaid, SNAP).
  • The goal is to understand how this cliff effect influences:
    • Workforce participation
    • Long-term economic self-sufficiency
  • The study aims to identify potential strategies or reforms to address cliff effects in a way that supports upward mobility without triggering an immediate loss of benefits.

Key provisions

  • Designation of a study entity: The Health and Human Services Committee is designated to conduct the interim study.
  • Deliverable: At the conclusion of the study, the committee must prepare and present a report of findings and recommendations to the Legislative Council or Legislature.
  • Nature of action: As a resolution, LR 171 directs study activity rather than imposing new law or funding; any resulting policy changes would require future legislative action.

Who is affected

  • Primary focus: Nebraska families receiving public assistance, including programs such as TANF (Aid to Dependent Children), Medicaid, and SNAP.
  • Stakeholders likely to engage: Public assistance program administrators, workforce development agencies, policymakers, and service providers involved in income support and employment services.
  • Broader relevance: The findings could inform future policy proposals or reforms intended to reduce disincentives to work and promote upward mobility.

Procedural and timeline aspects

  • Introductory actions:
    • Introduced May 12, 2025
    • Referred to Executive Board on introduction date
    • Referred to Health and Human Services Committee on May 19, 2025
  • Process: Interim study to be conducted during an interim period with a final report of findings and recommendations submitted to the Legislative Council/Legislature after completion.
  • Sponsor: Primary sponsor is McKinney

Potential implications

  • The study could identify specific cliff-effect scenarios within Nebraska’s public assistance programs and propose measures to mitigate adverse incentives to work.
  • Possible outcomes include policy options or reform ideas for future legislation, guidance for program design, or recommendations for cross-agency coordination.
  • As a resolution directing study, LR 171 itself does not change law but sets the stage for informed decision-making in subsequent sessions.

Compiled from official sources — confirm details with the bill’s official record.

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