SECTION 1. Chapter 18 of the general laws, as so appearing in the 2016 official edition, is hereby amended by inserting, after section 39, the following section:-
Section 40. (a) There shall be established a pilot program to mitigate cliff effects for low-income individuals/families that are working and receiving public assistance. Beginning on July 1, 2020, the EDC and Working Cities Group, in collaboration with the Department of Transitional Assistance (the Department), is authorized to develop and oversee a pilot program (hereby called the “Pilot Program”) in which the Massachusetts Earned Income Tax Credit and/or all assistance programs that the Department administers or are administered by any other agency, department or Secretariat of the Commonwealth, are modified to mitigate the cliff effect for low-income individuals/families that are working and receiving any form of public assistance, including but not limited to cash assistance, SNAP, child care benefits, transportation assistance, housing assistance/voucher, and health care subsidy/benefits; understanding this legislation cannot change existing federal programs and regulations. The EDC will authorize and coordinate with the Department the assignment of Department case managers to oversee and assist families/individuals who apply or are already receiving public assistance to maximize their benefits and plan for the gradual lessening of benefits as their employment income increases. Working Cities Group will leverage existing resources to provide coaching and mentoring, financial wellness, cliff effect planning training, and other services as needed to achieve the goals of the program.
(b) The EDC in partnership with the Department is required to collaborate with all appropriate State agencies, departments, and Secretariats of the Commonwealth in developing the Pilot Program.
(c) The Pilot Program shall serve 50 Western Mass families/individuals who have been receiving public benefits for less than twelve (12) consecutive months at the time of application into the Pilot Program. Participants in the Pilot Program must be eligible for the Work Opportunity Tax Credit.
(d) The Pilot Program shall run for three (3) years, ending December 31, 2023, unless extended by an act of the legislature.
(e) The Pilot Program’s primary goal is to facilitate, encourage and support families/individuals to enter/reenter the workforce.
(f)(1) A family/individual may be eligible to participate in the Pilot Program, once in a five year period, for three (3) consecutive years. The Pilot Program shall continue to pay an amount not less than the participants’ base year (as defined in Section 1.6(a), for the duration of the family/individual’s participation in the Pilot Program. In addition the Participant shall be allowed to keep all income generated, (subject to conditions stated below) net of payroll and all applicable State and Federal income or other applicable taxes/fees.
(2) The Department shall determine the dollar value of all benefits that a participant is receiving at the time that he/she enters the Pilot Program (hereby called the base) and becomes fully employed with a minimum of 37.5 hours/week.
(3) In the first year that a family/individual is participating in the Pilot Program it is the intent of the Pilot Program that a participant be allowed to retain an amount equal to 100% of their public benefits plus keep an additional 20% of the income earned as a result of fulltime employment.
(4) In the first year that a family/individual is participating in the Pilot Program he/she shall be required to deposit 80% of after-tax income earned as a result of full-time employment into a savings account dedicated for the participant’s future use (after he/she exits the Pilot Program) or for an emergency during participation in the Pilot Program. The Department shall determine what defines an emergency. The savings account shall be excluded from the so-called “asset test” in determining benefit eligibility for the duration of the family/individual pilot participation. If the Department determines that a participant has successfully moved into the workforce during or at the end of the Pilot Program, then the Commonwealth shall award a match equal to 10% of the balance of the participant’s savings.
(5) In the second and third year that a family/individual is participating in the Pilot Program he/she shall be allowed to keep all earned income plus be awarded an increase in the Mass Earned Income Tax Credit, whose dollar value, allows the participant to continue to earn an amount that is not less than the base. There shall be no required savings in year two or three of the Pilot Program. If the participant successfully transitions off of public assistance, during the Pilot Program, the participant shall still receive counselling services, technical support services and be monitored for data collection purposes.
(g)(1) For the duration of the Pilot Program, the Department shall coordinate with the EDC to provide two (2) intensive case managers that are assigned to the Pilot Program, with the primary responsibility of overseeing participants’ progress. The Department shall coordinate the hiring process with the EDC.
(g)(2) The EDC, the Department and the intensive case managers shall utilize shared resources of the Working Cities Group employer partners, staff members, mentors and volunteers in order to maximize the effectiveness of the Pilot Program, but shall not require any financial contribution from the parties.
(h) The EDC and the Department shall provide the Legislature with a yearly report on the Pilot Program, on or before February 15 of each year of the Pilot Program beginning in 2021. The report shall include but not be limited to the number of participants, the number of participants who entered the workforce, the amount of yearly income each participant earned, the hourly wage rate of each participant including a record of all salary increases over the year’s period of time, the amount of dedicated saving of each participant in year one, the dollar amount of all monies that inured to the State in years two and three, and all records of participants entering or exiting the workforce with all reasons for any exiting. The legislature will give due weight to the report in all decisions of extending or sun setting the Pilot Program and determining its effectiveness.
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