The Benefits Cliff in Middle Tennessee
Written by Robin Griffin, TAEM Data Quality & Learning Manager
For a single parent in Middle Tennessee, a raise as small as 35 cents an hour can feel more like a punishment than a promotion. Many low-income families who rely on public benefits food assistance, healthcare coverage, childcare subsidies, and housing vouchers risk losing the very supports that help cover their everyday living expenses the moment their earnings rise. This is known as the “benefits cliff,” and it happens when a family’s increased income triggers an abrupt loss of public benefits that is larger than the raise itself. For many working parents, this raises a difficult question: is the raise worth it?
What the Cliff Looks Like for Middle Tennessee Families
According to The Poverty Solution’s CLIFF Index, Tennessee scores 57 on the state index, with 282,000 families affected. Childcare ranks as Tennessee’s top cliff, accounting for 16% of cliff-zone household income, and creates the largest single benefit loss at the cliff point in 73% of U.S. counties nationwide.
In Middle Tennessee, families are struggling to find childcare for their children. The issue has become a frequent topic of conversation across the region, with limited provider options and rising costs leaving many families unable to cover childcare on top of housing, food, and transportation.
Child Care: Where the Cliff Is Steepest
Of all the programs that make up the benefits cliff, childcare is often the one that hits families the hardest. Tennessee’s Child Care Certificate Program (CCCP) and its companion, Smart Steps, exist to bridge that gap. Eligibility is tied to the 85th percentile of State Median Income, which on paper covers most low- and moderate-income working families. In practice, two changes in 2025 narrowed the door considerably.
For instance, Smart Steps was placed on a waitlist on August 26, 2025. Previously, eligible families could enroll right away. After that date, new applicants were added to a waiting list instead. Then, on October 1, 2025, the zero-copay waiver was eliminated, meaning families now must contribute a copay.
These changes can create real hardship for families who urgently need childcare especially those starting a new job or returning to work. Childcare is essential to economic mobility for working families.
According to Think Tennessee, Tennessee families earning the median income spent 41% of their household income on childcare in 2023 nearly six times what the federal government considers affordable. Statewide, about 16,000 Tennessee families rely on the Smart Steps childcare voucher program, and more than 20,000 children under age 5 receive subsidized childcare through federal block grant funding. With Middle Tennessee home to roughly a third of the state’s population, that translates to thousands of local families who depend on this assistance to stay in the workforce.
The True Cost of Quality Care
Sandra Cummings, TAEM’s Childcare Navigation Manager and Professional Development Lead, sees these challenges firsthand. “High-quality childcare is an essential resource for families and young children,” she explains. “Reliable childcare enables parental workforce participation, simultaneously providing children with a safe, nurturing, and structured environment that promotes healthy development.”
Cummings points to a recent study she participated in with Vanderbilt’s Prenatal-to-3 Policy Impact Center and United Way’s Raising Readers Nashville that examined the true monthly cost of high-quality childcare including living wages for staff, supplies, and food. The findings were stark: providing real high-quality care would require a single parent at the county median income to spend 80% of their income on just one infant.
And cost is only part of the problem. According to Vanderbilt’s Prenatal-to-3 Policy Impact Center, Davidson County is home to roughly 39,900 children under age 5 with all parents in the workforce, yet local center-based childcare can only accommodate 56% of them (pn3policy.org). That gap leaves thousands of working families on waitlists, piecing together informal care, or stepping back from work altogether which is exactly how the cliff pulls families backward instead of forward.
Cummings adds, “There are not enough childcare slots to serve all children in working households which adds to the barrier for working families already navigating the benefits cliff.”
Signs of Progress
Despite these challenges, local organizations and state leaders are stepping up. St. Mary Villa is opening several new childcare centers across Middle Tennessee on a sliding-fee scale that accepts Smart Steps vouchers, expanding both access and affordability for working families. At the state level, the recently passed Promising Futures Act and Safe Harbor Act represent new legislative efforts to invest in early care and grow the supply of licensed childcare providers across Tennessee.
Looking Ahead
Through research, partnership, and persistence, Our Chance TN and TAEM are committed to helping Middle Tennessee families move from the edge of the cliff to solid ground. The goal is for the community and stakeholders to clearly see the connection between the benefits cliff and the childcare crisis a cause-and-effect issue that demands coordinated solutions.
With new legislation like the Promising Futures Act and Safe Harbor Act, and with local providers like St. Mary Villa expanding affordable, voucher-accepting childcare across Middle Tennessee, the pieces of a real solution are starting to come together. Working Middle Tennessee families deserve a system that rewards their progress not one that punishes them for it.
Our ChanceTN is a part of a study funded by the Tennessee Department of Human Services which is being conducted to determine how these pilot programs help people improve their economic well-being. During the study, all new eligible applicants will be randomly selected into one of two/three groups that receive a different mix of program services.
The Tennessee Opportunity Pilot Initiative (TOPI) is brought forth by the Tennessee Department of Human Services and TANF Opportunity Act. This initiative will help individuals, families, and the state of Tennessee by creating a new vision for the Tennessee social safety net and is dedicated to helping low-income families grow beyond their vulnerabilities. TOPI empowers all Tennesseans by partnering with local organizations to reach deep into their communities and work shoulder to shoulder with individuals and families, growing their capacity to take on life’s challenges and reduce their dependence on the social safety net.