ABSTRACT
Many programs are means-tested in that they are available only to individuals or households who meet certain income criteria. Households that receive aid for poverty-related problems may lose some or all of the aid as their incomes increase. Such reductions in aid may have the unintended effects of discouraging efforts by low-income households to find jobs. For example, formulas that reduce poverty-related aid by $1 for each $1 earned on the job constitute taxes on job earnings at rates approaching 100 percent.
