The proposed bill, Substitute Bill No. 7104, aims to address the "benefits cliff" that occurs when beneficiaries of public assistance programs lose or see a decrease in their benefits as their income exceeds eligibility thresholds. The bill modifies existing law by repealing subsection (d) of section 17b-112 and replacing it with new provisions that allow for greater flexibility in determining eligibility for temporary family assistance. Notably, it introduces a disregard for certain types of income, including workers' compensation benefits and financial assistance received as part of pilot programs studying direct cash transfers. Additionally, it allows for a temporary disregard of gross earnings for families whose income exceeds the federal poverty level, thereby providing a buffer to help families transition back to work without losing essential benefits immediately.

Furthermore, the bill mandates the establishment of a pilot program by the Commissioners of Social Services and Early Childhood, in consultation with various departments, to implement recommendations from a report on benefits cliffs. This pilot program will involve input from experts in fields related to universal basic income and will seek necessary waivers from federal law to facilitate its implementation. The bill also requires annual reporting on the pilot program's development to relevant legislative committees, ensuring oversight and accountability. The changes are set to take effect on July 1, 2025, with the pilot program commencing upon passage.