I suspect the inconvenience and weirdness of dealing with a hard cut-off is easier than the complexity of dealing with some kind of continuous scale. Laws need to be, first of all, easily comprehensible so that all parties can plan accordingly. It's easy enough to plan to keep your income under $X, but hard to figure out the optimum benefit/income sliding scale and plan accordingly. The only other simple and fair option I can think of would be to implement a "judge" to issue approval on a case-by-case basis instead of a hard number.