This is not hard to fix.
The idea is to arrange things so the chart looks like the one below:
Ignore the colors (too hard to alter) or the exact slope and position of the welfare curve. The important thing is that the curve slopes gently upward, i.e. every time real pay for work increases, the amount of welfare gets smaller, but the sum of the two goes up. At no point moving rightward on the increasing salary curve should the person be worse off than they are.
Get rid of the cliffs, and you're in business.