[TBH]

I would argue against foregoing the raise, and I would argue againts refinancing to interest only. Seems like you'd be shooting yourself in the foot either way. What if you can't move after all and get stuck with horrible rate hikes on your loan? What if your boss says s/he'll give you a bigger raise next year, but then business is bad next year or you fall out of the limelight a little and the boss says "oh, did I say that?"

Maybe you should tell your boss that the raise, while much appreciated, puts you out of the WIC range, so you're actually losing money. Ask if you you could have another percentage point increase to help you through this transitional time.

I would, if anything, ask for more money, not turn down the raise. And gift cards instead of a raise sound risky to me too. What if the gift cards stop coming? A raise can't be retracted as easily as in-kind payments, or a mere promise of future raises.