In this paper, we discuss the coding efficiency of the SNR enhancement layer scalability as supported by H.263+. We show that for the typical Internet connections, sub-56 Kbps channels, a significant amount of overhead is imposed by the H.263+ layered approach. This overhead precludes the efficient use of H.263+ SNR and spatial scalability in very low data rates. We provide a detailed analysis of the overhead in layered bitstreams and propose coding modifications that significantly reduce the overhead.