What Is Welfare?

Welfare refers to a range of government programs that provide financial or other aid to individuals or groups who cannot support themselves. Welfare programs are typically funded by taxpayers and allow people to cope with financial stress during rough periods of their lives. In most cases, people who use welfare will receive a biweekly or monthly payment. The goals of welfare vary, as it looks to promote the pursuance of work, education, or, in some instances, a better standard of living.

Key Takeaways

  • Welfare refers to government-sponsored assistance programs for individuals and families in need, including programs as health care assistance, food stamps, and unemployment compensation.
  • Welfare programs are typically funded through taxation.
  • In the U.S., the federal government provides grants to each state through the Temporary Assistance for Needy Families (TANF) program.
  • Eligibility for benefits is based on a number of factors, including income levels and family size.
  • Welfare beneficiaries usually receive a biweekly or monthly payment in the form of food stamps, vouchers, or even direct payments.

How Welfare Works

Social welfare systems assist individuals and families through health care, food stamps, unemployment compensation, housing assistance, and childcare assistance. In the U.S., a caseworker is assigned to each individual or family applying for benefits to determine and confirm the applicant's needs.

The benefits available to an individual vary by state. Eligibility is determined based on factors surrounding the person’s financial status and its relation to the minimum acceptable levels within a particular state. The factors involved can include the family unit's size, current income levels, or an assessed disability.

Social welfare systems may go by different names within each state, but they often serve similar functions. This can cause confusion when attempting to compare one state's program to another. Additionally, the requirements to qualify also vary, depending on the poverty line in a particular state. This allows for adjustments based on the cost of living that isn't based on one standard.

An individual that is on welfare is usually provided free or deeply discounted goods and services. The government requires that individuals or families seeking assistance must prove that their annual income falls below the federal poverty level (FPL). The FPL is an economic measure of income used to determine whether an individual or family qualifies for certain subsidies or aid. The 2021 poverty guidelines for one person is $12,880; for a family of four, it is $26,500.

There is no standardized system for the administration of social welfare programs, which vary state-by-state, are listed under different names, and have different requirements to qualify.

Welfare Programs in the U.S.

Welfare programs are initiatives set up by the government to support the poor, developmentally challenged, and disadvantaged groups. In the U.S., the history of welfare programs is complex and controversial in some circles of politics. In the 1960s, President Lyndon Johnson created programs like the Head Start, food stamps, and medicare, all designed to fight what he called "the war on poverty" in America. Former President Richard Nixon was responsible for spearheading the Family Assistance Plan.

Fast-forward to the 1980s, former president Ronald Regan slashed welfare budget programs designed to help families and created "welfare to work" programs instituted in 40 states during the 1980s. In 1996 welfare reform legislation focused on shifting responsibility to welfare participants and advocating work over general assistance. In the 21st century, welfare reform and assistance programs continue to expand and change under President Joe Biden's leadership.

There are seven major welfare programs in America, they include Medicaid, Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), Child’s Health Insurance Program (CHIP), Temporary Assistance to Needy Families (TANF), housing assistance, and the Earned Income Tax Credit (EITC).

The U.S. federal government does not give out grants to individuals or families in need. If someone offers to help you get one, do not give that individual any personal information, it is a scam.

Medicaid

Medicaid is a health insurance program geared towards people with low income and the elderly. Pregnant women, children, the disabled, and the elderly who fall below a certain income threshold are guaranteed coverage under the Medicaid program. Medicaid is only offered to those that meet a specific low-income threshold, and children, who do not qualify for Medicaid, have their own special welfare assistance program called the Child's Health Insurance Program (CHIP). When the Affordable Care Act (ACA) went into effect, data found that both forms of health care assistance, CHIP and Medicaid increased under the ACA.

Supplemental Security Income (SSI)

Supplemental Security Income is administered by the Social Security Administration (SSA) and provides public assistance to children and adults living with disabilities like blindness, neurological challenges, respiratory disease, and failure to thrive. The full list of disabilities that qualify can be found on the social security administration's (SSA) website.

According to the most recent statistics from the SSA, as of January 2021, nearly 8 million people receive close to $600 in disability income in the form of SSI each month.

Supplemental Nutrition Assistance Program (SNAP)

Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program, is run by each state and provides vouchers to low-income households to buy nutritious and low-cost foods. Millions of Americans use SNAP vouchers every year to buy food for their households.

Two other programs designed to help children and families are the Special Supplemental Food Program for Women, Infants, and Children (WIC) and the Child Nutrition Program. WIC's offering includes nearly everything a mother and young child needs to thrive up until the age of five. WIC's services include food, educational class and support, vouchers, and health referrals for pregnant, breastfeeding, and postpartum services.

The Child Nutrition Program is an umbrella that shelters the National School Lunch Program, the School Breakfast Program, and the Summer Food Service Program. All of these programs are designed to ensure kids get free or reduced-cost breakfast and lunch, when school is in session, and when it is closed for the summer.

Fast Fact

By November 2020, a year heavily impacted by the COVID-19 pandemic, over 21 million households benefited from SNAP vouchers.

Child's Health Insurance Program (CHIP)

Child’s Health Insurance Program (CHIP) is administered by the US Department of Health and Human Services (HHS). It provides low-cost health care to children in households that won’t otherwise qualify for Medicaid. This program covers all benefits for children including dental care, plus special needs assistance like physical, speech and language, and occupational therapy providing a strong safety net for children in low-income homes.

TANF

The US government provides welfare assistance through Temporary Assistance to Needy Families (TANF). Congress created TANF to prevent welfare recipients from abusing the welfare program by mandating that all recipients find a job within two years or risk losing their welfare benefits.

The federal government, under TANF, provides an annual welfare grant of $16.5 billion to all states as of 2019. The states use their allocated funds to operate their own welfare programs. However, to receive the federal grant, states must also use some of their own money to fund their individual programs.

Housing Assistance

The housing choice voucher program is a federal program designed to help extremely low-income families, the disabled, and the elderly have access to affordable and liveable, meaning clean, sanitary, and safe, rental homes in safe neighborhoods in the private market. These vouchers are given out by local public housing agencies (PHA), who receive the funding for these vouchers from the federally run U.S. Department of Housing and Urban Development (HUD) office.

Individuals and families who qualify for vouchers may live anywhere. These vouchers are not limited to subsidized housing projects but can be used in any residential neighborhood that meets PHA's health and safety requirements. Voucher recipients must find their own housing under this program, and the housing subsidy is directly paid to the landlord of the renal by the PHA.

The family or individual is responsible for paying out of pocket the difference between the market price on the rent and the amount subsidized by the voucher program. In rare instances and under specific requirements, a family could use vouchers to purchase a modest home in an affordable neighborhood. However, the transaction would have to be authorized by the PHA, according to the HUD website.

Earned Income Tax Credit (EITC)

The earned income tax credit is designed to help low-to-moderate income individuals and families get a tax break. For the tax year 2020, a family who files taxes jointly and has three or more children qualifies if they earn $56,844. In 2022, when taxpayers file their 2021 taxes, that amount goes up to $57,414. The credit in 2021 (for 2020 taxes) is $538 to $6,660, but it depends on how you file and how many dependents you have, and when you file your 2021 taxes, those amounts will go up to $1,502 to $6,728.

Who Qualifies for Welfare?

Government welfare is primarily aimed towards people with little to no income, the elderly, and the disabled. Welfare can be in grants, food stamps, vouchers, Medicaid, health care, and housing assistance. The subsidized program is only available for legal citizens and permanent residents of the United States. Federal law bans states from using grants to assist most legal immigrants unless they have resided in the country for five years or more.

A valid Social Security Number (SSN) is needed to apply for welfare. In households with more than one member, all members must have an SSN. In addition to meeting the requirements postulated by the federal government, individuals applying for welfare must also meet their states' requirements. For example, some states require that the applicant be a resident of that state to live there continuously.

People's desired outcomes on welfare will depend primarily on the circumstances that caused them to apply for aid. A mentally or physically disabled person may not be expected to assume independence after a period of time, so a welfare program would provide ongoing aid to better their standard of living. A person lacking education, or who cannot currently provide for themselves, also might be provided welfare. In this case, the person would be expected to receive training or take steps towards financial independence. Ongoing welfare is not a desirable outcome for this individual, according to those giving it.

Welfare FAQs

What's Considered Welfare?

Any federal or state government program that provides financial assistance for housing, food, and healthcare to individuals and families who meet specific guidelines, such as low to moderate-income.

What Makes You Eligible for Welfare?

Different welfare programs have their own eligibility requirements including meeting income limits, offering proof that you are a U.S. citizen or eligible non-citizen, and providing information about family size.

What Can Welfare Help Me With?

Welfare programs are designed to help individuals and families secure safe and clean housing, get access to neonatal, health, and medical care, purchase food, provide financial assistance for daily living, and tax breaks.

What Are Welfare Programs That the United States Has?

The following welfare programs are offered in the U.S. are Medicaid, supplemental security income, supplemental nutrition assistance program, child's health insurance program, temporary assistance for needy families, housing assistance, and the earned income tax credit.

What is Social Welfare?

A social welfare system provides assistance to those in need whether they are individuals or families. There are various types of welfare available and how much welfare you are eligible for, depends on factors like the country, region, or state you live in. For example, in the U.S., the federal government provides money to each state and the welfare programs operate on a state-by-state basis. However, in Canada, for example, some social welfare programs send money directly to the individual or family in need, if they qualify.

The Bottom Line

Welfare encompasses a range of government programs designed for individuals and families who do not make enough money to have a decent standard of living. Housing, food, medical care, and financial assistance for daily life are all provided by different social welfare programs. Welfare programs are tax-payer funded and help those in need cope with financial stress and hardship. Welfare recipients often receive a biweekly or monthly payment in the form of food stamps, vouchers, or, in some cases, direct payments. The goal of welfare is to support families and individuals in need as they work towards a more secure financial life.