Welfare Programs are government-funded subsidies for families and individuals with low income.
Welfare Programs: Definition and examples
Welfare programs are government-funded subsidies for families and individuals with low incomes. Welfare recipients must show that their income is below a certain level.
This target is a percentage of the federally-defined poverty level. In 2021, a family with four members will be at the poverty line of $26,500. 1
Six major welfare programs are available in the United States, with income and poverty levels as criteria for eligibility.
- Temporary Assistance to Needy Families
- Medicaid
- Supplemental Nutrition Programs (SNAP, or ” Food Stamps”).
- Supplemental Security Income
- Earned Income Credit
- Housing Assistance
Each program also has additional eligibility requirements.
What are the Welfare Programs?
These programs do not directly pay recipients. Individual tax credits may be issued. Federal grants to local and state municipalities or states may be used to distribute them to the public.
These programs, no matter who receives the money or where it goes, make up a significant part of the U.S. federal budget. There are many debates about how to finance and administer welfare.
The federal government funds welfare. The states are responsible for the administration of the programs. Some states have also expanded the programs through additional funding.
Note:
Congress often debates welfare programs. Congress often discusses reducing funding for programs that already exist.
Congress can reduce funding for programs without reducing the amount of work that states have to do. It’s called an mandate. Usually, the remainder of the bill is picked up by the state and local governments.
The federal government, for example, pays for SNAP benefits. 2 Some unfunded mandates may also fall to the private sector.
Welfare vs. Entitlement
Each welfare program has different eligibility requirements. All welfare programs have a minimum income requirement. These income levels are usually set by the state, and they are based off the federal poverty line.
Note:
The maximum income level may vary depending on the circumstances of a household. In the Illinois SNAP case, households with disabled people or seniors over 60 years old can earn up to 200% the federal poverty line and still receive benefits.
The maximum income levels set by welfare programs are what make them different from entitlements programs. You must prove your eligibility for welfare benefits. However, anyone can receive entitlement programs as long as they paid into the program.
The benefits that these programs provide are often much higher than the contributions made by recipients.
The four main entitlement programs in the United States are:
- Social Security
- Medicare
- Unemployment Insurance
- Workers’ compensation
Different types of welfare programs
In the United States, there are six different types of welfare programs. Each program has a specific purpose.
Temporary Assistance to Needy Families
Temporary Assistance for Needy Families (TANF) is often referred to as “welfare” even though many other programs fall under this category. TANF helps families who are living in poverty.
The June 2020 figures include 505,487 adults and over 1.6 million children. In June 2020, 505,487 adult recipients and more than 1.6 million children were included in the figures.
These numbers may seem high. They represent only a small fraction of American families who live in poverty. According to the Center on Budget and Policy Priorities, in 2019, only 23% families with children who lived in poverty received TANF aid.
In 2020, the median monthly benefit for a three-person family receiving TANF benefits is $492.
Note:
Aid to Families with Dependent Children, or AFDC, was the predecessor of TANF. AFDC, which was originally created as part of Social Security Act in 1935, later became a controversial program.
In the 1970s, the public perception of welfare, which was then known as AFDC (the American Federal Domestic Assistance Program), deteriorated. President Ronald Reagan’s 1976 campaign highlighted a welfare fraud case and popularized the idea of a welfare queen.
In 1996, Bill Clinton replaced AFDC with TANF, bringing an end to the original welfare system.
Medicaid and the Child’s Health Insurance Program
Medicaid and CHIP offer health insurance. Low-income families can access medical care. Medicaid will help pay for more than 81 millions low-income adults, children and seniors’ care in September 2020. 11
CHIP
The Child’s Health Insurance Program is a special form of Medicaid for children. The program covers hospitalization, medical supplies, testing, eye exams and dental care.
Medicaid is responsible for a large portion of births in the United States. Medicaid is a major source of funding for births in states that provide this information.
New Mexico reported the highest number, with 71% of all births being funded by Medicaid in 2018. New Hampshire reported the lowest number, 26%.
The Affordable Care Act raised Medicaid coverage by 32.3%. It increased the maximum Income Level.
Supplemental Nutrition Assistance Program (SNAP)
SNAP, or food stamps, is a more common name for SNAP. In 2021, these government benefits assisted more than 42 millions people to buy food.
The average SNAP benefit increased by around $36 per person, per month. The average SNAP benefit per person increased by about $36 per month.
The Special Supplemental Nutrition Program for Women, Infants, and Children, or WIC, is a program that provides assistance to women who are pregnant, breastfeeding, postpartum, and to women who have recently given birth. It also helps children under five years of age. It provides:
- Food
- Vouchers
- Education
- Referrals
WIC was received by approximately 6.87 million people in 2018. More than 76% of those people were infants or children.
The Child Nutrition Program is another food-based welfare programme. This program offered free or low-cost meals to 29,4 million children in 2019. The federal government spent $14.1 billion on this program.
Supplemental Security Income
Supplemental security income gives extra money to low-income adults, children and families with disabilities. In January 2021, over 7.9 million people were receiving an average of $585.53 a month.
More than 6.7 millions of people receiving benefits were blind or disabled. 18
Earned Income Tax Credit
Earned income tax credit is a tax break for families with low income. For tax year 2020, for a family of 4 (married couples filing jointly), the income must be less than $53,330 to qualify for an estimated tax credit of $5920.
In 2018, more than 22 millions individuals and families received the EITC. In 2018, the average EITC credit for a family of four with children was $3,191.
Credits lifted 5.6 million people from poverty in 2018. Around 3 million were children. 20
Housing Assistance
Rental assistance is a common form of housing assistance. Housing assistance is often in the form of rental assistance.
Housing Choice Voucher Program is administered by local agencies to 2.2 millions families. 24
The Low-Income Home Energy Assistance Program (LIHEAP) is a similar welfare programme that offers energy assistance and weatherization programmes.
What are the benefits of welfare programs?
In a 2018 Rasmussen Reports poll, 61% of Americans believed that too many people depended on government financial assistance.
Many people have misconceptions about the beneficiaries of federal assistance.
Mitt Romney, the Republican candidate for president in 2012, said that 47% would vote Democrat regardless of what happened. He said that 47% of Americans vote Democrat, because they are “dependent on government” and do not want to see welfare programs reduced. 25
They are so busy trying to make ends meet that they don’t have the time to read up on political issues and go to the polls. Because they are struggling to get by, they have no time to learn about political issues or go to the polls.
The Tax Foundation’s and Gallup’s polls show that a majority of states that depend the most on federal assistance vote Republican.
Many voters who criticize welfare programs are unaware of the benefits they receive. They may not know that, for example, the deduction of home mortgage interest is considered a government benefit.
It is easier to only consider federal benefits that are visible, like welfare checks or food-stamps. Many voters are unaware that they also receive government benefits.
Undocumented immigrants are accused of using welfare programs to come to the U.S. The majority of welfare programs only benefit legal immigrants.
Other welfare programs also have restrictions.
Medicaid is the only federal program that provides benefits to undocumented migrants. Only in emergency situations are benefits allowed. Kaiser Health News reports that hospitals receive roughly $2 billion in reimbursements every year for emergency room expenses that are mostly associated with undocumented immigrant. 30
The Key Takeaways
- In the United States, welfare programs provide financial assistance to families with low incomes and children who are living in poverty.
- EITC is one of the six major welfare programs. Others include Medicaid, SNAP and SSI.
- These programs are different from entitlement programs such as Medicare and Social Security.
- The truth is that many negative stereotypes about people who receive welfare benefits are not based on fact.
