Social Welfare System: Definition and How It Works

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Julia Kagan
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Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.

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Updated July 29, 2024
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Social Welfare System Social Welfare System

What Is a Social Welfare System?

A social welfare system refers to a broad network of programs, subsidies, and supports available to provide financial and material assistance to individuals and families in need.

The types and amount of welfare available to individuals and families vary depending on the country, state, or region. Eligibility for benefits typically also depends on income and assets.

Key Takeaways

  • A social welfare system offers assistance to individuals and families in need, with such programs as health care assistance, food stamps, and unemployment compensation. 
  • Lesser known parts of a social welfare system include disaster relief and educational assistance.
  • Eligibility for benefits is based on a number of factors, including income levels and family size.

How a Social Welfare System Works

Social welfare systems provide assistance to individuals and families through programs such as health care, food stamps, unemployment compensation, housing assistance, and child care 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 how it relates to the minimum acceptable levels within a particular state. The factors involved can include the size of the family unit, current income levels, or an assessed disability.

The benefits that an individual or family receives as part of a social welfare system will vary by state, as will the eligibility requirements. 

Within each state, social welfare systems may go by different names, 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 items such as cost of living that are not standardized across the country.

Benefits of Social Welfare Systems

Available benefits generally cover assistance for food, housing, child care, and medical care.

Some available housing benefits go beyond locating suitable and affordable properties and providing housing cost assistance. A household may qualify for assistance to complete certain energy efficiency upgrades. It may also receive funds to help pay utility bills.

Benefits around health and nutrition can include access to affordable medical care. Food and nutrition programs may supply funds, often referred to as food stamps or the Supplemental Nutrition Assistance Program (SNAP), to provide easier access to food in general. Additional nutritional assistance through the Women, Infants and Children (WIC) program provides food-specific benefits to ensure pregnant women and young children have access to healthy food options to promote growth and development.

Other programs that are part of the social welfare system include disaster relief assistance, educational assistance, agricultural loans, and services specifically for veterans.

The federal government also provides block grants to each state through the Temporary Assistance for Needy Families (TANF) program. TANF funds are provided to the states for distribution. These funds may be used for cash assistance, allowing a household to spend the funds as it deems necessary to meet its needs and obligations.

What Are Examples of Social Welfare?

In the U.S., there are numerous government programs that together make up the social welfare system. At the federal level, programs include SNAP, which provides monthly payments to support the purchase of food, and Medicaid, which provides low-income families with health insurance. At the state level, resources vary but include the likes of energy subsidies, cash assistance, housing vouchers, and job training programs.

What Is Another Word for Social Welfare?

Other terms used to refer to social welfare include public assistance, public benefits, and the social safety net.

What Is the Problem with Social Welfare?

Social welfare programs are generally welcomed by policymakers and constituents, who say that they provide a safety net for unexpected circumstances like job loss and poverty. However, social welfare has also drawn criticism. Common arguments against social welfare include the idea of welfare dependence, a state in which an individual relies heavily on public benefits programs without contributing to them. Other criticisms include potential high costs to taxpayers and potential inflationary risks of large-scale welfare spending.

The Bottom Line

A social welfare system provides assistance to individuals and families in need. Social welfare systems vary by region but typically may include nutrition support, cash assistance, housing support, and vocational training. To qualify for social welfare, programs typically impose income and wealth-based eligibility criteria.

Article Sources
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  1. Benefits.gov. "Weatherization Assistance Program for Low-Income Persons." Accessed Sept. 29, 2020.

  2. Benefits.gov. "Low Income Home Energy Assistance Progra (LIHEAP)." Accessed Sept. 29, 2020.

  3. Benefits.gov. "Supplemental Nutrition Assistance Program (SNAP)." Accessed Sept. 29, 2020.

  4. Benefits.gov. "Special Supplemental Nutrition Program for Women, Infants and Children (WIC)." Accessed Sept. 29, 2020.

  5. Benefits.gov. "Temporary Assistance for Needy Families." Accessed Sept. 29, 2020.