State and local governments may make up some, but not all, of the difference. More than one-fourth of all Americans received benefits from one of the key welfare programs in 1994, but only 41 percent of the recipients had incomes below poverty after accounting for the income from government assistance programs. Because most welfare programs are targeted at children, people living in families were much more likely to benefit from a government program than people living alone or in a nonfamily household. Over three-quarters of poor families participated in at least one of the five key programs, while less than half of the poor in nonfamily households participated in such programs. The March 1995 Current Population Survey revealed that less than half of all children in poverty lived in families that received cash welfare assistance.
Most poor families receive benefits from two or three programs simultaneously.
Participation in one of the main government welfare programs often assures eligibility for other welfare programs. AFDC participants, for example, were automatically eligible for Medicaid and food stamps. With the elimination of the AFDC program and introduction of tighter eligibility criteria in 1996, patterns of welfare use may change. Welfare programs provide basic sustenance, housing, and health care to poor and low-income families, but they have surprisingly little impact on the official poverty rate. Means-tested government cash benefits lifted about 3 million people out of poverty in 1994, lowering the poverty rate by 1 percentage point over what it would have been.