# Welfare: What It Is and Who Qualifies

![Welfare](https://www.investopedia.com/thmb/BBLRwH0OhEVRjxP9BcZH_uZAAgs=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/Welfare_Sketch_final_rev-6c4e78b258d1480e82ef670f55c46ae0.png)

*— Investopedia / Michela Buttignol*

> **Definition**
>
> Federally funded assistance programs help individuals and families with housing, food, and healthcare costs.

## What Is Welfare?

Welfare is a common label attached to a range of government programs that assist individuals and families whose income falls below the poverty line. The programs provide health care, food subsidies, housing assistance, and child care assistance to those in need.

The benefits vary by state. Most are funded by the federal government, which distributes money to the states through a program called Temporary Assistance for Needy Families (TARF).

### Key Takeaways

*   Welfare refers to federal government-sponsored assistance programs for individuals and families in need.
*   The federal government grants money to each state through the Temporary Assistance for Needy Families (TANF) program.
*   Eligibility for benefits is based on income levels and family size.
*   Beneficiaries receive monthly SNAP food subsidies as direct payments to an EBT card.

## Who Qualifies

Benefits vary by state, with eligibility based on the person’s financial status, family size, income, or an assessed disability. A caseworker may be assigned to determine and confirm the applicant's needs.

Qualification is based on the poverty line for each state and allows for adjustments based on the local cost of living. The government requires that individuals or families seeking assistance prove that their annual income falls below the [federal poverty level](https://www.investopedia.com/terms/f/fpl.asp) (FPL).

Subsidized programs are only available to U.S. citizens and permanent residents. Federal law bans states from using grants to assist most legal immigrants unless they've resided in the country for five years or more. A valid [Social Security Number](https://www.investopedia.com/terms/s/ssn.asp) (SSN) is required to obtain benefits. Individuals applying for welfare must meet their states' requirements as well as rules imposed by the federal government.

## History of Welfare

The history of welfare programs in the United States is complex and controversial. In the 1960s, President Lyndon Johnson created anti-poverty programs including Head Start, food stamps, and [Medicare](https://www.investopedia.com/terms/m/medicare.asp). These programs were designed to fight what he called "the war on poverty" in America.

Former President Richard Nixon revised the program in 1969 with the Family Assistance Plan, which imposed work requirements and work incentives for beneficiaries.

In the 1980s, President Ronald Reagan cut welfare budget programs designed to help families and created "welfare to work" programs in 40 states.

Further legislation under President Bill Clinton in 1996 focused on limiting the length of time that people could receive benefits.

President Joe Biden brought back no-strings-attached assistance to families with children in 2021, but only as a temporary measure while the COVID-19 pandemic was raging. Eligibility extended to families with incomes well above the poverty line but was phased out at higher levels.

### Current Status of Welfare

The U.S. government currently assists people living below the poverty line mainly through a program known as Temporary Assistance to Needy Families (TANF).

The program mandates that all recipients find employment within two years or risk losing their benefits.

## Types of Programs

In addition to TANF, the government has several programs that subsidize costs for low-income Americans. Income eligibility levels vary by program.

*   **Medicaid:** Medicaid is a [health insurance](https://www.investopedia.com/terms/h/healthinsurance.asp) plan for those whose income falls below federal poverty standards. Pregnant women, children, people with disabilities, and aging adults who fall below certain income thresholds are guaranteed coverage under Medicaid. Medicaid enrollment increased under the [Affordable Care Act](https://www.investopedia.com/terms/a/affordable-care-act.asp) (ACA).
*   **SSI:** [Supplemental Security Income](https://www.investopedia.com/terms/s/ssi.asp) (SSI) is administered by the [Social Security Administration](https://www.investopedia.com/terms/s/ssa.asp) (SSA). It provides public assistance to children and adults with disabilities including blindness, neurological challenges, respiratory disease, and failure to thrive.
*   **SNAP:** Administered by the states, the [Supplemental Nutrition Assistance Program](https://www.investopedia.com/supplemental-nutrition-assistance-program-snap-5187718) (SNAP), formerly known as the Food Stamp Program, provides payments to low-income households to buy food. The Special Supplemental Food Program for [Women, Infants, and Children](https://www.investopedia.com/women-s-infants-and-children-s-program-wic-definition-5186356) (WIC) and the Child Nutrition Program serve children. The Child Nutrition Program is an umbrella for the National School Lunch Program, the School Breakfast Program, and the Summer Food Service Program.
*   **CHIP:** The Child’s Health Insurance Program is administered by the [U.S. Department of Health and Human Services](https://www.investopedia.com/terms/u/us-department-health-and-human-services-hhs.asp) (HHS). It provides low-cost health care to children in households that don't qualify for Medicaid. This program covers benefits for children including dental care. Special needs assistance such as physical and occupational therapy provide a safety net for children in low-income homes.
*   **Housing Assistance:** The [housing choice voucher program](https://www.investopedia.com/terms/h/housing-choice-voucher-program.asp) helps families below federal poverty standards, people with disabilities, and aging adults access affordable and livable rental homes in safe neighborhoods. Vouchers are distributed by local public housing agencies that receive funding from the federally-run [U.S. Department of Housing and Urban Development](https://www.investopedia.com/terms/u/us-department-housing-urban-development-hud.asp) (HUD) office. Families or individuals pay the difference between the [market price](https://www.investopedia.com/terms/m/market-price.asp) of the rent and the amount subsidized by the voucher program.  
    
*   **EITC:** The [Earned Income Tax Credit](https://www.investopedia.com/terms/e/earnedincomecredit.asp) (ETC) is a tax break for low to moderate-income individuals and families. 

> **Important**
>
> According to the Department of Agriculture, 42.5 million people in 22.7 million households benefited from SNAP vouchers in FY 2025.

## What Is Considered Welfare?

Welfare is a term that dates from the 1960s for government-funded assistance to low-income Americans, in the form of weekly direct payments that could be used for any purpose. The word welfare has been largely banished from government documents.

Today, a number of federal programs provide subsidies for housing, food, and healthcare to individuals and families whose income falls below the federal-established poverty line.

The term welfare was particularly associated with long-term payments with no strings attached to unemployed people. Since 1996, eligibility for such payments is mostly limited to two years or less for able-bodied recipients.

## What Is the Difference Between Welfare and Entitlements?

Entitlements are federally funded programs that benefit Americans who qualify for them. These are not tied to income but to age, work history, and contributions from payroll deductions during their working years.

Entitlements include Social Security benefits for retirees and Medicare coverage for the elderly, which are partially funded by the recipients through payroll deductions.

The term welfare is now rarely used. It became a loaded term in politics as early as the 1960s and was often characterized as free money for the underdeserving.

## What Welfare Programs Does the United States Provide?

U.S. programs that might be termed welfare include Medicaid, Supplemental Security Income, Supplemental Nutrition Assistance Program, the Children's Health Insurance Program, Temporary Assistance for Needy Families, housing assistance, and the Earned Income Tax Credit.

All are programs available only to people and families whose income falls below certain levels.

## The Bottom Line

The term welfare is not often used in recent years. The welfare system of the mid-20th century has been largely replaced by programs that target the essential needs of low-income individuals and families. Food, medical services, and rent subsidies are available to those who qualify. Taxpayers fund these programs from which recipients often receive biweekly or monthly payments in the form of vouchers or direct payments.

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