17 Huge Advantages and Disadvantages of Welfare

Welfare is a government program which works to provide financial aid to groups or individuals who cannot support themselves for some reason. These programs receive funding through taxpayer support, allowing families, households, and individuals to cope with financial stress during a rough patch in their life. Most of the people who receive benefits through these safety net programs receive a payment 1-2 times per month.

The goals of welfare vary based on the structure of the program. There are some which help people to find work when they are unemployed unexpectedly. Some make education a priority to help someone earn their GED, finish a diploma, or earn a vocational certificate because their current training is no longer relevant to the economy. Even a better standard of living is possible because of these programs.

Government welfare programs are designed for permanent residents and legal citizens of the country supplying the funds in most instances. Federal law in the United States bans state governments from using grants to assist most legal immigrants unless they can prove 5 years of residency. If a household has more than one person, then everyone must have a Social Security number. Additional requirements may be necessary as well.

List of the Pros of Welfare

1. Most welfare programs are designed to get people back on their feet.
The design of most welfare programs around the world is to provide individuals with enough resources to maintain the basics of life. It is a way to help families get back on their feet after difficult circumstances, provide assistance for those pursuing an education, or to encourage someone to get back into the workforce after their primary career was eliminated in our community for some reason.

Welfare programs are not long-term solutions in most countries. These programs are supposed to provide a safety net when something unexpected happens in their life. It supports individuals who have a disability and may be unable to work for some reason. That is why most programs either cap the amount of time someone can receive benefits or limit the number of qualifying applicants.

2. Welfare programs support children more than any other age group.
The primary beneficiaries of a welfare program are the children who face challenging financial situations. A significant majority of the people who receive benefits in the United States from welfare programs are kids. 75% of the applications to the TANF program each year involve families with children. Almost 90% of the families with children who live at or under the poverty line receive medical benefits of some type which qualify as welfare as well.

The average payment to a one-child family is under $350 per month in the United States under TANF. When families also qualify for SNAP, about 8% receive subsidized childcare so that the parents can work. Another 12% receive some type of subsidized housing so that they could meet their monthly rent or utilities obligations.

3. Welfare only goes to the people who qualify for the program.
The vast majority of people who apply for welfare benefits need to have them for some reason. Many of the families in the United States who use these safety net programs are already working at least part time. Almost 30% of the people to fit into this category are single parents, and often single mothers who are struggling to find any type of work in their community. Most of the people who qualify for welfare and have a job are earning less than nine dollars per hour. Even single parents with a specific criminal background do not qualify for some programs.

In most situations, you must be able to provide proof of citizenship in order to qualify for the welfare program. Most states will require you to prove your financial circumstances as well. Some programs even require an applicant to actively search for employment in order to receive their monthly benefit. This structure makes it easier to find instances of fraud that can cost taxpayers millions of dollars each year.

4. It provides an income supplement to those who are already working.
A report released in 2015 found that almost 75% of people who receive public assistance are members of the family helmed by someone in the workforce in the United States. As reported on by The Daily Beast, this study found that the federal and state governments in America are spending more than $150 billion each year on four anti-poverty programs used by working families.

The researchers discovered that taxpayers are using these programs as a way to supplement their regular salary so that they can make ends meet each month. A small percentage of these workers were even employed full-time during the survey period. That means the perception that people on welfare are just trying to collect a free check is not always correct.

5. Welfare programs can help to reduce poverty.
Before the welfare reforms passed in the 1990s, about 15% of seniors were living at or below the poverty line in the United States. By 2016, that figure had been cut to below 10%. At the same time, the overall rate of poverty in the country fell to 13%. Contributing factors to this benefit include the availability of welfare programs, distribution of Social Security benefits, and active encouragement to save money whenever possible.

Welfare programs close income gaps because they provide resources to those who need it the most. The benefits create an income source for local businesses who accept money from WIC, SNAP, or TANF in the United States, which helps support the local economy even further. In this situation, a rising tide tends to lift all of the boats.

6. The presence of welfare programs works to reduce income inequality.
We have seen an increase in the levels of welfare program usage over the past 40 years because of ongoing changes to the tax code. In the 1950s, an era which is often referred to as the “Golden Age” of the American economy, the highest tax rate in our progressive system was above 90%. Now that rate is one-third of what it used to be. Instead of creating community supports, we are using this safety net program to subsidize what was already in place. It is the one defense that we have against the ravishes of income inequality.

As the rate of membership plummets in these programs, the amount of income earned by the top 1% in the country continues to rise. Even with the potential for fraud in the system, it is helpful to have these programs in place to ensure that everyone can have a fair chance to pursue happiness.

7. It improves the healthcare situation for families in poverty.
There is a direct impact between the health of an individual and their ability to find a job which supports the financial needs of their household. If someone is unable to maintain a job or have access to proper care, then they have a higher risk of encountering an early death compared to those who do. Many welfare programs require specific items to be part of the received benefit as well, such as low-fat cheese, fruits, and vegetables. WIC even administers blood tests to children to ensure that their iron counts are reflective of the benefits given to each family.

8. Welfare programs reduce the risk of societal collapse.
Most families carry insurance policies to protect their automobiles, homes, and possessions against catastrophic loss. That is what a welfare program does on a societal level. There are times when hard-working people lose their employment through no fault of their own. If there is no way to support them and their household through that experience, then their productivity will permanently disappear from society unless they can find another job quickly. By providing insurance that offers food and shelter during this stressful experience, we can get the people who want to work back into the labor force once again.

List of the Cons of Welfare

1. Overworked administrators can easily miss instances of severe fraud.
The U.S. Department of Labor believes that about 2% of all welfare payments which are distributed each month are attributed to a fraudulent application. There are about 3 million households currently receiving a benefit in this category right now. Although most families get what they need, people like Linda Taylor took over $150,000 each year in tax-free income through the use of 80 different names and 30 fake addresses to collect food stamps. She was also receiving the Social Security benefits for four deceased husbands who did not exist.

Wael Ghosheh took nearly $1 million in government welfare funds illegally. Dorothy Woods took $377,000 in public aid to which she was not entitled. The Shalhout family even used their business to give customers 50% of their benefits in cash, and then pocketing the rest to buy a vacation home in Israel.

2. It can encourage corporations to pay less-than-competitive wages.
Welfare programs do more than help families get the basic essentials that they need for daily survival. These funds also make it possible for some of the largest corporations in the world to pay wages that are less than competitive. The expansion of Walmart is one such incidence of this potential disadvantage. The organization benefits from over $1.2 billion in free land, tax breaks, outright grants from governments, and low-cost financing. Taxpayers also provide an indirect subsidy by paying the healthcare costs of Walmart employees who do not receive coverage on the job and work through a public program like Medicaid.

3. This support system is not as effective as it could be for some families.
Welfare programs in the United States are more of a supplementary form of income than a wage substitute. The federal poverty requirement to receive benefits for a single person without children was to earn $12,000 or less during the year. Adding another person to the household created an additional $4,300 of extra income someone could earn before their benefits were cut. The reality of this program is that a single parent earning about $17 per hour will not qualify for most benefits, even though they may not be earning enough to support their entire family.

4. Using welfare benefits can create a negative reaction to you in public.
The people who use welfare benefits often try to shop early in the morning or late at night because of the way other people in the community react to their use of benefits. WIC families encounter high levels of resistance at the grocery store because each check they receive must be processed individually by the cashier. That means a couple weeks’ worth of benefits might require 6-8 unique transactions. The administrative work to process these payments takes time, which means other customers are forced to wait for the cashier to finish.

Instead of finding ways to help the family out of poverty, the typical reaction is to shame the person who needs to access welfare. Some programs even require periodic drug testing as part of the ongoing qualification process. The goal of this safety net might be to lift people out of poverty, but it typically creates a divide in society that strengthens the differences between the “haves” and the “have nots.”

5. Welfare supports are not consistent.
Unless the welfare program is administered by the national government, there is little consistency to be found in the structure of this safety net. Families who qualify for services in one state may find that they are unable to apply if they move somewhere else. Access to these programs is often not communicated clearly at the community level either, which creates uncertainty as to whether or not a family should apply. Because the federal government in the United States provides block grants to administer these programs, there can be some places where welfare benefits are available and others where it is not.

6. It does not attempt to address the core problem of poverty.
Our world is a rapidly changing place with automation and artificial intelligence quickly dominating numerous industries. Technology is quickly changing the way that we can be productive in today’s world. Even industries which are typically creative, such as graphic design and content writing, are discovering that tools like dictation or AI learning separate the elite from those who are just breaking into the business for the first time. Over 500,000 jobs could be lost in the next decade due to this issue.

Welfare programs are designed to be a temporary benefit that can help someone get back on their feet. It is not designed to address the core issues which create poverty in the first place. Although there are some opportunities to pursue additional job training and educational programs, most of these safety net benefits provide emergency assistance to prevent starvation and homelessness.

7. Some families may develop a pattern of dependence with their welfare benefits.
It may be our responsibility as a society to provide help for those who are unable to help themselves in some way, but we must also recognize a pattern of dependence when one emerges. Some households find themselves relying on welfare benefits as a way to make ends meet without pushing towards a better job, education, or paycheck. There is no incentive to work harder if the benefit provides enough monetary resources to live a comfortable life. This disadvantage is why many applicants find that there is a maximum amount they can receive if approved for a program.

The average family in the United States receiving welfare benefits earns $25 per day through their program. That places them in the top 20% of income earners in the world today. There are 11 states in the U.S. where qualifying families can earn a higher amount than the pre-tax wages of some rural teaching positions. Hawaii offers a total maximum safety net value of $49,000 per year with its higher cost of living.

8. The cost of welfare programs can reach extreme levels.
When you combine the costs of all welfare programs in the United States, the amount that taxpayers spend each year reaches more than $1 trillion. About half of the expenses that the general population subsidizes through this structure is directed towards healthcare needs. 40% of the funds go toward direct cash assistance, housing costs, and food expenses. It is notable that this amount is more than the annual budget of all but about 20 countries in the world today.

Even with this high level of spending, about 20% of American children still live in households classified as being food insecure. Some kids still receive only one meal per day at school because of the financial situation their family faces. That means we are spending a lot without getting much in return from this investment.

9. Welfare programs are not an automatic process.
The United States passed a series of welfare reforms in the 1990s which were intended to reduce the amount of fraud that occurred within the system. Before this legislation passed under the Clinton Administration, about 85% of qualifying families were receiving benefits based on their financial situation. Over the next 10 years, that figure would drop by more than 50%, with only 40% of qualifying families participating in the various cash assistance programs available to them at the state and national level.

Our reforms were meant to reduce the amount of fraud in the system, but what it really did was take away the number of families receiving benefits who needed them.

Verdict on the Pros and Cons of Welfare

Welfare programs work to balance the need of a household having enough to meet the basic necessities of life while encouraging a development of personal skills and ambition to make things better one day. When someone falls on hard times, this safety net can help to get them back on their feet again. Although there will always be a select few who try to take advantage of these programs, it typically helps more people than it hurts through fraud.

We can do better in our efforts to prevent fraud and limit costs. The only way we can fix the problem is to identify those who do not qualify for benefits in the first place. Governments are using drug testing, work requirements, and other changes to the system as a way to identify outliers that may be profiting from the system. Some may be making changes to further shame those who must apply for benefits in the first place.

The pros and cons of welfare show us that there isn’t an easy answer to the problem of poverty. We must be willing to be the keeper of our brothers and sisters as a way to lift them up, even if some people might see it as a hand out instead of helping to life them up.