Social Welfare

The American Welfare State - Types of Programs:

Social Insurance - individuals contribute to an insurance trust fund by way of a payroll tax on their earnings and receive benefits based on their lifetime contributions.

	Social Security
	Medicare

Means-tested - benefits are distributed on the basis of need to those who can prove that their income is low enough to qualify.

	Food stamps
	Medicaid
	Supplemental Security Income (SSI)
	Housing-assistance programs
	Job training

Entitlements - payments are made automatically to people who meet certain eligibility requirements.

AFDC - Aid to Families with Dependent Children

How AFDC worked - AFDC distributed cash benefits directly to the poor, primarily to single-parent households with children.

Criticisms of AFDC:

AFDC Undermined the Work Ethic - people will lose the incentive to work because they are living reasonably on AFDC.

	AFDC Encouraged Family Disintegration - according to statistics, the rate of family disintegration and the level of welfare spending increased at the same time.
	AFDC Created a Permanent Dependent Class - welfare became a habit for some people and they were on it for long periods of time.

The New Welfare System

Major features:

	The families of poor children are no longer guaranteed assistance by the federal government.
	The design and administration of welfare programs have turned over to the individual states.
	States will receive block grants from the federal government to help them finance the welfare systems they devise.
	The head of every family receiving welfare is required to work within two years of receiving benefits and is limited to a total of five years of benefits.
	Unmarried teenage parents can receive welfare benefits only if they stay in school and live with an adult.
	Future legal immigrants are ineligible for benefits during their first five years in the United States.
	States must provide Medicaid to all who qualify under current law.
	The eligibility of poor people who are not raising children to receive food stamps is severely restricted.

Social Welfare

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