20 Advantages and Disadvantages of Welfare

Welfare is a government program that offers financial aid to groups or individuals who have an inability to support themselves in some way. Most programs receive funding through taxpayer support, making it possible for families and individuals to cope with the financial stresses that occur during rough patches of their lives.

Most of the people who enroll in a welfare program receive 1-2 payments per month, received every 2-4 weeks. The goals of these safety net options vary based on the purpose of the support given, but most of them pursue a better standard of living, educational opportunities, or employment assistance.

These initiatives have protections in place to prevent abuse as well. The Temporary Assistance to Need Families (TANF) from the U.S. government mandates that recipients find work whenever possible within a specific timeframe or they will risk losing their benefits. Most of the help given to qualifying households is offered free of charge or subsidized costs for steep discounts.

There are several advantages and disadvantages of welfare to consider.

List of the Advantages of Welfare

1. Welfare programs help people during their greatest time of need.
Most welfare programs are not designed to be a long-term income solution. The idea of a “welfare queen” just doesn’t exist in reality. You get enough to meet your basic needs and nothing more. Even though some people might waste their funds on steak and lobster instead of purchasing enough food to get through the entire month, there is a measure of responsibility that some individuals need to learn.

Welfare also provides a safety net to individuals with disabilities that might prevent them from working in a traditional capacity.

2. There are usually caps placed on welfare benefits.
One of the easiest ways to prevent fraud or long-term benefit acquisition is to place a cap on how many benefits an individual or household can receive during the year. Some states have this policy for TANF benefits where additional assistance isn’t given to children who are conceived and born to parents already in the program. As of April 2019, there were still 13 states where this policy is in effect.

Massachusetts households that consist of a single parent with one child on TANF could receive a maximum of $478 per month. If there are two children being cared for in this family, then an extra $100 becomes available.

3. Welfare programs can reduce criminal activities in low-income areas.
Even though the general public associates welfare with crime-ridden, low-income neighborhoods, the opposite impact occurs in the United States. In a 2011 study of a dozen significant cities in the United States, there was a direct correlation to the cycle of welfare payments and the commission of crime. The lowest levels of conflict occurred in each city when families received access to their next round of benefits. This information presents the conclusion that most criminal activities occur because of financial need.

4. More children receive help through welfare than any other demographic.
The majority of individuals who receive welfare benefits through the six primary programs offered in the United States are children. Half of the total caseload in any given month at the state and national level involves cases that only involve kids. About 75% of all TANF applications include families that have at least one child. Despite all of this need, the average payment received from the program was just over $300 per month.

Most of the families with children who receive TANF in the United States will receive SNAP benefits too. A few receive subsidized childcare and housing while working full time through all of these challenges.

5. Most welfare programs provide help to the people who need it the most.
One of the most famous cases of welfare fraud occurred in 2017 when a dozen people were charged with bilking a food stamp program out of $20 million. This enterprise involved a series of convenience stores in Florida that were illegally exchanging benefits for cash at a lower value, and then redeeming the items personally. When there isn’t extensive oversight over a financial program, then the risk of abuse rises. That’s not the fault of the poor households who need financial help. It’s an issue at the political level.

6. Welfare benefits supplement the incomes of working parents.
Working parents often receive welfare benefits as a way to help supplement their income. Almost 30% of low-wage employees in the United States are single parents, working in that job because of the schedule flexibility it offers them to manage their family.

Individuals must often pass a drug test to become part of this demographic. They might be required to have their credit scores at a certain level to qualify for benefits, with employment references are often mandatory. Specific criminal offenses can even directly disqualify someone receiving benefits. Those who eventually make it through the application process to receive these benefits are netting about $9 per hour.

7. Welfare programs don’t give benefits to everyone.
Illegal immigrants and undocumented workers do not receive welfare benefits unless exceptional circumstances apply. A work visa is necessary as evidence for a person’s ability to legally work in the United States to qualify for any program benefits.

If a legal worker loses their job, cannot find one, or cannot maintain a specific standard of living, then their permission to stay in the United States gets revoked. Some nations take this provision a step further by requiring anyone who receives welfare benefits to be a naturalized citizen.

8. It allows a family to survive devastating financial circumstances if they occur.
We purchase insurance to cover our losses in a variety of ways. Most people have policies for their cars, home, and possessions. Life insurance helps to guard against an unexpected loss of income. That’s what welfare programs are too – an insurance policy that allows people to keep going despite sometimes extraordinary circumstances.

Capitalist societies can force people out of work even when they have done nothing wrong. That’s why governments often see the use of a welfare program as a form of socioeconomic insurance. Even though some people receive benefits for free, the money from those benefits still gives the local economy a boost.

9. The people who receive welfare benefits can see an improvement in their health.
There is a direct relationship between an individual’s wellness and their ability to earn an income. Those who don’t have employment prospects or access to healthcare have a shorter lifespan compared to those who have at least one of these options. Many welfare programs require specific healthcare measurements as part of the qualification process to have benefits given to families.

WIC, for example, requires children to have blood tests administered by a nurse in the program to ensure they are receiving the correct nutritional content in their meals. Failing to use the funds given in appropriate ways will reduce the amount offered or disqualify the family from the program.

10. There is a reduction in poverty within a community because of the presence of welfare.
The number of people living in poverty above the age of 65 in the United States fell by five percentage points, from 14% to 9%, from 1992 to 2016. The overall poverty rate for Americans is hovering around 10% as well. Some states, such as Minnesota, are seeing even lower rates – in the range of 5% for some population grounds.

That’s why an argument against offering welfare benefits impacts children more than anyone else. By closing income gaps for parents, whether they work or not, it is easier for the next generation to have successful learning opportunities.

List of the Disadvantages of Welfare

1. Welfare programs do not offer enough money to make a significant difference.
The federal income requirement for welfare benefits in the United States was to earn less than $12,140 in 2018. Families could then add another $4,320 for each additional person in the home. This combination of family size and income becomes a problem for those who legitimately need this form of help. If there is a two-parent, four child household where only one parent works, a job that pays less than $17 per hour could disqualify the family for any benefits.

That means families are forced to look for other community resources, such as a food bank if they are unable to make ends meet.

2. People who take welfare benefits face numerous negative societal reactions.
The families who accept welfare benefits are often treated as being a subordinate part of society. Individuals in this situation are viewed as being apathetic, unwilling to find employment, and untrustworthy. Several state governments have looked at stiffening the requirements to receive welfare benefits to reduce these stigmas.

Work or training qualifications may apply before any benefits go toward the family in need. Some states have started mandating drug testing as part of the welfare system. These actions intend to help individuals to lift themselves out of poverty, but it also causes those who receive benefits to be treated as secondary citizens.

3. Welfare program supports are often inconsistent in their application.
States are permitted to set many of their own rules on who receives benefits thanks to the provisions of federal block funding. This disadvantage means that a family might qualify for welfare benefits in one state, but not in another one. It is an issue that can restrict access to welfare because some households might think they don’t qualify for benefits. Why bother to submit an application if you expect a rejection?

This inconsistency also means that some states might not offer access to specific benefits and programs. When the Medicaid expansion was permitted with the passage of the Affordable Care Act (Obamacare), 18 states opted against providing any extra services.

4. Welfare doesn’t make an effort to address the issue of poverty.
Welfare programs are like an economic Band-Aid that households can use to stay afloat in challenging economic times. What these efforts are unable to provide is an opportunity to address the root causes of poverty in the first place. There are several reasons why someone might lose their job today. Artificial intelligence, automation, downsizing, and other economic forces could cause a 50% reduction in employment in today’s industries over the next decade.

That’s why 2020 presidential candidate Andrew Yang suggests that a universal basic income is a way to counter the future economic issues we could encounter. The Freedom Dividend he proposes a guaranteed amount, regardless of work status, to each adult in the United States.

5. Welfare programs can create patterns of dependence for some families.
Supporters of welfare would suggest that it is the responsibility of a developed society to take care of the people who are unable to do so on their own. The problem with this approach is that when someone is no longer responsible for their personal care, there is no longer a need to improve their circumstances. The benefits that come from these safety net programs can create dependencies for some families because there’s no incentive to learn a new skill. That’s why there are program caps paid to households, especially if there are no children in the family unit.

The goal of welfare programs should be to remove as many people over time as possible because their standard of living increases. That’s why the overall benefit amount people receive only takes care of their most basic needs – and sometimes it doesn’t even manage to accomplish that outcome.

6. The cost of oversight for these programs is an expense we don’t often budget.
Most countries see a welfare fraud rate of 1% or less. That’s five percentage points lower than what the average business expects to see over a year. When audits of the Social Security program went through in 2012, the oversight committee found that 25% of payments were going to people where the evidence of need was contradictory, insufficient, or incomplete. Since the private sector has more ways to push for accountability than the government, one of the proposed ways is to take these programs toward privatization.

7. It teaches children to rely on government supports instead of their ingenuity.
It is not unusual for the cycle of welfare reliance to continue happening across multiple generations. Kids that grow up in a household where benefits are a regular part of the financial situation are more likely to find themselves relying on these funds as an adult. There are even 11 states where these programs can pay some qualifying families more than what the salary for a teacher would be in that community.

As of 2018, recipients in Hawaii under the right set of circumstances can qualify for almost $50,000 per year while making a minimal commitment to work.

8. Applications are necessary to access welfare program benefits.
Only 2 out of every 5 qualifying families accesses welfare benefits. The reason why the figure has dropped by 50% over the past 20 years is that the necessary interactions to obtain the help needed can be prolonged, stigmatizing, and a lot of work to complete. Since there are higher levels of bureaucracy involved in the process, the work naturally limits the people who’d apply. This figure remains consistent at local, state, and national levels of oversight.

9. The cost of welfare programs is massive.
The United States spends over $1 trillion each year to support every means-tested welfare program currently operating. Almost half of those costs go toward providing healthcare-related services. That means $400 billion goes toward housing assistance, food needs, and direct monetary assistance. That’s 10 times the amount that Oxfam estimates would be needed to cure world hunger, which means the level of inefficiency in the system could be massive. Americans spend more on these benefits than what the average budget is for almost every other country in the world.

Even though the average daily benefit for a welfare program is only $25, that figure places someone in poverty in the United States in the upper-fifth of global income.

10. It goes against the principles of capitalism.
There is a specific need for personal responsibility in society. Even though we can help one another when there are challenging circumstances, individuals need to have some level of responsibility for their own well-being. Since over 40% of families have no savings and are living paycheck-to-paycheck, there is almost no way for the average person to recover from an unexpected expense in American society today. Under the principles of capitalism, you’re either productive and contribute or you do not and get left behind.

Instead of having the government interfere with the national economic system, the households that need help could access local resources to find the benefits they need.

Conclusion

Government welfare programs target those who have little or no income. These supports benefit children, the disabled, and senior citizens most often with food stamps, vouchers, healthcare options, and housing assistance. Most opportunities are only available to legal citizens of the country where the financial benefits are offered.

The United States requires that each applicant has a valid Social Security number to complete their paperwork. If a household applies for welfare benefits, then each member must have their SSN. There are specific state requirements to meet in some situations as well.

Fraud is a legitimate concern for welfare programs, but most states see a rate of abuse that’s at 3% or lower. The benefits of helping those who need assistance the most far outweigh the potential disadvantages and cost of this safety net, which is why most developed nations offer help like this in some way.

Author Biography
Keith Miller has over 25 years experience as a CEO and serial entrepreneur. As an entreprenuer, he has founded several multi-million dollar companies. As a writer, Keith's work has been mentioned in CIO Magazine, Workable, BizTech, and The Charlotte Observer. If you have any questions about the content of this blog post, then please send our content editing team a message here.

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