Welfare Benefits

In the United States, both federal and state governments have enacted so-called “welfare laws,” designed to provide a safety net for individuals and families with little or no income.

The Social Security Act of 1935

In response to widespread unemployment and poverty in the wake of the Great Depression, Congress enacted the Social Security Act of 1935, which established both the Social Security program and the unemployment compensation system. The act established taxes to be paid by employers to provide for benefits upon retirement, or in the event of the loss of a job.

The Social Security Act authorized federal grants to states to provide benefits to low income senior citizens, which has subsequently been expanded to provide benefits to blind and disabled persons as well. It is now known as Supplemental Security Income (SSI).

The act also put the federal Aid to Families with Dependent Children in place. That program, however, was discontinued in 1996, under the provisions of the Welfare Reform Act, replaced with federal block grants to each state. Under the Welfare Reform Act, a family may not receive federal assistance for more than a total of five years during the lifetime of the family. In addition, legal aliens are not eligible to receive any SSI benefits. A subsequent amendment also effectively excluded individuals seeking SSI benefits because of alcoholism or drug dependence.

State and Federal Cooperation in Welfare Laws

Most social welfare programs involve coordinated efforts between state and federal government agencies and programs. For example, Medicaid is a federally funded program, but is administered on a state-by-state basis.