Social Security Versus Welfare


Social Security and Welfare

 

Social Security provides income to people who have stopped working, be it from reaching a certain age or becoming disabled. There are roughly 168 million people paying into the system and around 60 million people who receive Social Security benefits. Of the latter, around 42 million are collecting retirement benefits.

Understanding Social Security

The taxes that pay for each person’s Social Security benefits do not go into individual accounts. Instead, the money is pooled. "The benefits received by today’s retirees are funded by the taxes paid by today’s workers; when those workers retire, their benefits will be paid for by the next generation of workers’ taxes," explains Pew Research Center. "Your benefit amount is based on your earnings history and age at retirement, not on how much you and your employer paid in Social Security taxes."

Understanding Welfare

In contrast, eligibility for welfare or public assistance is determined by need and a means test. As a result, administrative discretion is central to the concept of welfare but fairly minimal in Social Security benefits. In addition, welfare is neither work-related, nor are people required to contribute to public assistance programs in order to receive welfare benefits.

Welfare also has a different connotation. Whereas Social Security is designed to help prevent dependency on the government for survival, welfare programs provide care for people without other options.

Social Insurance and Public Assistance

There are some 109.6 million Americans living on some type of welfare or public assistance, but that figure can be misleading. Welfare can take on many different meanings. It includes a program called Temporary Assistance to Needy Families (TANF) but it also includes WIC (Women, Infants and Children) food program, food stamps and Medicaid.

In addition, welfare can include people who are working but do not earn enough to live comfortably. "Just because you’re receiving means-tested benefits doesn’t mean you’re not working," explains Politifact. "According to 2012 Census Bureau data, roughly 23 percent of households with at least one working adult received means-tested benefits … [and] roughly 60 percent of food stamp recipients who were of working age and weren’t disabled were employed while receiving benefits."


 

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