Welfare Benefits

In the U.S., welfare benefits for individuals and families with little to no income was almost nonexistent before the Great Depression. With millions of people unemployed, the federal government saw income security as a national problem.

In addition to establishing two major "social insurance" programs to respond to future income loss (Social Security and unemployment compensation), the Social Security Act of 1935 launched federal grants to support state welfare programs for low-income elderly people and families with children. The former evolved into a federally administered program for the elderly, blind and disabled: Supplemental Security Income (SSI). The latter became Aid to Families with Dependent Children.

Both were supplemented by two important in-kind benefit programs also funded by the federal government: Medicaid and food stamps. People not meeting the eligibility criteria for these may qualify for purely state or both state and local relief, often called general assistance.

Welfare Laws

In 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act (Welfare Reform Act). The new law eliminated Aid to Families with Dependent Children, placed permanent ceilings on the amount of federal funding for welfare and gave each state a block grant of money to help run its welfare program. For example, under the law, federal funds may be used only to provide a total of five years of aid in a lifetime of a family. Another significant change was the complete exclusion of legal aliens from receiving any SSI benefits. The passage of the Contract with America Advancement Act of 1996 further narrowed the number of people allowed to receive SSI disability benefits by requiring that drug addiction or alcoholism not be a material factor in their disability.

The law governing entitlement and benefit to any one of these welfare programs is complex. Federal law applies to federal benefits, such as SSI, and, in some respects, to federally funded benefits administered by the states, as Medicaid is. Both federal and state programs must comply with constitutional standards in setting eligibility rules and procedures for applying them.

Last update: Oct. 1, 2008

The content on this page was developed in partnership with the Legal Information Institute, Cornell Law School.