The Distribution of Income: Government Assistance to The Poor

Government Assistance to The Poor There's reason for all of us to be concerned about the problem of poverty. Religious institutions and philanthropic organizations have traditionally tried to aid the poor through charitable contributions, but many people don't contribute in the hope or belief that others will help. Because of this "let George do it" attitude, charitable contributions are an unreliable means of assisting the poor. Charitable contributions are also unstable, because in periods of decreased employment and income, when the number of poor is likely to increase, the ability and willingness of others to contribute is likely to decline. The unreliability of private charity has led government to establish programs to assist the poor. People support such programs for a number of reasons: 1. They believe there are benefits to all when the number of poor in the society is reduced. A society with masses of poor people is ripe for revolution and turmoil. Most people are well aware of this and support government programs to ensure that everyone has a certain minimum standard of living. In addition, most people have genuine compassion for the poor and support programs of assistance on humanitarian grounds. 2. Programs of assistance to the poor are viewed as "safety nets," providing assurance to everyone that their standard of living won't fall below minimally acceptable levels. If some catastrophic event sends them into poverty, people know that their support of poverty-assistance programs will provide benefits to them. Eligibility for Government Assistance to the Poor In the United States, the government programs that have emerged to assist the poor have strict eligibility standards. These standards, although subject to guidelines set by the federal government, vary from state to state. Welfare programs are government programs designed to assist the poor who are unable to work. The groups eligible for such assistance include the disabled, the aged, and families with dependent children headed by females or disabled males. Single people who are not disabled, elderly, or who do not have dependent children, even if they are poor, are not eligible for the major programs of government assistance. Similarly, ablebodied males heading a family are not usually eligible. People become eligible for assistance if their income is below certain levels. A means test establishes the fact that people in the groups eligible for welfare payments have incomes and property below the amounts that are minimally acceptable. People who are in the eligible groups and also pass the means test are automatically entitled to government assistance. Therefore, government welfare programs are sometimes called entitlement programs. Federal Programs to Aid the Poor Federal programs to assist the poor in the United States can be divided into two broad categories: programs of cash assistance and programs of in-kind assistance. The first type of program simply provides eligible people with financial support in the form of money income. The recipients can spend their welfare checks as they please. The second type of program provides those who qualify with services or assistance to purchase a certain good or service. Some in-kind assistance allows eligible people to rent government-supplied housing at a reduced price. People must pass a means test to be eligible for benefits from these programs. The following programs (summarized in the table in Box 5) are specifically designed to aid the poor.