Where Does Money For Welfare Come From?
There are a number of welfare programs that provide financial assistance to those who are in need. Those who live under the minimum level of accepted means as defined by each state may be eligible to receive welfare in order to pay for bare essentials such as food and housing along with unemployment. There are many umbrella programs under welfare which people may or may not qualify for, such as child care, child support, medical assistance, and assistance with getting food.
Funding for the Program
Without help from the taxpayers, welfare programs could not exist. The fact is that those who pay taxes are responsible for supporting the welfare program and all of its umbrella programs. Money is taken out of the paychecks that people throughout the country receive with some of it going towards welfare programs to help those who are in need. Although sometimes private companies donate to welfare programs, the majority of the funding comes from the taxes that American workers pay.
Where Does the Money Go?
Once the tax money for welfare programs is collected, it goes into the individual state’s trust fund which is where it stays until it is distributed to those who are in need of unemployment money as well as other forms of financial assistance.
How it is Distributed
Each year the federal government distributes funds for state welfare programs as they see fit, using a wide variety of criteria to choose which places get a certain amount for this program. The fact is that the welfare program as a whole could not exist unless both state and federal governments did not participate on some level. Congress prepares an annual budget for all government spending, including that which goes to welfare programs.
Who Receives Welfare Assistance?
Those who are determined to be at a certain economic level can qualify for welfare assistance, though there are a number of umbrella programs for those with more specific economic needs such as child care or food assistance. There is an application process which must be followed in order to successfully qualify for these individual programs. The criteria which is used to give people welfare assistance varies from state to state, depending on the pre-defined “minimum level of means” which is accepted; those who fall under this level are usually eligible to receive help through the welfare program.
Can These Funds Ever Run Out? What happens if they do?
The total amount of money in the trust for each state fluctuates naturally due to unemployment rates. Those times when not as many people are collecting these benefits and there are more people paying unemployment taxes, a surplus is created in the trust for these states. On the opposite end of the spectrum, during times of extremely high unemployment, money in the trust can in fact run out. In the event that this happens, the government loans money to each of the states that are in need so they will be able to continue distributing these benefits to people who are in need of them.
Those who are eligible for certain welfare programs usually do not stay on them long-term; in fact fewer than 20 percent of those who receive assistance from these programs stay on them for a period of time longer than seven months. Around 20 more percent of people who get welfare end up staying on it for anywhere from one to two years total. About 27 percent of people stay on welfare for a period of up to five years. Another twenty percent of people stay on welfare programs for a period of time which exceeds five years.