Entitlement Programs of the federal government include Medicaid, Medicare, Social Security, Unemployment Insurance, and welfare programs. Entitlement programs are rights granted to citizens and certain non-citizens by federal law. The programs are either contributory or non-contributory. Non-contributory means the program benefits are available to participants regardless of whether they have contributed to the program.
Welfare programs such as SNAP (food stamps) or Pell Grants are examples of non-contributory programs. Participants receive benefits even though they have never made contributions to the program. The Social Security Retirement Program is an example of a contributory program. The program gets payroll taxes during a person’s working years and pays benefits in retirement.
Welfare Programs Are Means-Tested
The federal government’s welfare system comprises 13 separate programs to fight poverty. They are all entitlement programs. Welfare programs also include the Medicaid Program, which provides health care to low-income Americans. While the programs represent a legal right available to all Americans, exercising that right depends on the individual’s or family’s income level. Only low-income Americans qualify for benefits, and the determination of this is called “means-testing.” Qualification for most welfare programs is at or below the Poverty Threshold. For some programs, it is at a multiple of the Threshold, such as 130%. Here is a comparison of qualification standards for each welfare program.
Contributory Programs
Entitlement programs also include Social Security, Medicare, and Unemployment Insurance. Social Security provides retirement and disability benefits. Medicare provides health care for elderly Americans. Unemployment Insurance provides benefits to working-age adults out of work. All Americans must participate in the programs through payroll taxes defined by federal law. These programs are contributory programs, whereas welfare is non-contributory. All are entitlement programs.
One-Time Entitlement Programs
The Coronavirus pandemic led to legislation at the federal level that created stand-alone, one-time entitlement programs available to businesses or the general population. For example, the Coronavirus 2020 legislation included $1,200 stimulus payments to individuals with income below $75,000 or couples below $150,000. The legislation also included Paycheck Protection Payments (PPP loans) to businesses and increased unemployment compensation to individuals. Welfare programs were also expanded for limited time frames in the Coronavirus legislation in 2020 and 2021. See the Coronavirus Relief Bill for information on the 2021 legislation.
More Information on Entitlement Programs
Efficient Way to Review Federal Programs
Federal programs are vast, and getting your arms around them isn’t easy. One way to see everything in one place is to examine the federal budget broken down by “line items,” which describe their function. An excellent place to do that is USgovernmentSpending.com. You can drill down each line item by clicking on the plus sign.