Public Assistance Programs: Origins, Development, Types & Examples

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  • 0:02 Public Assistance Defined
  • 0:51 Historical Background
  • 1:33 Cash vs. In-Kind Assistance
  • 2:03 Federal Cash…
  • 4:44 Federal In-Kind…
  • 6:22 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Poverty is still a serious problem in the United States and would be even more so but for various federal and state public assistance programs. In this lesson, you'll learn about what a public assistance program is and types of programs.

Public Assistance Defined

Public assistance programs, commonly called welfare, are government programs that seek to provide aid to certain classes of individuals who are poor. Not everyone is eligible for public assistance, even if they meet the poverty requirement. This is because the traditional philosophical view of American public assistance is that it should be provided only to the deserving: those people who are not responsible for their own poverty, such as children, the aged, and disabled. Fit, working-aged adults without children tend to be out of luck and deemed undeserving of most public assistance.

Historical Background

Before the 20th century, public assistance was pretty much left in the hands of local government and private charitable organizations. However, the Industrial Revolution and urbanization of the United States outpaced the ability of these local efforts. State governments started public assistance programs, but their efforts collapsed under the weight of the Great Depression. The federal government stepped in at this point. The current federal public assistance programs can be traced back to the Great Depression of the 1930s and the Social Security Act of 1935.

Cash v. In-Kind Assistance

You can break public assistance down into two categories: cash and in-kind assistance. Cash assistance is the transfer of money from a government-funded program to an individual, such as a welfare check. In-kind assistance, on the other hand, is the transfer of a benefit to a recipient not involving cash. Food Stamps and health care are examples of in-kind benefits.

Federal Cash Assistance Programs

The three primary cash assistance programs provided by the federal government are:

  • Temporary Assistance for Needy Families (TANF)
  • Supplemental Security Income (SSI)
  • The Earned Income Credit (EIC)

Let's take a closer look.

Mary is a single mother of three children. She is currently out of work and receives a monthly TANF payment. TANF is administered by each state with money provided by the federal government. TANF is not an entitlement, like social security or Medicare.

Even though Mary is qualified to receive the benefit, there is no guarantee that she will if the money for the program runs out. Moreover, Mary may not receive welfare payments from federal funds if she is not working within two years of receiving benefits. In fact, Mary has a lifetime limit of five years' worth of federally funded TANF assistance. There are some narrow exceptions to these rules in special cases.

Doug is disabled and has never been able to work. He receives supplemental security income payments. Unlike social security disability benefits, you don't have to have previously worked to qualify. Instead, an individual generally must either be 65 or older, blind, or disabled. Of course, you must have limited income and financial assets as well.

Jack and Diane both work at a big box retailer where they make a little bit above minimum wage. They have a young child. Jack and Diane receive an Earned Income Credit, which is a tax credit from the federal government. Basically, the federal government gives them a refundable tax credit for each dollar they earn in income up to a certain maximum amount, which is paid to them as an income tax refund. The credit is phased out for people who earn above a certain income threshold. In 2013, the maximum credit was $6,044 for a family with three or more children.

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