Social Welfare Policy

Think of the last time you talked to your friend or family member about the latest changes in the healthcare industry or about what your local government plans to do about the rising cost of rent in your city. You likely discussed possible solutions to these topics, some of them being government policies, or more specifically, social welfare policies. But what exactly is a social welfare policy? What does it entail, and who benefits from it? Well... If you want to find out, you are in the right place.

Social Welfare Policy Definition

Whenever topics such as health care or unaffordable housing arise, social welfare policies typically follow. We see aspects of the economy that need improvement, and one of the ways through which we can improve upon such aspects includes social welfare policies.

A social welfare policy is usually funded partially or entirely by the government. An example of a social welfare policy that the government partially funds is the United States' Social Security program. Social Security is a pay-as-you-go program where the payments by the current workforce are collected by retirees as a pension. Other social welfare policies rely entirely on government funding to provide services. In 2020, 4.67% of the United State's GDP was spent on federal welfare programs, which equates to approximately $977 billion dollars.¹

The main goal of social welfare policies is to provide a safety net to those who need support due to situations such as poverty, unemployment, poor health, disability, or other circumstances that we as a society have deemed as requiring outside assistance. These programs are there to make sure that every citizen can maintain the minimum standard of living and dignity that society feels they should have and that their essential needs are met.

Types of Social Welfare Policies

There are several types of social welfare policies to cover the different needs of individuals and families across the country. Food, housing, child care, and medical care are some of the areas that are covered by social welfare policies.

Housing Social Policies

Housing social policies help people avoid homelessness or other kinds of housing insecurity. They may come with extra benefits like job training and employment opportunities.

In 2020, the U.S. Treasury spearheaded the Emergency Rental Assistance Program (ERAP) to keep families in their homes as they recover from the economic impacts of the COVID-19 pandemic.² The lockdowns forced businesses to close, so many people lost their jobs, and housing insecurity became a problem.

As more people fell deep into rental debt and faced eviction, the ERAP made funding available to assist households in meeting their rental and utility obligations. The federal government suspended eviction in cities where renters could not pay their landlords. However, it became unclear as to who would have the responsibility to pay. The federal government then worked with states and local authorities to offer assistance to landlords and utility providers.

Fig 1. - Family in a home

Health Care

Health care social policies help individuals access health care at minimal or no cost. Such programs are designed to improve social well-being and support a productive workforce. One type of initiative would be the Children Health Insurance Program (CHIP), which is intended to provide medical assistance to children from poor families.

Since healthcare is a mainly private industry in the United States and most people rely on their jobs for health insurance, and private insurance can come with a high monthly cost, many families who are experiencing unemployment rely on government health care for meeting medical needs.

To ensure a healthy and productive society, a program like Medicaid makes it easy for people to qualify based on income and family size. Beneficiaries generally don't pay a deductible when in need of medical care. Through this program, the government covers the cost of care.

Unemployment Assistance

Unemployment Assistance provides financial aid to unemployed individuals so they can survive through hard times and find job placement. When it comes to addressing income inequalities and unemployment among the low-income seniors and people with disabilities, publications from the Supplemental Security Income program indicate that payments as of 2020 were $783 per month ($1,175 for couples) and offsets to help people meet basic needs like food, clothing, and shelter.³ The U.S. Treasury pays for these benefits.

Examples of Social Welfare Policy

Some examples of specific social welfare policies are the Housing Choice Voucher Program, Medicaid and Medicare, nutrition assistance, and Social Security.

Housing Choice Voucher Program

The Housing Choice Voucher Program, also referred to as Section 8, assists families who qualify in paying their rent. The family is allowed to choose their own house as long as the home meets the requirements set by the government and the landlord accepts section 8. The way it works is the recipient pays the amount that is deemed appropriate for their income level, and the government covers the rest. This way, low-income people can afford housing, and the landlords can still collect the market rate of rent.

Medicaid and Medicare

Medicaid is an example of a state-funded healthcare program for low-income families and children based on income. The maximum income applicants and recipients are permitted is up to each state government's discretion. Not every medical provider must accept this form of insurance either.

Medicare is an example of a federally funded healthcare program that provides health insurance to those 65 years and older. Some exceptions are made in special circumstances for people who are below the age requirement, as is the case with some disabilities.

Nutrition Assistance

Many low-income people are on food stamps, also known as the Supplemental Nutrition Assistance Program (SNAP). This social transfer benefits low-income families that use these food stamps to buy food. Your monthly gross income has to be below 130% of the federal poverty line to qualify for these social benefits. The government calculates how much eligible families would spend on food in their respective locale and sends an amount minus 30% of their monthly income.

Social Security

Public Goods

A public good is a service or a commodity that is provided for the benefit of society at no cost and is accessible to everyone. A public good can be provided by either private parties or the government. Social welfare policies are also for the benefit of the citizens, so policies that cover public goods like infrastructure and public education are important for maintaining equity and equality in a society.

Infrastructure

Infrastructure policies deliver a mechanism to support a healthy lifestyle, security, public transportation, recreation facilities, healthcare amenities, and schools.

When city planners prepare infrastructure projects such as city parks, bicycle lanes, sidewalks, and trails, they extend health and social benefits. City planners have to be concerned about the health of their community because job creators are going to wonder what the cost of health care will be or how high the rate of absenteeism will rise.

City planning authorities have publications showing that the more open spaces and city park spaces a city has, the healthier the community will be.⁴ This outcome is achievable when city dwellers have free access to open spaces and free access to recreation. Unlimited access provides many benefits, from exercising to jogging, cycling, yoga, etc. Increased walkability is the number one prescription that the Center for Disease Control recommends for cities to combat the epidemic of obesity.

National expenditure statistical data indicates that in 2020, U.S. healthcare spending was approximately $4.1 trillion or $12,530 per capita.⁵ Scientific publications have shown that a walk through nature or a public park has a measurable positive effect on our anxiety and stress. People exercise and enjoy massive health benefits that cities extend to dwellers.

Most cities that are built around cars tend to have substantial obesity problems and social costs as the healthcare system gets overburdened by their healthcare needs. Conversely, local social benefit programs that invest in city parks and trails have statistical data indicating that for every $1 they spend on parks and tracks, the city saves $3 in healthcare expenses.⁶

Public Education

Public education institutions like public schools, community colleges, and state universities are examples of government-funded infrastructure that benefit society. Public schools provide an education for children from kindergarten to 12th grade with a curated curriculum meant to provide them with the basic knowledge that they need. Community colleges and state universities in the United States do require students to pay tuition but at a reduced rate compared to private universities. This is possible because state schools receive funding from the state government.

Tuition assistance in the form of Free Application for Federal Student Aid (FAFSA), commonly referred to as financial aid, is a federal program that will help pay for college tuition based on factors such as parental income, assets, personal income, and academic standards.

Benefits of Social Welfare Policy

Social welfare policy has both benefits and issues associated with it. Since every citizen's situation is unique, it can be difficult to come up with policies that include and are able to meet everyone's needs. There are also two different ways for nations to approach social welfare policies. They can choose to go with a residual approach, such as in the United States, or an institutional approach, which is more often seen in European countries.

Benefits of Social Welfare Policy

The types of benefits that social programs provide include the following:

• Food
• Health care
• Housing
• Child care

In addition to what social welfare programs provide, we also can ask how these policies benefit a society. One reason is to protect citizens who are temporarily or permanently unable to contribute to society. This may include those who are poor, homeless, unemployed, injured, or disabled. Another way that social welfare policies benefit society is by helping reduce inequality in society. If a country can ease its citizen's worry about daily survival and provide them with services, then people are able to stay in school longer, afford more nutritious food, and access healthcare.

Social Welfare Policy Issues

Some issues associated with social welfare policies arise from qualifications for recipients being inconsistent and discriminatory across different programs. There is not a standard level of income required to receive aid. Each program can determine its own income brackets for deciding how much assistance is provided to each applicant.

Social welfare programs also have to contend with other requirements for receiving aid. How many children a family has, single parents, marriage status, age, preexisting health conditions, ability to work, and the assets that one has may all play a role in how much aid someone receives. For example, if someone inherited a home but is disabled, cannot otherwise work, and has limited income, they may not qualify for assistance unless they sell the home. However, then they must find somewhere else to live and pay rent, setting them deeper into poverty.

A Residual Approach to Social Welfare Policy

The residual approach to social welfare policy is the method by which public intervention only comes in when resources from individuals, local communities, and the marketplace are exhausted. Think of it as a safety net for society. A residual approach is different from an institutional approach, where social benefits are continually provided universally without restrictions surrounding the level of income recipients are allowed to have.

Programs that are developed under a residual approach tend to be restricted to the poor and are taken away once the recipient qualifies for support somewhere else or increases their income enough. Some programs may limit the time that benefits can be collected regardless of the level of income or availability of other assistance.