We are a population of diversity and the financial divide between our social classes are now as gaping as ever. The US government takes into consideration this gap in finances and provides the appropriate support to helpour population survive against all odds. One such support system is the social welfare system.
A social welfare system provides assistance to individuals and families in need. The types and amount of welfare available to individuals and families vary depending on the state, or region. In the U.S., the federal government provides grants to each state through the Temporary Assistance for Needy Families (TANF) program. This multibillion dollar social welfare system is of enormous size and complexity. Millions of Americans receive benefits under such social welfare programs as Social Security, Aid to Families with Dependent Children (AFDC), and food stamps.
How does a Social Welfare System Work
Social welfare systems provide assistance to individuals and families through programs such as health care, food stamps, unemployment compensation, housing assistance, and child care assistance. In the U.S., a caseworker is assigned to each individual or family applying for benefits to determine and confirm the applicant’s needs.
Within each state, social welfare systems may go by different names, but they often serve similar functions. This can cause confusion when attempting to compare one state’s program to another. Additionally, the requirements to qualify also vary, depending on the poverty line in a particular state. This allows for adjustments based on items such as cost of living that are not standardized across the country.
Eligibility for Social Welfare Schemes
The benefits available to an individual vary by state. Eligibility is determined based on factors like-
1.The person’s financial status and how it relates to the minimum acceptable levels within a particular state.
2.The size of the family unit,
3.Current income levels, or
4.An assessed disability.
Is Social Welfare Tax Exempt?
By long-standing IRS policy, social welfare payments or public assistance payments are excluded from gross income. According to the pertinent IRS publication, a taxpayer should not include as taxable income “benefit payments from a public welfare fund, such as payments due to blindness.” Thus, the value of AFDC, SSI, food stamps, Medicaid, and housing assistance benefits are not subject to income taxation.
The IRS and the federal government work together to provide financial assistance to the financially backward classes to rise up from their difficulties. The tax exemption provided is yet another benefit of the various social welfare schemes provided. Informing the public about the same is hence necessary to ensure that the eligible candidates do receive the benefits that the government provides for them.
