There's no singular "welfare" system in the U.S. The term is a catchall for various state and federal benefits intended to help those without sufficient means to provide for themselves. Unlike Social Security or Medicare, these programs aren't funded by taxpayers' dollars, so there's no automatic right to collect because you've contributed over the years.
Recipients must qualify for benefits, and the rules are numerous, including income limits.
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Gross vs. Net Income
You can't simply look at your paycheck and say, "Yes, I qualify," or, "No, I don't." Governments make a distinction between gross and net income for qualifying people who need help.
Your paycheck and any other earnings that come into your home are your gross income. Your net income is what's left after you take certain allowable deductions, such as childcare costs, housing costs, medical expenses, work-related expenses and child support you might pay for children who don't live with you. Most applicants also qualify for a "standard" deduction representative of living expenses that you can't avoid spending money on.
The Federal Poverty Guidelines
Your income – gross, net or both – is then measured against the federal poverty guidelines. The Department of Health and Human Services issues these guidelines annually. In simplest terms, the equation begins with the previous year's poverty guidelines and adjustments are made from there to reflect price changes in the last 12 months.
There's not just one number. It depends on your family size and where you live. One guideline applies to most of the country, but Alaska and Hawaii have their own. The guideline for a family of three is $21,720 in 2020, but it drops to $21,150 in Alaska, and it increases to $24,980 in Hawaii.
Depending on the program you're hoping to qualify for, your gross or net income must fall between 125 percent and 185 percent of the guideline number for your family size. Cash assistance programs don't typically use the guidelines, however. They have other measurements.
TANF: Temporary Assistance for Needy Families
The Welfare Reform Act created TANF back in 1996. The program provides cash assistance and other types of support. TANF doesn't use the federal poverty guidelines. Individual states determine their own TANF eligibility rules, so income limits can vary.
For example, the gross income limit for a family of three in Indiana is $592 a month, and the net income limit drops to $288. But the gross income limit for a family of the same size is $1,023 a month in Maine, and this increases to $1,116 if your housing costs take up 50 percent or more of your income. Reach out to your state for the exact figures where you live, but they should be somewhere in this range.
In addition to income, other qualifying rules apply. You must have or be legally responsible for at least one child who's under 19 years old, although the exact age can vary by state. You must generally be out of work, on the verge of losing your job or working for very low wages. You must be a U.S. citizen, permanent resident, legal alien or national.
SNAP: Supplemental Nutrition Assistance Program
SNAP provides food vouchers to needy families with children, and its qualifying rules are set at the federal level. Both your gross and net incomes must fall below certain limits to qualify unless one of your family members is elderly or disabled. Other exceptions can apply if you're already receiving TANF or Supplemental Security Income.
Your gross monthly income must be $2,311 or less for a family of three through September 2020. This works out to 130 percent of the 2020 federal poverty guidelines. Your net monthly income must be less than $1,778, or 100 percent of the guidelines. USA.gov provides a complete breakdown of the limits for families of all sizes on its website. Income includes child support you might receive, unemployment benefits or cash assistance from TANF. Again, the limits are different in Alaska and Hawaii.
Assets you own can count against you as well, although these don't include items like your home or personal property – things you can't easily sell to pay for food. Your bank account will be taken into consideration, however. The asset limit is $2,250 unless at least one of your family members is elderly or disabled, in which case the limit rises to $3,500.
Special Assistance in the COVID-19 Pandemic
These rules might seem confusing, but many states are relaxing them somewhat during the coronavirus pandemic. The Families First Coronavirus Response Act increases SNAP benefits, suspends certification and reporting requirements and eases up on the rules for applying. A new USDA program allows recipients to purchase food online for the first time.
All 50 states have adopted these provisions in some measure. For example, California has pledged not to cut anyone from that state's SNAP program, and it's even providing extra benefits. Reach out to your own state's program for the status there.
- Federal Safety Net: Definition of Welfare
- USA.gov: SNAP Eligibility
- Center on Budget and Policy Priorities: A Quick Guide to SNAP Eligibility and Benefits
- Benefits.gov: Temporary Assistance for Needy Families
- State of Indiana: Temporary Assistance for Needy Families
- Western Center on Law and Poverty: Up-to-Date COVID-19 Information
- U.S. Department of Health and Human Services: U.S. Federal Poverty Guidelines Used to Determine Financial Eligibility for Certain Federal Programs
- Pine Tree Legal Assistance: Am I Eligible for TANF?
- Center on Budget and Policy Priorities: Most States Are Using New Flexibility in SNAP to Respond to COVID-19 Challenges