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What are entitlement programs in the United States?

There are a wide range of contributory and non-contributory financial initiatives overseen by the federal government which comprise the social safety net.

There are a wide range of contributory and non-contributory financial initiatives overseen by the federal government which comprise the social safety net.

The federal government oversees a wide range of entitlement programs, providing financial support to citizens. The entitlement programs are so named because they are essentially rights granted to all citizens and certain non-citizens by federal law.

They can be divided into contributory or non-contributory programs, which refers to whether or not recipients have to have made financial contributions to the program in order to later receive the benefits.

The scale of these federal programs is absolutely vast and they comprise the social safety net for people all across the United States. Forbes reports that the ‘big three’ of Social Security, Medicare and Medicaid account for around 48% of all federal spending. For context, military spending account for around 15% of the annual budget.

What are contributory entitlement programs?

Contributory programs are typically paid into by workers throughout their lives with monthly or annual contributions taken from their payslips. Americans who receive the support must have participated in the programs through payroll taxes.

The most widely-claimed of the contributory entitlement programs are Social Security, Medicare and Unemployment Insurance. Social Security and Medicare are typically designed to offer support for older or retired workers, ensuring that they have are able to cover the cost of essentials later in life.

Unemployment Insurance provides monthly payments for out-of-work Americans, but to qualify for the money the claimant must have contributed a sufficient amount during their time in the workforce.

What are non-contributory programs?

Non-contributory programs are often referred to as ‘welfare’ and they are designed to provide support for low-income Americans regardless of their work history. They offer a social safety net for vulnerable people and are designed to keep people out of poverty, offering a basic level of financial or medical support.

While they are still considered a legal right for all Americans, there are eligibility thresholds to ensure that only those in need of the support receive it.

These programs include refundable tax credits (like the Earned Income Tax Credit), the Supplemental Nutritional Assistance Program (SNAP), Housing Assistance, Supplemental Security Income and Pell Grants to support students financially.

There are also a range of non-contributory entitlement programs that focus specifically on supporting children in low-income households. These include the Temporary Assistance for Needy Families (TANF), Child Nutrition, Head Start, childcare support and Women, Infants and Children, a program supplying supplemental food for pregnant women and children less than five years of age.