Means-Tested Benefits List

Means-tested Benefits may include your current income, property holdings, or savings accounts and investments. In some cases, it may also include the assets of your partner or spouse. Typically, the amount you receive will depend on your age and other factors. One of the biggest debates among policy wonks is whether government programs should be universal or means-tested. There are pros and cons to both approaches. The main advantage of universal programs is that they have greater buy-in from society. They are less likely to be attacked by political partisans or targeted for elimination on the basis of who is in power. Universal programs also tend to be cheaper and easier to administer than means-tested benefits.

On the other hand, means-tested programs can create perverse incentives that depress work and savings. For example, the Heritage plan to convert Medicare into a premium-support system would impose a significant implicit tax on those earning close to the threshold at which their benefit phases out. Economists have found that people respond much more strongly to federal income tax changes when they are close to retirement than they do in earlier years of their working lives.

Some people argue that means-testing is more equitable, as it channels more resources to those who need them most and eliminates the problem of freeloaders who take advantage of the system. However, there are many alternatives to means-testing that could achieve the same goal of reducing poverty without the drawbacks of a significant implicit tax rate. For example, Social Security benefits already vary based on lifetime earnings.

What is Considered a Means-Tested benefit?

Means-tested benefits are programs that limit eligibility to individuals and families whose incomes or assets fall below a certain threshold. These programs include Medicaid, SNAP (formerly food stamps), housing subsidies, and Temporary Assistance for Needy Families. They are usually financed by taxpayer dollars and can be contrasted with universal or unconditional benefits like Medicare, Social Security retirement income, and public school tuition subsidies. People on the right have opposed means-testing because they believe it would send the wrong message to workers and savers by penalizing them for adding extra income to their Social Security or personal retirement accounts. They argue that reducing a person’s government benefits as their outside income increases would be equivalent to an implicit tax, depressing economic activity and discouraging good behavior.

Many conservatives are also concerned about the administration and enforcement of means-testing. They point out that it would require the IRS to know the scope of a person’s wealth, entailing a more intrusive federal bureaucracy than most Americans might prefer. There is also the risk that some people will falsely report their assets to avoid means tests. Despite their many drawbacks, some advocates of means-testing argue that it is the best option for dealing with Social Security’s impending insolvency. They contend that a means test would be less costly than other alternatives, such as increasing payroll taxes or converting the program to individual account-based benefits, and that it would help reduce future deficits by targeting “free loaders.” However, others are skeptical of the claim that means-testing is the best way to solve the problem of rising Social Security costs.

Common Means-Tested Benefits

1. Temporary Assistance for Needy Families (TANF): Provides cash assistance to low-income families with dependent children.
2. Supplemental Nutrition Assistance Program (SNAP): Formerly known as food stamps, SNAP provides eligible individuals and families with funds to purchase food.
3. Medicaid: Offers healthcare coverage to low-income individuals and families, including children, pregnant women, elderly adults, and people with disabilities.
4. Children’s Health Insurance Program (CHIP): Provides health insurance for children in low-income families who do not qualify for Medicaid.
5. Housing Assistance: This includes various programs such as Section 8 Housing Choice Vouchers, public housing, and rental assistance programs, which help low-income individuals and families access affordable housing.
6. Low-Income Home Energy Assistance Program (LIHEAP): Assists low-income households in paying their heating and cooling bills.
7. Earned Income Tax Credit (EITC): A tax credit for low- to moderate-income individuals and families, which can provide a refundable credit to help offset the burden of payroll and income taxes.
8. Child Tax Credit: A tax credit for families with children that provides financial assistance to help offset the cost of raising children.
9. Supplemental Security Income (SSI): Provides income assistance to elderly and disabled individuals with limited income and resources.
10. Women, Infants, and Children (WIC) Program: Offers nutrition assistance, education, and support to low-income pregnant women, new mothers, and young children.
11. School Lunch and Breakfast Programs: Provide free or reduced-price meals to eligible children attending school.
12. Jobseeker’s Allowance (JSA): Offers financial support to unemployed individuals actively seeking employment.
13. Unemployment Benefits: Provides temporary financial assistance to individuals who have lost their jobs and meet specific eligibility requirements.
14. Subsidized or Free School Supplies and Clothing Programs: Helps low-income families with the costs of school supplies, uniforms, and other necessary items for their children.
15. Legal Aid: Offers free or reduced-cost legal services to individuals who cannot afford private legal representation.