US & Canada

How US welfare compares around the globe

Meals are served at the Broad Street Ministry, (BSM) which serves thousands of free meals five days per week while also providing the homeless with a mail centre, a clothes mending facility, counselling and medical screenings for the homeless and those that are in financial distress on July 27, 2016 in Philadelphia, Image copyright Getty Images
Image caption A free meal provided for the homeless in Philadelphia by the Broad Street Ministry

Twenty years ago, the US overhauled "welfare" - meaning direct cash assistance to poor families. But how does this aid compare to income support programmes in other high-income countries?

Now known as Temporary Assistance for Needy Families (TANF), it became more flexible when President Bill Clinton signed a 1996 Republican-led bill overhauling the system.

In the US, "welfare" does not refer to the entire social welfare system, but to this particular programme, which is a cash assistance for single parents on low incomes.

So are you better off being a poor, lone parent in the US or in the UK, Canada or France?


The US

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Before 1996, states had discretion about how much money they would offer, but who was eligible and other general policies were set by the federal government.

"Most of the money went directly to cash benefit for families," says Liz Schott, senior fellow at the Center on Budget and Policy Priorities. "Now states can spend in all kinds of ways," including job programmes and childcare, but also transfers to other state programmes, like foster care payments and child protection services.

States now get the same amount of money they did in 1996.

In 2015, an average of 25% of the funds went to cash assistance, although this - like many other elements of a programme whose policies are set on a state-by-state basis - varies widely.

But there are now also stricter requirements about what percent of aid recipients needed to be involved in some sort of work activity. Failure to hit those targets means states are penalised, so some avoid them by limiting how many people are eligible for welfare in the first place.

The result is a "tremendous differentiation of the safety net" in the US, Schott says.

The amount an average TANF family - a single parent with two children - receives is also set by each state. In Mississippi, they would receive $153 a month (£115). In Alaska, the average benefit was $642 a month.

The US has other social benefit schemes, including food stamps, disability payments and Medicaid - healthcare for the poor.

But in the twenty years since TANF was made law, enrolments in food stamps has been expanded significantly as direct welfare payments have dropped.

So what does the current US welfare system look like in comparison to countries with similar economies?


Canada

Image caption Canada's income support programme varies by province and increases if the person is disabled or has more than one child

America's northern neighbour's basic cash assistance programme looks the most like the US in comparison to other developed economies - but the details are very different.

Around the same time as TANF, was passed, Canada was dealing with a budget deficit. In response, the Canadian federal government reduced the amount given to provinces for basic aid, but gave most of the responsibility for administering the programme to each province.

Provinces also ask those receiving the benefit look for work if they are able to, and the benefit is available to people without children.

Unlike the US, almost all the federal requirements were dropped and there was no lifetime limit on receiving the benefit.

"It was a quid pro quo," Dr Daniel Beland, a professor of public policy at the University of Saskatchewan. "Here is less money but in return we will give you more autonomy at the provincial level."

The amount provinces provide do vary, but they are generally more generous than the US, while still remaining under Canada's low-income cut-off level. A single person with one child in Ontario would receive a benefit of just less than $1,000 Canadian dollars a month says Beland.

If someone is disabled or unable to work, their payment is higher.

Both the US and Canada have seen enrolment numbers drop in these programmes, and in the US, experts point to the new restrictions as a key reason.

In both North American countries, Beland says "reducing welfare rolls became a goal in and of itself, rather than focusing on ending poverty".

"But in the US it's worse."


France

The French welfare system is far broader than cash assistance to poor residents. The country is known for its wide-ranging social protection schemes.

The closest equivalent to TANF in is the Revenu de solidarité active (RFA). It is available for those who are at least 25 years old or at least 18 if they are single parents or can prove they worked a certain length of time previously.

Unlike the US, RFA does not require a person to be taking care of children to receive the assistance - but those with children receive a higher benefit.

Image caption "Welfare" in the US is actually categorised as a family benefit by the OECD, as it is only available to those taking care of children. Food stamps are categorised as social assistance.

A single parent with two children would be eligible for as much as €1,068.61 (£904) each month, but that benefit would be lessened by any actual income or other cash benefits the person was claiming.

A major difference between the US and Canada, France, the UK and Japan, is that the other countries offer additional benefits in support of children, some regardless of income.

The US has a child tax credit, but it primarily reduces tax liability at the end of the year.

"They all have systems of child benefit, whether they are universal or income-related" says Dr Jonathan Bradshaw, an emeritus professor of social policy and social work at the University of York.

The changes to the US welfare system make it "less of safety net really," Bradshaw says.

"In the absence of child benefit, there's much more insecurity there than in other countries."


United Kingdom

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The UK currently offers a programme called Income Support for people between the ages of 16 and when they are eligible for pension credit. This does not include the various other benefits low-income for which UK residents may be eligible.

The person must have no income or low income, work less than 16 hours a week, and have savings of under £16,000.

A single parent with two children could expect £292 a month.

Income support is one of six benefits in the UK, including jobseeker's allowance and child tax credits, that have begun to be replaced by universal credit.


Japan

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In the mid-to-late 1990s, Japan had very few residents applying for social assistance, but now just over 2% of Japanese use the aid.

Today, many of those receiving public assistance funds are older people with few job prospects.

While all age groups have seen an increase in those receiving aid, those older than 60 have seen the sharpest rise.

The benefit is highly personalised - it is calculated based on gap between minimum living costs (includes costs like housing, education, medical) and existing income.

But social assistance is also limited by how much immediate family can help - as the civil code of the country requires certain relatives to try and help support those who cannot provide for themselves.


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