The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Millions of Americans face the financial hardships of losing a job, not being able to work due to a disability or supporting a family on a small salary each year. The struggle to put food on the table, pay bills and support a family can be incredibly harsh, which is why the United States has a series of welfare programs to help those in need.
Federal welfare programs first started in 1935 during the great depression. With widespread poverty, starvation and unemployment, a series of programs were created to help Americans place food on the table and help those unable to support themselves and their families.
Today, the means-tested welfare system consists of government programs that offer cash, food, social services, education, training and housing for low-income Americans. As welfare programs are funded through local, state and federal taxes, programs are often a topic of political debate.
With some misconception surrounding the Americans receiving welfare and effectiveness of the program, we’ve compiled important welfare statistics you should know in 2021. Explore the costs, effects and various demographic statistics in our study of the welfare programs in America.
Cost of welfare programs
The total cost of poverty assistance programs in America can add up to a shocking $1 trillion a year when combining both federal and state level program budgets. Because of the large total price tag on helping the poor, welfare programs are often an area of policy and budgetary debate.
- In 2020, a total of $9.88 trillion was spent on welfare programs in America. [Source: US Government Spending]
- In 2021, $8.30 trillion is projected to be spent on welfare programs in America. [Source: US Government Spending]
- $4.83 trillion of that total is budgeted for Federal spending specifically in 2021. [Source: US Government Spending]
- $2.09 trillion of the total is estimated to be budgeted for state spending specifically in 2021. [Source: US Government Spending]
- $2.18 trillion of the total is estimated to be budgeted for local spending specifically in 2021. [Source: US Government Spending]
- 8 percent of total government spending in 2019—$361 billion—went towards welfare programs in 2019 (excluding Social Security benefits.) [Source: CBPP]
- The average SNAP recipient in 2020 earned $136.36 a month in assistance. [Source: USDA]
- Around 38,066,477 million people participated in SNAP in 2020. [Source: USDA]
- Total U.S. spending on SNAP in 2020 amounted to $36,335,896,388 billion. [Source: USDA]
2021 federal welfare budget
- In 2020 the poverty threshold for a couple with two children was $17,240. [Source: ASPE]
- Mississippi has the highest number of people living in poverty in 2020—20.6 of the state’s residents. [Source: World Population Review]
- In 2019, 10.5 percent of Americans lived in poverty. [Source: US Census Bureau]
- The poverty rate of Americans decreased by 1.3 percent in 2019. [Source: US Census Bureau]
- In 2020, 9.2 percent of Americans lived in poverty. [Source: Urban Institute]
Top 10 states with the highest poverty rates in 2021
|Puerto Rico||49.31 percent|
|New Mexico||19.57 percent|
|West Virginia||17.74 percent|
|Washington D.C||15.19 percent|
[Source: World Population Review]
Welfare program results
Following the Welfare Reform Act of 1996, government spending on welfare programs decreased as additional requirements and restrictions were put in place. Despite having less budget to pull from and more restrictions, the welfare programs in America have successfully lowered poverty rates over the past decade. Some issues with the current welfare program are its performance during years of economic downturn and recession.
- For every 100 families in poverty in 2019, only 23 were provided cash assistance by Temporary Assistance for Needy Families (TANF.) [Source: CBPP]
- The Supplemental Poverty Measure (SPM) in 2019 was 11.7 percent, 1 percentage lower than it was in 2018. [Source: US Census Bureau]
- Between 2018 and 2019, all major age categories saw a decline in SPM rates: children under age 18, adults aged 18 to 64 and adults aged 65 and older. [Source: US Census Bureau]
- Since its first publication in 2009, the SPM rate of 11.7 in 2019 is the lowest it’s ever been. [Source: US Census Bureau]
Social Security benefits lifted 26.5 million people out of poverty in 2019. [Source: US Census Bureau]
Average spending of welfare recipients
Compared to the average American household, welfare recipients spend far less money on all food consumption, including dining out, in a year. As families with welfare assistance spend half as much on average in one year than families without it do, there are some large differences in budgeting. Families receiving welfare assistance spent half the amount of families not receiving welfare assistance in 2018.
Welfare fraud statistics
Welfare fraud is the act of improperly stating or withholding information in order to receive higher payments. Most welfare programs’ eligibility is handled on a local level and detecting fraud is the responsibility of the state. The United States Government Accountability Office estimates that around 1 out of 10 welfare payments are fraudulent or improperly filed.
- Fraudulent and improper welfare payments were around 10.6 percent of total federal welfare payments made in 2019. [Source: Federal Safety Net]
- A total of $99.1 billion in payments were found to be improperly filed or fraudulent in 2019. [Source: Federal Safety Net]
- An estimated 6.8 percent of SNAP payments were made fraudulently or in error in 2019. [Source: Federal Safety Net]
- An estimated 10.5 percent of Child Nutrition payments were made improperly in 2019. [Source: Federal Safety Net]
- The $99.1 billion of improperly filed or fraudulent payments in 2019 amounts to more than the budgets of TANF, Child Nutrition, Head Start, Job Training, WIC, Child Care, Low Income Home Energy Assistance Program and the Lifeline programs combined. [Source: Federal Safety Net]
- For SNAP households receiving SNAP benefits in 2019, around 41.2 percent had at least one member over the age of 60, and 29.9 percent had a child aged 18 or younger. [Source: United States Census Bureau]
- 47.5 percent of households receiving SNAP benefits in 2019 included a married couple. [Source: United States Census Bureau]
68,826,573 people were enrolled in Medicaid in 2020. [Source: Medicaid]
- 11.3 percent of all American households received SNAP benefits in 2018. [Source: United States Census Bureau]
- Households receiving SNAP benefits received an average of $251 per month in 2018. [Source: United States Census Bureau]
- The states with the highest rates of SNAP participation in 2018 included New Mexico at 17.3 percent and West Virginia at 16.6 percent. [Source: United States Census Bureau]
- Wyoming had the lowest SNAP participation rate in 2018 at 5 percent. [Source: United States Census Bureau]
- 56 percent of all people living in poverty in 2018 were women. [Source: United States Census Bureau for American Progress]
- More women lived in poverty in the United States than men in 2018, totaling 21.4 million. [Source: United States Census Bureau for American Progress]
- In 2019, 29.9 percent of households receiving SNAP benefits had at least one child aged 18 or younger. [Source: United States Census Bureau]
- In 2019, 12.3 percent of households receiving SNAP benefits were headed by a female without a spouse. [Source: United States Census Bureau]
- Nonfamily households—those whose members aren’t related—accounted for 35.2 percent of SNAP recipients in 2019. [Source: United States Census Bureau]
- 25.6 percent of SNAP households included a disabled person in 2019. [Source: United States Census Bureau]
- The number of SNAP households who were headed by a white person was 75.8 percent in 2019, compared to 12.5 headed by a black person and 13.6 headed by a Hispanic person. [Source: United States Census Bureau]
Welfare in the workforce
Although welfare programs are commonly argued to support the lazy, data does not show this to be true. In the current state, welfare programs predominantly help Americans who receive low wages. The U.S. Government Accountability Office discovered that the top employers of Americans enrolled in welfare programs were Walmart and McDonalds—companies who have historically paid their workers low wages.
- 53 percent of SNAP households included two or more employed members in 2019. [Source: United States Census Bureau]
- 31.8 percent of SNAP households included one employed member in 2019. [Source: United States Census Bureau]
- 48 percent of adults enrolled in Medicaid work at least a week. [Source: Government Accountability Office]
- 51 percent of adults enrolled in SNAP work at least 35 hours a week. [Source: Government Accountability Office]
- Among employed adults enrolled in Medicaid and SNAP in 2018, 72 percent worked in the five industries who carry the highest concentrations of low-wage workers. [Source: Government Accountability Office]
- More employed adults enrolled in Medicaid work for companies within the private sector than the public sector. [Source: Government Accountability Office]
Although the $1 trillion a year budget may seem large at first glance, the current welfare program supporting the 9.2 percent of Americans in poverty for 2020 puts the large problem of poverty into perspective. Without any government safety nets, those living in poverty would not have the proper help to survive or tools to get back on their feet. With a rise in credit card debt across America it is still important to find a solution to pull the citizens living paycheck to paycheck out of poverty.
If your credit has been damaged and you’re looking to improve your situation, contact Lexington Law. We can work with you to remove the negative items on your credit report that could be holding you back.You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.