In the United States, welfare benefits for individuals and families with no or low income had been almost non-existent prior to the Great Depression
of the 1930s. With millions of people unemployed, the federal government saw income security as a national problem. In addition to establishing two major "social insurance" programs to respond to future income loss (Social Security
and Unemployment compensation
), the Social Security Act
of 1935 launched federal grants to support state welfare programs for low-income elderly and families with children. The former evolved into Supplemental Security Income (SSI), a federally administered program for the elderly, blind, and disabled. The latter became Aid to Families with Dependent Children (AFDC). Both were supplemented by two important "in kind" benefit programs also funded by the federal government -- Medicaid and Food Stamps
. Needy individuals not meeting the eligibility criteria for these forms of federally assisted or supported welfare may qualify for purely state or state and local relief, often called general assistance.
In 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act (Welfare Reform
Act). The new law eliminated AFDC, placed permanent ceilings on the amount of federal funding for welfare, and gave each state a block grant of money to help run its welfare program. For example, under the 1996 law, federal funds
may only be used to provide a total of five years of aid in a lifetime of a family. Another significant change was the complete exclusion of legal aliens from receiving any SSI benefits. The passage of the Contract with America Advancement Act of 1996 further narrowed the number of people allowed to receive SSI disability benefits by requiring that drug addiction or alcoholism not be a material factor in their disability.
The law governing entitlement and benefit to any one of these welfare programs is complex. For individuals or families involved with more than one of them, the situation is even more so. Federal law applies to federal benefits like SSI and, in some respects, to federally funded benefits administered by the states, as AFDC used to be and Medicaid remains. Both federal and state programs must comply with Constitutional standards in setting eligibility rules and procedures for applying them.