What Does a Means Tested Program Mean?

A means-tested program is part of the welfare system and helps individuals in financial need in the United States. Those who meet certain low-income eligibility requirements receive cash or other aid from these programs.

Function

Six departments in the U.S. control over 70 means-tested welfare programs. They assist individuals with nonwelfare income below a certain level with additional funds such as food stamps, public housing and Medicaid.

Significance

Population growth affects the number of people participating in means-tested programs. The value of a means-tested program also affects the number of participants. The more incentives that a program offers, such as money, housing or schooling, the greater the number of those who will participate in the programs.

Fact

The amount of money offered by means-tested programs is affected by the state of the economy. The number of individuals in the Food Stamps program remained constant or grew from 15 million to 25 million between 1977 to 1994, then declined each year until 2000 before the labor market weakened and the number of participants began to rise again.

References

• The Heritage Foundation: Means-Tested Welfare Spending - Past and Future Growth
• Congressional Budget Office: Changes in Participation in Means-Tested Programs
• United States General Accounting Office: Means-Tested Programs