Four main categories of government benefits
Unemployment Benefits
- Cash payments made to individuals who lost their job due to no fault of their own
- Amount and duration of unemployment benefits depends on how much the employee was earning immediately prior to losing the job
- Benefits typically last for 26 weeks or less
- Maximum unemployment benefits are capped
Medicaid & Medicare
- Medicaid is a health insurance program for low-income households
- Medicare is a federally run health insurance program for elderly individuals, when each reaches age 65
SNAP & TANF
- Supplemental Nutrition Assistance Program (SNAP)
- Provides money to low income households to purchase food (also called food stamps)
- Temporary Assistance for Needy Families (TANF)
- Provides supplemental income to very low-income, unemployed households, typically with children
- To apply for these benefits a household needs to provide evidence of their financial situation, proof of US residency and verification of each family members age and earnings situation
Grants
Another form of government transfer is a grant. A popular federal grant is the Federal Pell Grant Program
- PROVIDES FINANCIAL AID FOR LOW INCOME UNDERGRADUATE AND CERATIN POST BACCALAUREATE STUDENTS
- Can be used towards a degree
- Grant amount depends on
- Students expected family contribution
- Cost of attendance
- Students enrollment status
- Whether the student attends a full academic year or less
Others
- A refundable tax credit reduces the amount of tax someone must pay by not only reducing the amount owed but if the credit exceeds the tax liability the difference can be received directly
- Social security benefits are based on earnings history
- If you have sufficient earnings history, you or dependents may qualify for benefits
- Retirement benefits when you retire
- Disability benefits if you become disabled
- Family benefits if you were to die while providing for children under 18