The “Means Test” & the Implication to the Poor in the United States

Whether you are raising children in a single parent home, married and unemployed, educated or uneducated, there may come a time in your life when you will need to call upon the welfare system. At a time of need, many Americans turn to the welfare system in an effort to gain access to the most basic of needs; food, shelter and medical care.

If you fall into a situation in which you may need assistance from Temporary Assistance to Needy Families (TANF), Earned Income Tax Credit (EITC), Supplemental Security Income (SSI), or other government based welfare programs, it is important to understand the method by which most of these “need based” programs will determine your eligibility.

The “means test” is the most common method for determining “need” for a family who is seeking welfare assistance. In many cases, SSI benefits are determined by medical and health status, but income and the ability to hold employment are also factors to be considered. In addition, your assets are also taken into consideration with many families being denied the welfare benefits simply based upon the value of the one vehicle the family owns.

Beyond SSI benefits, many American families turn to welfare programs for the purpose of obtaining food stamps. While benefits for food stamps have decreased in recent years, families with children are continuing to receive benefits at nearly the same rate, with a decrease noted in those who have no children. With the U.S. government’s use of the 1960s model on food consumption and food expenditures, it is estimated that approximately one-third of a household’s income is spent on food. To determine your “need” for food stamps, your income and “need” for food is based upon your assets and family size. From this, your need is then calculated, measured against your ability to pay, and your food stamps are authorized based upon the difference in these figures.

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To make the calculation slightly more simple, the government, when determine the “means test” will look at your gross income, subtract your cost of child care, some housing expenses and other essential living expenses. From this, your expenses are subtracted from your total assets which include your income plus any asset value over $2,000. If your net income is less than 100 percent of the poverty level, you may be eligible for food stamp assistance.

The key to successfully qualifying for food stamps lies, primarily, in being “poor” enough to fall below poverty level. Because poverty level is a term that is much debated, many families, especially those who have fallen into unemployment, find it is quite difficult to apply and receive these welfare benefits.

If you’ve struggled to make ends meet, the key to your successful approach to receiving any type of support or welfare benefits is to be certain your assets and expenses are well documented. While the government programs are designed to aid those in need, many families in need are losing welfare benefits because of lack of accurate documentation. As a result, the only other social service available may be through local non-for-profit organizations, church and even religious groups, who rely upon charitable donations to help those that the government can not assist.