Difference Between Social Security and Social Welfare

Edited by Diffzy | Updated on: April 30, 2023


Difference Between Social Security and Social Welfare

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It’s not unusual to hear the terms social security and social welfare used interchangeably, but these two concepts have very different meanings. Social security is specifically meant to provide retirement income for people who have worked and paid into the system through their payroll taxes throughout their careers. On the other hand, social welfare functions much like any form of government assistance and may be available to anyone who meets certain criteria, whether or not they have ever worked in the traditional sense.

It is important to note that social security is not synonymous with welfare. They both serve different purposes. Social welfare programs are designed to promote some degree of financial equality between members of a society, usually by providing public services or government assistance for those in need. In contrast, social security is a form of insurance in which an individual pays money into a program in exchange for benefits at a later date; that later date can be anywhere from retirement age to death, depending on what kind of benefit you're getting and how much you're paying into it.

Thus social security is more like private-sector health insurance than it is like welfare, though they share similar roots. Both systems were created during periods of high unemployment when many people were out of work and struggling financially. That was especially true during the Great Depression when millions lost their jobs after banks failed across America. Many banks had been issuing loans without keeping enough cash reserves on hand to pay them back if depositors asked for their money back all at once (like happens in a bank run). When customers started demanding their cash back, many banks couldn't meet those demands--so they closed up shop instead. Because people needed cash immediately--to pay rent or buy food--many people lost everything as businesses closed down around them. The federal government responded by creating several programs intended to help families get through tough times.

These included unemployment insurance, where employers pay into a fund for each employee so that workers who lose their job will still have some income coming in until they find another one; and social security, where workers contribute money every month so that they'll have something to live off of when they retire. The idea behind these programs was simple: If we all pitch in now, we'll all benefit later. This is also why these types of programs are called social rather than private--they're meant to help everyone involved.

Social Security vs Social Welfare

While social security and social welfare share some similarities, there are several key differences between them. While both offer people benefit in some form, it is their goals that vary. Social security looks to provide temporary financial support for those who may not have any other means of income. It also helps to ensure that retirement does not mean a drastic change in lifestyle for those retiring from work. Social welfare, on the other hand, focuses on improving health, education, and job prospects for disadvantaged groups within society. While there is some overlap between these two ideas—social security payments may help pay bills if an individual becomes unemployed, for example—the main aim of social welfare is to ensure no one falls through gaps in society due to a lack of resources or health issues. The most notable difference between social security and social welfare is that while both involve providing benefits to individuals, social security works with existing private pension schemes while social welfare programs operate as part of a country’s public sector. These differences make each approach unique; for example, pensions are guaranteed by law but state-funded services such as health care may be more vulnerable to political changes. In practice, however, many countries combine aspects of both approaches to address poverty among citizens effectively.

Difference Between Social Security and Social Welfare in Tabular Form

Parameters of Comparison Social Security Social Welfare
Define Social security is a collection of retirement benefits that are offered by federal law in some countries around the world A social welfare policy is an approach to government that emphasizes improving the well-being of all people in society, as opposed to just some people or certain groups within society
Suitability       Suitable for all those who can contribute.       Mostly suitable for workers, retired people, etc
Examples        Scholarships and reservations     Health, car, education insurance.

What is Social Security?

If you’re an American citizen, then there’s a good chance that you benefit from some sort of social security program. Over 57 million Americans receive benefits from one of these programs. So what is social security exactly? It’s a program designed to provide financial support for eligible workers who have reached retirement age or become disabled. The United States government oversees these programs; in addition to income from taxes, Social Security receives funding from two trust funds. In total, both trust funds are worth more than $2 trillion.

You’ve probably heard of it before, but what is social security, exactly? Simply put, social security is a collection of retirement benefits that are offered by federal law in some countries around the world. If you’re in America, social security has been around since 1935 and has helped countless people live happier lives. The program involves paying individuals a regular sum of money that they can use to get by during their later years.

What Is Social Security and How Social Security Works?

The Social Security system in the United States has been around since 1935, and it’s incredibly important to millions of people who rely on it to keep their finances afloat during the most difficult times in their lives. Understanding how it works and how it affects you can help you plan better for your future and make smart financial decisions now that are better equipped to take into account the long-term impact of Social Security. What Is the Social Security?

Who Can Get It?

If you are an American citizen who has worked long enough to qualify for retirement benefits, or if you’re a spouse or child of someone eligible, then you may be able to collect. If not, then you probably won’t. You can generally start collecting at age 62, though if you wait until your full retirement age (between 65 and 67), your benefits will be larger.

Why Should I Care?

After you’ve worked for 10 years, you’re eligible to receive benefits from Social Security. If you work longer than that, your monthly benefit amount increases—but not beyond a certain limit. Your payments will also be larger if you wait to collect until you’re older; in fact, someone who waits until age 70 to claim their benefits receives seven times as much as someone who claims at 62.

Which Benefits Are Available?

The two major social security programs are Old-Age, Survivors, and Disability Insurance (OASDI) and Supplemental Security Income (SSI). OASDI provides monthly benefits to retirees after age 65 who meet minimum work requirements, as well as to their dependents. SSI is available to individuals who have limited income and resources but who also qualify for Social Security. Disability benefits are provided by both OASDI and SSI.

What is Social Welfare?

In its broadest sense, social welfare is a state in which all members of society have access to resources that can provide for their basic needs. This may mean everything from adequate food, housing, clothing, shelter, education, and medical care. To that end, governments implement programs designed to help people meet their needs. In many countries (but not all), these programs are provided through taxes that support publicly funded agencies such as schools or government housing divisions

A social welfare policy is an approach to government that emphasizes improving the well-being of all people in society, as opposed to just some people or certain groups within society. The four main social welfare programs are Social Security, Medicare, unemployment insurance, and food stamps. This definition explains the basics of what the social welfare system is and what it does, as well as how it helps the United States economically and socially.

The notion of social welfare refers to how well a society takes care of its individuals. But exactly what constitutes social welfare? How do we measure it? And does any state have a firm handle on it in real-time? The answers to these questions are far from straightforward. Social Welfare versus public assistance: When most people hear social welfare, they think about benefits given by governments as an extension of their responsibility to protect and serve their citizens.

Why do we need it?

The government has a vested interest in ensuring its citizens are being taken care of. Providing different forms of assistance to those who need, it can help improve their quality of life and therefore increase tax revenue for itself. Think about how much more productive an employee would be if they weren’t worried about how they were going to pay their next bill. Who wouldn’t want to hire that person?

How to get help from it?

You may be eligible for social welfare if you are in a very difficult financial situation and are struggling to pay your rent, mortgage, or utility bills. Social Welfare provides various benefits which include child benefits, guardian’s allowance, and carer’s allowance. You can apply for these benefits through local Social Welfare offices but make sure that you check with your family first because they may be able to help you financially instead of going through an application process with Social Welfare.

Types of Benefits

Social Security, Medicare, disability insurance, and Medicaid are all government-run benefit programs. Each of these benefits comes with a specific set of rules and guidelines to protect beneficiaries. Disability insurance falls under two categories: SSDI for people who have paid into Social Security, and SSI for those who have not. These benefits help individuals support themselves when they can no longer work, whether due to injury or illness. For more information on disability insurance benefits, contact your local government office or speak with an attorney familiar with disability law.

The Main Difference Between Social Security and Social Welfare in Points

  • Both programs are administered by individual states, but Social Security is an earned benefit that most working individuals pay each month.
  • On average, 54 percent of every dollar that goes into Social Security goes to people age 65 or older and disabled workers. The other 46 percent of payroll taxes go toward paying benefits for survivors of deceased workers.
  • Benefits available through SSI include food stamps, Medicaid, welfare grants, job training, and housing assistance. Unlike social security benefits which are paid out after retirement or when a worker becomes disabled, SSI benefits generally require that applicants prove they need financial support due to a medical condition or because they are over 65 years old and living on a limited income.
  • Social Security has nothing to do with welfare: Social Security and welfare are two different things. They are not the same, although many Americans tend to mix them up.
  • With regards to origin, both were created during different periods in American history; one during Franklin D Roosevelt’s New Deal era from 1935-1938, while others say 1933-1936; and another was created as part of Lyndon B Johnson’s Great Society program during his presidency from 1964-1968; thus, making their origins as different as night and day.
  • As far as how they operate within our government structure, Social Security operates under what we know today as payroll taxes. This means it is a system where employees contribute money to fund it and employers match those contributions.
  • This money gets deposited into what we know today as the trust fund, which is then used to make payments once an employee retires or if he/she becomes disabled.
  • In contrast, welfare operates under what we know today as tax dollars – meaning tax dollars come from taxpayers who elect officials who vote on whether or not to allocate these funds towards welfare programs such as Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), Medicaid and so forth. So, as you can see, they are quite different.
  • Social Security is a form of insurance, whereas welfare is a form of public assistance. It is important to note that in some cases, welfare recipients may be eligible to receive Social Security disability benefits. However, to receive these disability benefits, they will first have to exhaust all of their TANF and SNAP benefits before being allowed to collect any Social Security disability payments.
  • Security is funded by a trust fund that is made up of Treasury bonds, which are backed by and payable in U.S. currency; welfare programs are funded with tax dollars that are appropriated from Congress annually to run these programs.
  • Social Security benefits are based on lifetime earnings and calculated using an actuarial formula that takes into account factors such as wages, marital status, and several children, among other things; welfare benefits are based on family size and calculated using a formula that looks at income and expenses to determine what percentage of a family’s total income goes towards their monthly expenses.


While it might be a little confusing that both programs are referred to as welfare, these two social safety nets serve different purposes. Social security is a retirement benefit program that all working Americans contribute to, but not everyone will qualify for upon reaching retirement age. When you turn 65 years old, you become eligible for monthly payments from the government based on how much money you've paid into the system over your lifetime. While social security provides retirees with guaranteed income, welfare helps people who are experiencing poverty right now through a variety of assistance programs. Although it isn't as widespread as social security, many low-income people do depend on welfare to get by during times of financial hardship.



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"Difference Between Social Security and Social Welfare." Diffzy.com, 2023. Tue. 06 Jun. 2023. <https://www.diffzy.com/article/difference-between-social-security-and-social-welfare-432>.

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