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Means Tested Welfare

5/22/2014

 
It is totally understandable to only want to give help to those that do not have enough money to care for themselves.  However, the structure of this system can also entrap people in the welfare system.   People receiving one or all 79 means-tested programs lose benefits when they start earning money.  ​
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While this takes things to the extreme, it does make the point.
The government money and benefits not received creates a very low return on working hard in a low wage entry level position, thus giving low incentives to work.  Once enrolled in many benefits, work often means a lower standard of living, judged strictly in dollars. 


The fix is to allow many different charities to try new ideas and methods and have Rating Agencies do major investigations, rate, and report.  Everyone will decide from roughly a dozen different CDA's (Welfare to Charity), which will all have different models, how their mandated charity funds will be spent.   

Under government welfare, if a mother has a chronically sick child on Medicaid, it is inconceivable for her to get a job that earns more than the means test for Medicaid.  Benefit cliffs are when benefits are lost at a specific income level.  If a person is earning $11,999 a year and the cut off is $12,000 per year, then earning one more dollar can mean losing a benefit worth thousands.   

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