Transfer payment in the context of "Welfare (financial aid)"

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⭐ Core Definition: Transfer payment

In macroeconomics and finance, a transfer payment (also called a government transfer or simply fiscal transfer) is a redistribution of income and wealth by means of the government making a payment, without goods or services being received in return (in contrast to financial transaction). These kind of payments are one-sided in nature, i.e. one party enjoys economic benefits from the other party. These payments are considered to be non-exhaustive because they do not directly absorb resources or create output. Examples of transfer payments include welfare, financial aid, social security, and government subsidies for certain businesses.

Unlike the exchange transaction which mutually benefits all the parties involved in it, the transfer payment consists of a donor and a recipient, with the donor giving up something of value without receiving anything in return. Transfers can be made both between individuals and entities, such as private companies or governmental bodies. These transactions can be both voluntary or involuntary and are generally motivated either by the altruism of the donor or the malevolence of the recipient.

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Transfer payment in the context of Revenue service

A revenue service, revenue agency or taxation authority is a government agency responsible for the intake of government revenue, including taxes and sometimes non-tax revenue. Depending on the jurisdiction, revenue services may be charged with tax collection, investigation of tax evasion, or carrying out audits.

In certain instances, they also administer payments to certain relevant individuals (such as statutory sick pay, statutory maternity pay) as well as targeted financial support (welfare) to families and individuals (through payment of tax credits or transfer payments).

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Transfer payment in the context of Census in Canada

Statistics Canada conducts a national census of population and census of agriculture every five years and releases the data with a two-year lag.

The Census of Population provides demographic and statistical data that is used to plan public services such as health care, education, and transportation; determine federal transfer payments; and determine the number of Members of Parliament for each province and territory. The Census of Population is the primary source of sociodemographic data for specific population groups, such as lone-parent families, Indigenous peoples, immigrants, seniors and language groups. Data from the census is also used to assess the economic state of the country, including the economic conditions of immigrants over time, and labour market activity of communities and specific populations. Census data are also leveraged to develop socioeconomic status indicators in support of analysis of various impacts on education achievement and outcomes. At a sub-national level, two provinces (Alberta and Saskatchewan) and two territories (Nunavut and Yukon) have legislation that allows local governments to conduct their own municipal censuses.

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Transfer payment in the context of Income inequality in the United States

Income inequality has fluctuated considerably in the United States since measurements began around 1915, moving in an arc between peaks in the 1920s and 2000s, with a lower level of inequality from approximately 1950-1980 (a period named the Great Compression), followed by increasing inequality, in what has been coined as the great divergence.

The U.S. has the highest level of income inequality among its (post-industrialized) peers. When measured for all households, U.S. income inequality is comparable to other developed countries before taxes and transfers, but is among the highest after taxes and transfers, meaning the U.S. shifts relatively less income from higher income households to lower income households. In 2016, average market income was $15,600 for the lowest quintile and $280,300 for the highest quintile. The degree of inequality accelerated within the top quintile, with the top 1% at $1.8 million, approximately 30 times the $59,300 income of the middle quintile.

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Transfer payment in the context of Social programs in the United States

In the United States, the federal and state social programs include cash assistance, health insurance, food assistance, housing subsidies, energy and utilities subsidies, and education and childcare assistance. Similar benefits are sometimes provided by the private sector either through policy mandates or on a voluntary basis. Employer-sponsored health insurance is an example of this.

American social programs vary in eligibility with some, such as public education, available to all while others, such as housing subsidies, are available only to a subsegment of the population. Programs are provided by various organizations on a federal, state, local, and private level. They help to provide basic needs such as food, shelter, education, and healthcare to residents of the U.S. through primary and secondary education, subsidies of higher education, unemployment and disability insurance, subsidies for eligible low-wage workers, subsidies for housing, Supplemental Nutrition Assistance Program benefits, pensions, and health insurance programs. Social Security, Medicare, Medicaid, and the Children's Health Insurance Program are prominent social programs.

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Transfer payment in the context of Basic income

Universal basic income (UBI) is a social welfare proposal in which all citizens of a given population regularly receive a minimum income in the form of an unconditional transfer payment, i.e., without a means test or need to perform work. In contrast, a guaranteed minimum income (GMI) is paid only to those who do not already receive an income that is enough to live on. A UBI would be received independently of any other income. If the level is sufficient to meet a person's basic needs (i.e., at or above the poverty line), it is considered a full basic income; if it is less than that amount, it is called a partial basic income. As of 2025, no country has implemented a full UBI system, but two countries—Mongolia and Iran—have had a partial UBI in the past. There have been numerous pilot projects, and the idea is discussed in many countries. Some have labelled UBI as utopian due to its historical origin.

There are several welfare arrangements that can be considered similar to basic income, although they are not unconditional. Many countries have a system of child benefit, which is essentially a basic income for guardians of children. A pension may be a basic income for retired persons. There are also quasi-basic income programs that are limited to certain population groups or time periods, like Bolsa Familia in Brazil, which is concentrated on the poor, or the Thamarat Program in Sudan, which was introduced by the transitional government to ease the effects of the economic crisis inherited from the Bashir regime. Likewise, the economic impact of the COVID-19 pandemic prompted some countries to send direct payments to its citizens. The Alaska Permanent Fund is a fund for all residents of the U.S. state of Alaska which averages $1,600 annually (in 2019 currency), and is sometimes described as the only example of a real basic income in practice. A negative income tax (NIT) can be viewed as a basic income for certain income groups in which citizens receive less and less money until this effect is reversed the more a person earns.

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