Light

Income Transfers

Definition

Income transfers are payments made by governments or organizations to individuals or households who have low incomes or face financial hardships. These transfers aim to redistribute wealth and provide assistance for basic needs.

Analogy

Imagine income transfers as a safety net that catches people who fall into financial difficulties. Just like how acrobats rely on safety nets during their performances, income transfers help support those who may struggle financially by providing them with necessary resources.

Related terms

Social Security Benefits: Social security benefits are a type of income transfer provided by governments to retired workers or individuals with disabilities. These benefits help ensure financial stability during retirement or when facing health challenges.

Unemployment Benefits: Unemployment benefits are payments given by governments to individuals who have lost their jobs involuntarily. These benefits provide temporary financial support while individuals search for new employment.

Welfare Programs: Welfare programs encompass a range of income transfers and social services provided by governments to assist low-income individuals or families. These programs may include cash assistance, food stamps, and healthcare subsidies.