Social Security vs Social Welfare: Difference and Comparison

Since human civilisation’s evolution, multiple groups have been formed for various reasons. What started from ‘hunting in packs’ grew into ‘governing institutions in the days to come.

Social welfare and social protection are two of the oldest and most fundamental government policies to cater to the needs of the public, mostly in distress.

Key Takeaways

1. Social Security is a government program that provides retirement, disability, and survivor benefits to eligible individuals who have paid into the system. At the same time, social welfare includes a broader range of programs to assist individuals or families in need.
2. Social Security is funded by payroll taxes and has specific eligibility requirements based on age, work history, and disability status. In contrast, social welfare programs may have different eligibility criteria and funding sources.
3. Social Security benefits are determined by a formula based on earnings history, while social welfare benefits may be based on factors like income, family size, and need.

Social Security vs Social Welfare

The difference between Social Security and Social Welfare is that social welfare transfers cash or means from a group (mostly govt.) to those in need. On the other hand, social protection is more like an insurance program where you reap the benefits of what you have been paying for.

Comparison Table

Parameters of Comparison	Social Security	Social Welfare
Meaning	Provided by society to individuals. It guarantees income and health care services.	Government programs secure the rights of the people against social and economic risks.
Suitability	Suitable for all those who can contribute.	Mostly suitable for workers, retired people, etc.
Funding	Funded by the beneficiary. Partly by the government and employers.	Funded by the government (state and centre), sometimes by the employer.
Psychological effect	Since security is more like an extension, there is no major effect on the mental condition in this case.	These schemes are for the less privileged in society or the unemployed. It might pave the way for complacency to creep in and can also develop inferiority complexes.
Examples	Scholarships and reservations	Health, car, and education insurance.

What is Social Welfare?

Social welfare is an umbrella term for several government policies. These policies shield the rights of people against economic and social risks.

The primary beneficiaries of these programs are the elderly, ill, unemployed, and women during pregnancy. Financing the coverage for the benefit of the people differs from country to country. 

Augustus, the first ruler of the Roman empire, started ‘Cura Annonae’. This scheme provided grains and food products to the citizens who couldn’t afford them. Emperor Trajan, the Song dynasty, and even the medieval Roman Catholic Churches enlarged social welfare.

Rashidun Caliph Umar provided money to the poor, elderly, and widows in the name of Zakat. Later on, it became one of the pillars of Islam.

What is Social Security?

Social security is a set of programs and policies which are brought in to reduce poverty and risks and promote labour markets and people’s capacity to protect themselves against loss of income. The security provided by society to individuals guarantees income and healthcare services.

Although the services are open to all, social security is in place, especially for the sick, underprivileged, and elderly.

Most of the world’s population is kept at bay as far as social security is concerned. Only 20% of the total population has adequate access to social security.

Following the industrial boom, labourers were expected to land in the formal sector eventually. The formal sector had more chances to benefit from the social security policy, although the opposite was true.

Examples of Social Security in the Modern World – 

1. The government of India and the subsequent state finance the national age-old pension scheme. This scheme benefits 1/4th of all the elderly in the country.
2. Health insurance coverage was increased from 20% to full in Korea in 1989.
3. With a combination of free access to the healthcare system, Costa Rica achieved complete health coverage.

Statistics – 

1. One in five people has adequate social security in the world.
2. More than 50% of the world’s population has no social security.
3. The informal sector in developing countries is a major source of employment. The social security conditions in these spheres are very poor.

Major Differences Between Social Welfare and Social Security

1. Social security primarily supports children, the elderly, people on parental and sick leave, the unemployed, or those suffering from some occupational injury. Welfare provides a basic level of well-being. It includes subsidized social services, including education, healthcare, housing, etc.
2. Social security is an umbrella term to ensure safety on health and security grounds. Welfare, on the other hand, protects society as a whole by providing resources to low-income families.
3. Social security is more of a ‘give and take’ process, where the individuals contribute from time to time and receive it back in the end. In some cases, the government also adds a regular stipend. Social welfare is about providing unconditional assistance to those in need.
4. People who opt for social security are actively involved in its monetary matters. Social welfare people who have opted for it or are supposed to be the beneficiaries do not have to be involved. 
5. Considering that social security is an extension of one’s savings, it doesn’t quite take a toll on a person’s mental health. On the other hand, social welfare can very well toss-up in one’s mind. According to the International Journal of Epidemiology, people who don’t work and receive the benefits of social welfare programs are more likely to report short and long-term mental health issues.