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Means test
A means test is a determination of whether an individual or family is eligible for government benefits, assistance or welfare, based upon whether the individual or family possesses the means to do with less or none of that help. Means testing is in opposition to universal coverage, which extends benefits to everyone. Means testing increases the administrative burden and can create perverse incentives.
In Canada, means tests are used for student finance (for post-secondary education), legal aid, and "welfare" (direct transfer payments to individuals to combat poverty). They are not generally used for primary and secondary education which are tax-funded. Means tests for public health insurance were once common but are now illegal, as the Canada Health Act of 1984 requires that all the provinces provide universal healthcare coverage to be eligible for subsidies from the federal government. Means tests are also not used for pensions and seniors' benefits, but there is a clawback of Old Age Security payments for people making over $69,562 (in 2012). The Last Post Fund uses a means test on a deceased veteran's estate and surviving widow to determine whether they are eligible for federal funding to subsidize their funeral.
Resentment over a means test was among the factors giving rise to the National Unemployed Workers' Movement in the United Kingdom. Today, means-tested benefits—meaning that entitlement is affected by the amount of income, savings, capital and assets— is a central feature of the benefit system. Means testing is also part of the determination of legal aid in a magistrates court and for the higher Crown Court. The means test is based on income, family circumstances and essential living costs. The Beveridge Report of 1942 proposed a system of contributory benefits which would leave only a residual role for means-tested benefits which were then called National Assistance. The income limits are specified in relation to the needs of a household and for savings there are upper limits for some of the benefits. A couple who are not married may be treated as living together as a married couple.
The main means-tested benefits in 2019 were:
Receipt of such benefits other than Housing Benefit and tax credits is a passport to other non-cash help such as free school meals, free prescription charges, Legal Aid, cold weather payment. The claimant, their partner and dependent children are covered. The rules for free NHS dentistry and optical charges have become more complex since the introduction of Universal Credit and have led to many people facing financial penalties, often wrongly. People who are not entitled to any of the qualifying benefits may be able to qualify for help with health charges by a separate means test, the NHS Low Income Scheme. Defunct benefits include:
Means testing is used to test for eligibility to Medicaid, Temporary Assistance for Needy Families, Section 8 housing, Supplemental Nutrition Assistance Program, Pell Grant, Federal Supplemental Educational Opportunity Grant, Federal Work-Study Program, direct subsidized student loans, as well as the eligibility for relief for debtors who have sufficient financial means to pay a portion of their debts. The means test is perhaps best recognized in the United States as the test used by courts to determine eligibility for Title 11 of the United States Code Chapter 7 or Chapter 13 bankruptcy.
During the Great Depression in the 1930s, the test was used to screen applicants for such programs as Home Relief, and starting in the 1960s, for benefits such as those provided by Medicaid and the Food Stamp Program.
In 1992, third-party presidential candidate Ross Perot proposed that future Social Security benefits be subjected to a means test; though some viewed it as a potential solution to the program's potential insolvency, few other political candidates since Perot have publicly made the same suggestion, which would require costly investigations, might associate accepting those benefits with social stigma, may worsen the poverty trap, and demotivate people from saving or otherwise improving their conditions.
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Means test
A means test is a determination of whether an individual or family is eligible for government benefits, assistance or welfare, based upon whether the individual or family possesses the means to do with less or none of that help. Means testing is in opposition to universal coverage, which extends benefits to everyone. Means testing increases the administrative burden and can create perverse incentives.
In Canada, means tests are used for student finance (for post-secondary education), legal aid, and "welfare" (direct transfer payments to individuals to combat poverty). They are not generally used for primary and secondary education which are tax-funded. Means tests for public health insurance were once common but are now illegal, as the Canada Health Act of 1984 requires that all the provinces provide universal healthcare coverage to be eligible for subsidies from the federal government. Means tests are also not used for pensions and seniors' benefits, but there is a clawback of Old Age Security payments for people making over $69,562 (in 2012). The Last Post Fund uses a means test on a deceased veteran's estate and surviving widow to determine whether they are eligible for federal funding to subsidize their funeral.
Resentment over a means test was among the factors giving rise to the National Unemployed Workers' Movement in the United Kingdom. Today, means-tested benefits—meaning that entitlement is affected by the amount of income, savings, capital and assets— is a central feature of the benefit system. Means testing is also part of the determination of legal aid in a magistrates court and for the higher Crown Court. The means test is based on income, family circumstances and essential living costs. The Beveridge Report of 1942 proposed a system of contributory benefits which would leave only a residual role for means-tested benefits which were then called National Assistance. The income limits are specified in relation to the needs of a household and for savings there are upper limits for some of the benefits. A couple who are not married may be treated as living together as a married couple.
The main means-tested benefits in 2019 were:
Receipt of such benefits other than Housing Benefit and tax credits is a passport to other non-cash help such as free school meals, free prescription charges, Legal Aid, cold weather payment. The claimant, their partner and dependent children are covered. The rules for free NHS dentistry and optical charges have become more complex since the introduction of Universal Credit and have led to many people facing financial penalties, often wrongly. People who are not entitled to any of the qualifying benefits may be able to qualify for help with health charges by a separate means test, the NHS Low Income Scheme. Defunct benefits include:
Means testing is used to test for eligibility to Medicaid, Temporary Assistance for Needy Families, Section 8 housing, Supplemental Nutrition Assistance Program, Pell Grant, Federal Supplemental Educational Opportunity Grant, Federal Work-Study Program, direct subsidized student loans, as well as the eligibility for relief for debtors who have sufficient financial means to pay a portion of their debts. The means test is perhaps best recognized in the United States as the test used by courts to determine eligibility for Title 11 of the United States Code Chapter 7 or Chapter 13 bankruptcy.
During the Great Depression in the 1930s, the test was used to screen applicants for such programs as Home Relief, and starting in the 1960s, for benefits such as those provided by Medicaid and the Food Stamp Program.
In 1992, third-party presidential candidate Ross Perot proposed that future Social Security benefits be subjected to a means test; though some viewed it as a potential solution to the program's potential insolvency, few other political candidates since Perot have publicly made the same suggestion, which would require costly investigations, might associate accepting those benefits with social stigma, may worsen the poverty trap, and demotivate people from saving or otherwise improving their conditions.