Glossary

Means testing

Limiting government benefits to people whose income or assets fall below a certain level.

Also called: means test, income-based eligibility

Means testing is the practice of making eligibility for a benefit depend on a person's or household's income and sometimes assets. Programs such as Medicaid, SNAP, housing assistance and Supplemental Security Income are means-tested, while Social Security and Medicare, in general, are not, although high earners pay higher Medicare premiums.

Proponents of extending means testing to broader programs argue that it targets resources to the people who need them most and lowers the cost of programs, and it is often proposed as a way to reduce entitlement spending. Many fiscal conservatives and some centrist Democrats have supported options like reducing Social Security benefits for high earners.

Critics argue that means testing creates "benefit cliffs" and high effective marginal tax rates when benefits phase out as income rises, discouraging work and marriage, and requires bureaucracy to verify income. Some also note that programs for the poor alone are politically weaker than universal programs that the middle class also uses, which is an argument for the contributory design of Social Security. Alternatives include a universal basic income and credits such as the earned income tax credit. The question of how targeted programs should be is central to reform of the welfare state.

Last reviewed November 8, 2026

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Related terms

Entitlement A government benefit to which people are legally entitled if they meet eligibility rules, such as Social Security and Medicare. Welfare state A system in which government provides or guarantees programs, such as pensions, health care and income support, to protect citizens' basic welfare. Earned income tax credit A refundable federal tax credit that supplements the earnings of low- and moderate-income workers, particularly those with children. Social Security trust fund The accounts, holding special Treasury securities, that receive Social Security payroll taxes and pay benefits. Universal basic income A proposal for regular cash payments to all citizens or residents, regardless of income or work status.