Invezz is an independent platform with the goal of helping users achieve financial freedom. In order to fund our work, we partner with advertisers who may pay to be displayed in certain positions on certain pages, or may compensate us for referring users to their services. While our reviews and assessments of each product are independent and unbiased, the order in which brands are presented and the placement of offers may be impacted and some of the links on this page may be affiliate links from which we earn a commission. The order in which products and services appear on Invezz does not represent an endorsement from us, and please be aware that there may be other platforms available to you than the products and services that appear on our website. Read more about how we make money >
Entitlements
3 Key Takeaways
Copy link to section- Legal Right: Entitlements represent government benefits or payments that eligible individuals or groups are entitled to receive as a matter of right, based on meeting predetermined criteria established by law, rather than discretionary spending or charity.
- Mandatory Spending: Entitlements constitute mandatory spending in the federal budget, meaning they are automatically funded and not subject to annual appropriations by Congress, as opposed to discretionary spending programs, which require annual approval.
- Social Safety Net: Entitlements serve as a critical component of the social safety net, providing financial assistance, healthcare coverage, nutritional support, housing assistance, and other essential benefits to vulnerable populations, including low-income individuals, elderly adults, people with disabilities, and unemployed workers.
What are Entitlements?
Copy link to sectionEntitlements refer to government benefits or payments to which eligible individuals or groups are entitled by law, based on meeting specific criteria established by legislation or regulation. These benefits are considered mandatory spending because they are automatically funded and not subject to annual appropriations by Congress, unlike discretionary spending programs, which require annual approval through the federal budget process.
Importance of Entitlements
Copy link to section- Social Welfare: Entitlements play a crucial role in promoting social welfare and addressing socioeconomic inequalities by providing financial assistance, healthcare coverage, and social support to vulnerable populations, including low-income families, elderly individuals, people with disabilities, and unemployed workers.
- Income Security: Entitlements help ensure income security and financial stability for eligible recipients by offering regular payments, benefits, or assistance to meet basic needs, cover essential expenses, and mitigate the adverse effects of poverty, unemployment, disability, or other adverse circumstances.
- Safety Net: Entitlements serve as a safety net for individuals and families facing economic hardship or financial distress, offering a lifeline of support and assistance during times of crisis, such as job loss, illness, disability, natural disasters, or other emergencies.
How Entitlements Work
Copy link to section- Eligibility Criteria: Entitlement programs have specific eligibility criteria established by law, regulation, or policy, determining who qualifies for benefits based on factors such as age, income level, disability status, employment history, family size, or other qualifying conditions.
- Benefit Structure: Entitlement programs offer a range of benefits and services tailored to the needs of eligible recipients, including cash assistance, healthcare coverage, nutritional support, housing assistance, unemployment benefits, disability insurance, educational assistance, and veterans’ benefits, among others.
- Funding Mechanism: Entitlements are funded through various sources, including payroll taxes, trust funds, general revenues, or a combination of funding mechanisms, with funding allocated automatically to cover the cost of benefits and payments to eligible recipients without the need for annual appropriations by Congress.
Examples of Entitlements
Copy link to section- Social Security: Social Security is a federal entitlement program that provides retirement benefits, disability insurance, survivor benefits, and supplemental security income to eligible workers, retirees, survivors, and people with disabilities based on their contributions to the Social Security system.
- Medicare: Medicare is a federal entitlement program that provides healthcare coverage to eligible individuals aged 65 and older, as well as younger individuals with disabilities or end-stage renal disease, offering hospital insurance (Part A), medical insurance (Part B), and prescription drug coverage (Part D).
- Medicaid: Medicaid is a joint federal-state entitlement program that provides healthcare coverage to low-income individuals, children, pregnant women, elderly adults, and people with disabilities, offering comprehensive medical services, long-term care, and community-based supports.
Real-World Application of Entitlements
Copy link to section- Social Security Benefits: Social Security provides retirement benefits, survivor benefits, and disability benefits to eligible recipients, ensuring income security and financial stability for retirees, survivors, and people with disabilities who have paid into the Social Security system through payroll taxes during their working years.
- Medicaid Coverage: Medicaid offers healthcare coverage to millions of low-income individuals and families, providing access to essential medical services, preventive care, prescription drugs, and long-term care, thereby promoting public health and well-being and reducing disparities in healthcare access and outcomes.
- Unemployment Insurance: Unemployment insurance provides temporary financial assistance to workers who have lost their jobs through no fault of their own, offering income support, job training, and reemployment services to help unemployed individuals meet their basic needs and transition back into the workforce.
Entitlements play a vital role in promoting social welfare, ensuring income security, and providing essential support and assistance to vulnerable populations in society. By offering financial assistance, healthcare coverage, and social services to eligible recipients, entitlement programs contribute to the health, stability, and well-being of individuals, families, and communities, while addressing social and economic challenges and fostering greater equity and inclusion in society.
More definitions
Sources & references

Arti
AI Financial Assistant