In common United States parlance, social welfare is a synonym for the provision of financial aid in the form of social security.
However, in other parts of the world, social welfare includes the provision of a wide range of social services provided by the state that benefit individual citizens. In most these are considered natural rights, and indeed that position is borne out by the UN Convention on Social and Economic Rights and other treaty documents. Accordingly many refer to welfare within a context of social justice, making an analogy to negative rights of fair treatment or restraint in criminal justice.
Access to such services is usually on the basis of provable need, rather than simple lack of ability to pay for services. These services are often provided free of charge, or at a nominal fee, with the state, ultimately the taxpayer, picking up the majority of the cost. Typical social welfare services include:
- Government controlled or regulated, often compulsory, Superannuation savings schemes.
- Government controlled or regulated, often compulsory, social insurance schemes, often based on income, to pay for the social welfare service being provided. These are often incorporated into the taxation system and may be inseparable from income tax.
- Pensions or other financial aid, including Social Security and tax relief, to those with low incomes or inability to meet basic living costs, especially those who are raising children, elderly, unemployed, injured, sick or disabled.
- Free or low cost nursing, medical and hospital care for those who who are sick, injured or unable to care for themselves. This may also include free antenatal and postnatal care. Services may be provided in the community or a medical facility.
- Free or low cost education for all children, and financial aid, sometimes as a scholarship or pension, sometimes in the form of a suspensory loan, to students attending academic institutions or undertaking vocational training.
- The state may also fund or operate social work and community based organisations that provide services that benefit disadvantaged people in the community.
States or nations that provide comprehensive social welfare programmes are often identified as having a welfare state. In such countries access to social welfare services is often considered a basic and inalienable right to those in need.
In economics, social welfare refers to the overall utilitarian state of society. In practice, many economists use Pareto efficiency, a very conservative (in both senses) measure of social welfare, to determine which of two possible situations is preferable.
In order to reproduce utilitarian philosophy more faithfully in economic models, it is necessary to suppose the existence of a social welfare function, which specifies which situations are better than others, in terms of the resources held by everyone in society.
A crude social welfare function can be constructed by measuring the subjective dollar value of goods and services distributed to participants in the economy (see also consumer surplus). Means of actually measuring well-being have been proposed as an alternative to price indices, which are seen as promoting consumerism and productivism by many (even classical) economists.
The fields of welfare economics and human development theory explore these issues, and consider them fundamental to the development process itself.