Generally speaking, the American income maintenance system is divided into two "tracks" based on the relationship of beneficiaries to the labor force. For the so-called "insurance-like" programs, notably Old Age and Survivors Insurance (what Americans refer to colloquially as "Social Security"), Social Security Disability Insurance, and Unemployment Compensation, eligibility is linked to an applicant's history of payroll deductions—contributions from wages to the public fund that supports the program. The so-called "welfare" programs, on the other hand, are "means-tested." That is, eligibility hinges on meeting strict limits on current earnings and accumulated wealth. Welfare programs are for very poor people and their benefits are substantially inferior to those paid by the insurance-like programs.

As well, the American income maintenance system is "categorical." For the most part, eligibility is based on membership in...