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cdx-button--weight-quiet cdx-button--icon-only " aria-hidden="true" ><span class="vector-icon mw-ui-icon-appearance mw-ui-icon-wikimedia-appearance"></span> <span class="vector-dropdown-label-text">Appearance</span> </label> <div class="vector-dropdown-content"> <div id="vector-appearance-unpinned-container" class="vector-unpinned-container"> </div> </div> </div> </nav> <div id="p-vector-user-menu-notifications" class="vector-menu mw-portlet emptyPortlet" > <div class="vector-menu-content"> <ul class="vector-menu-content-list"> </ul> </div> </div> <div id="p-vector-user-menu-overflow" class="vector-menu mw-portlet" > <div class="vector-menu-content"> <ul class="vector-menu-content-list"> <li id="pt-sitesupport-2" class="user-links-collapsible-item mw-list-item user-links-collapsible-item"><a data-mw="interface" href="https://donate.wikimedia.org/wiki/Special:FundraiserRedirector?utm_source=donate&utm_medium=sidebar&utm_campaign=C13_en.wikipedia.org&uselang=en" class=""><span>Donate</span></a> </li> <li id="pt-createaccount-2" class="user-links-collapsible-item mw-list-item user-links-collapsible-item"><a data-mw="interface" href="/w/index.php?title=Special:CreateAccount&returnto=Transfer+payment" title="You are encouraged to create an account and log in; however, it is not mandatory" class=""><span>Create account</span></a> </li> <li id="pt-login-2" class="user-links-collapsible-item mw-list-item user-links-collapsible-item"><a data-mw="interface" href="/w/index.php?title=Special:UserLogin&returnto=Transfer+payment" title="You're encouraged to log in; however, it's not mandatory. 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[o]" accesskey="o"><span class="vector-icon mw-ui-icon-logIn mw-ui-icon-wikimedia-logIn"></span> <span>Log in</span></a></li> </ul> </div> </div> <div id="p-user-menu-anon-editor" class="vector-menu mw-portlet mw-portlet-user-menu-anon-editor" > <div class="vector-menu-heading"> Pages for logged out editors <a href="/wiki/Help:Introduction" aria-label="Learn more about editing"><span>learn more</span></a> </div> <div class="vector-menu-content"> <ul class="vector-menu-content-list"> <li id="pt-anoncontribs" class="mw-list-item"><a href="/wiki/Special:MyContributions" title="A list of edits made from this IP address [y]" accesskey="y"><span>Contributions</span></a></li><li id="pt-anontalk" class="mw-list-item"><a href="/wiki/Special:MyTalk" title="Discussion about edits from this IP address [n]" accesskey="n"><span>Talk</span></a></li> </ul> </div> </div> </div> </div> </nav> </div> </header> </div> <div class="mw-page-container"> <div class="mw-page-container-inner"> <div class="vector-sitenotice-container"> <div id="siteNotice"></div> </div> <div class="vector-column-start"> <div class="vector-main-menu-container"> <div id="mw-navigation"> <nav id="mw-panel" class="vector-main-menu-landmark" aria-label="Site"> <div id="vector-main-menu-pinned-container" class="vector-pinned-container"> </div> </nav> </div> </div> <div class="vector-sticky-pinned-container"> <nav id="mw-panel-toc" aria-label="Contents" data-event-name="ui.sidebar-toc" class="mw-table-of-contents-container vector-toc-landmark"> <div id="vector-toc-pinned-container" class="vector-pinned-container"> <div id="vector-toc" class="vector-toc vector-pinnable-element"> <div class="vector-pinnable-header vector-toc-pinnable-header vector-pinnable-header-pinned" data-feature-name="toc-pinned" data-pinnable-element-id="vector-toc" > <h2 class="vector-pinnable-header-label">Contents</h2> <button class="vector-pinnable-header-toggle-button vector-pinnable-header-pin-button" data-event-name="pinnable-header.vector-toc.pin">move to sidebar</button> <button class="vector-pinnable-header-toggle-button vector-pinnable-header-unpin-button" data-event-name="pinnable-header.vector-toc.unpin">hide</button> </div> <ul class="vector-toc-contents" id="mw-panel-toc-list"> <li id="toc-mw-content-text" class="vector-toc-list-item vector-toc-level-1"> <a href="#" class="vector-toc-link"> <div class="vector-toc-text">(Top)</div> </a> </li> <li id="toc-Criticism" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#Criticism"> <div class="vector-toc-text"> <span class="vector-toc-numb">1</span> <span>Criticism</span> </div> </a> <ul id="toc-Criticism-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Methods_of_payment" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#Methods_of_payment"> <div class="vector-toc-text"> <span class="vector-toc-numb">2</span> <span>Methods of payment</span> </div> </a> <button aria-controls="toc-Methods_of_payment-sublist" class="cdx-button cdx-button--weight-quiet cdx-button--icon-only vector-toc-toggle"> <span class="vector-icon mw-ui-icon-wikimedia-expand"></span> <span>Toggle Methods of payment subsection</span> </button> <ul id="toc-Methods_of_payment-sublist" class="vector-toc-list"> <li id="toc-Cash" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Cash"> <div class="vector-toc-text"> <span class="vector-toc-numb">2.1</span> <span>Cash</span> </div> </a> <ul id="toc-Cash-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-In-kind_transfer" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#In-kind_transfer"> <div class="vector-toc-text"> <span class="vector-toc-numb">2.2</span> <span>In-kind transfer</span> </div> </a> <ul id="toc-In-kind_transfer-sublist" class="vector-toc-list"> </ul> </li> </ul> </li> <li id="toc-Social_security_benefit" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#Social_security_benefit"> <div class="vector-toc-text"> <span class="vector-toc-numb">3</span> <span>Social security benefit</span> </div> </a> <ul id="toc-Social_security_benefit-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-By_country" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#By_country"> <div class="vector-toc-text"> <span class="vector-toc-numb">4</span> <span>By country</span> </div> </a> <button aria-controls="toc-By_country-sublist" class="cdx-button cdx-button--weight-quiet cdx-button--icon-only vector-toc-toggle"> <span class="vector-icon mw-ui-icon-wikimedia-expand"></span> <span>Toggle By country subsection</span> </button> <ul id="toc-By_country-sublist" class="vector-toc-list"> <li id="toc-Australia" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Australia"> <div class="vector-toc-text"> <span class="vector-toc-numb">4.1</span> <span>Australia</span> </div> </a> <ul id="toc-Australia-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Canada" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Canada"> <div class="vector-toc-text"> <span class="vector-toc-numb">4.2</span> <span>Canada</span> </div> </a> <ul id="toc-Canada-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-China" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#China"> <div class="vector-toc-text"> <span class="vector-toc-numb">4.3</span> <span>China</span> </div> </a> <ul id="toc-China-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-India" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#India"> <div class="vector-toc-text"> <span class="vector-toc-numb">4.4</span> <span>India</span> </div> </a> <ul id="toc-India-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-United_States" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#United_States"> <div class="vector-toc-text"> <span class="vector-toc-numb">4.5</span> <span>United States</span> </div> </a> <ul id="toc-United_States-sublist" class="vector-toc-list"> </ul> </li> </ul> </li> <li id="toc-See_also" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#See_also"> <div class="vector-toc-text"> <span class="vector-toc-numb">5</span> <span>See also</span> </div> </a> <ul id="toc-See_also-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-References" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#References"> <div class="vector-toc-text"> <span class="vector-toc-numb">6</span> <span>References</span> </div> </a> <ul id="toc-References-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-External_links" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#External_links"> <div class="vector-toc-text"> <span class="vector-toc-numb">7</span> <span>External links</span> </div> </a> <ul id="toc-External_links-sublist" class="vector-toc-list"> </ul> </li> </ul> </div> </div> </nav> </div> </div> <div class="mw-content-container"> <main id="content" class="mw-body"> <header class="mw-body-header vector-page-titlebar"> <nav aria-label="Contents" class="vector-toc-landmark"> <div id="vector-page-titlebar-toc" class="vector-dropdown vector-page-titlebar-toc vector-button-flush-left" > <input type="checkbox" id="vector-page-titlebar-toc-checkbox" role="button" aria-haspopup="true" data-event-name="ui.dropdown-vector-page-titlebar-toc" class="vector-dropdown-checkbox " aria-label="Toggle the table of contents" > <label id="vector-page-titlebar-toc-label" for="vector-page-titlebar-toc-checkbox" class="vector-dropdown-label cdx-button cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--weight-quiet cdx-button--icon-only " aria-hidden="true" ><span class="vector-icon mw-ui-icon-listBullet mw-ui-icon-wikimedia-listBullet"></span> <span class="vector-dropdown-label-text">Toggle the table of contents</span> </label> <div class="vector-dropdown-content"> <div id="vector-page-titlebar-toc-unpinned-container" class="vector-unpinned-container"> </div> </div> </div> </nav> <h1 id="firstHeading" class="firstHeading mw-first-heading"><span class="mw-page-title-main">Transfer payment</span></h1> <div id="p-lang-btn" class="vector-dropdown mw-portlet mw-portlet-lang" > <input type="checkbox" id="p-lang-btn-checkbox" role="button" aria-haspopup="true" data-event-name="ui.dropdown-p-lang-btn" class="vector-dropdown-checkbox mw-interlanguage-selector" aria-label="Go to an article in another language. Available in 19 languages" > <label id="p-lang-btn-label" for="p-lang-btn-checkbox" class="vector-dropdown-label cdx-button cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--weight-quiet cdx-button--action-progressive mw-portlet-lang-heading-19" aria-hidden="true" ><span class="vector-icon mw-ui-icon-language-progressive mw-ui-icon-wikimedia-language-progressive"></span> <span class="vector-dropdown-label-text">19 languages</span> </label> <div class="vector-dropdown-content"> <div class="vector-menu-content"> <ul class="vector-menu-content-list"> <li class="interlanguage-link interwiki-ar mw-list-item"><a href="https://ar.wikipedia.org/wiki/%D9%85%D8%AF%D9%81%D9%88%D8%B9%D8%A7%D8%AA_%D8%AA%D8%AD%D9%88%D9%8A%D9%84%D9%8A%D8%A9" title="مدفوعات تحويلية – Arabic" lang="ar" hreflang="ar" data-title="مدفوعات تحويلية" data-language-autonym="العربية" data-language-local-name="Arabic" class="interlanguage-link-target"><span>العربية</span></a></li><li class="interlanguage-link interwiki-az mw-list-item"><a href="https://az.wikipedia.org/wiki/Transfert_%C3%B6d%C9%99ni%C5%9Fi" title="Transfert ödənişi – Azerbaijani" lang="az" hreflang="az" data-title="Transfert ödənişi" data-language-autonym="Azərbaycanca" data-language-local-name="Azerbaijani" class="interlanguage-link-target"><span>Azərbaycanca</span></a></li><li class="interlanguage-link interwiki-be mw-list-item"><a href="https://be.wikipedia.org/wiki/%D0%A2%D1%80%D0%B0%D0%BD%D1%81%D1%84%D0%B5%D1%80%D1%82" title="Трансферт – Belarusian" lang="be" hreflang="be" data-title="Трансферт" data-language-autonym="Беларуская" data-language-local-name="Belarusian" class="interlanguage-link-target"><span>Беларуская</span></a></li><li class="interlanguage-link interwiki-be-x-old mw-list-item"><a href="https://be-tarask.wikipedia.org/wiki/%D0%A2%D1%80%D0%B0%D0%BD%D1%81%D1%84%D1%8D%D1%80%D1%82" title="Трансфэрт – Belarusian (Taraškievica orthography)" lang="be-tarask" hreflang="be-tarask" data-title="Трансфэрт" data-language-autonym="Беларуская (тарашкевіца)" data-language-local-name="Belarusian (Taraškievica orthography)" class="interlanguage-link-target"><span>Беларуская (тарашкевіца)</span></a></li><li class="interlanguage-link interwiki-ca mw-list-item"><a href="https://ca.wikipedia.org/wiki/Pagament_de_transfer%C3%A8ncia" title="Pagament de transferència – Catalan" lang="ca" hreflang="ca" data-title="Pagament de transferència" data-language-autonym="Català" data-language-local-name="Catalan" class="interlanguage-link-target"><span>Català</span></a></li><li class="interlanguage-link interwiki-cs mw-list-item"><a href="https://cs.wikipedia.org/wiki/Transfer" title="Transfer – Czech" lang="cs" hreflang="cs" data-title="Transfer" data-language-autonym="Čeština" data-language-local-name="Czech" class="interlanguage-link-target"><span>Čeština</span></a></li><li class="interlanguage-link interwiki-da mw-list-item"><a href="https://da.wikipedia.org/wiki/Overf%C3%B8rselsindkomst" title="Overførselsindkomst – Danish" lang="da" hreflang="da" data-title="Overførselsindkomst" data-language-autonym="Dansk" data-language-local-name="Danish" class="interlanguage-link-target"><span>Dansk</span></a></li><li class="interlanguage-link interwiki-de mw-list-item"><a href="https://de.wikipedia.org/wiki/Transferleistung" title="Transferleistung – German" lang="de" hreflang="de" data-title="Transferleistung" data-language-autonym="Deutsch" data-language-local-name="German" class="interlanguage-link-target"><span>Deutsch</span></a></li><li class="interlanguage-link interwiki-he mw-list-item"><a href="https://he.wikipedia.org/wiki/%D7%AA%D7%A9%D7%9C%D7%95%D7%9D_%D7%94%D7%A2%D7%91%D7%A8%D7%94" title="תשלום העברה – Hebrew" lang="he" hreflang="he" data-title="תשלום העברה" data-language-autonym="עברית" data-language-local-name="Hebrew" class="interlanguage-link-target"><span>עברית</span></a></li><li class="interlanguage-link interwiki-lv mw-list-item"><a href="https://lv.wikipedia.org/wiki/Transferts" title="Transferts – Latvian" lang="lv" hreflang="lv" data-title="Transferts" data-language-autonym="Latviešu" data-language-local-name="Latvian" class="interlanguage-link-target"><span>Latviešu</span></a></li><li class="interlanguage-link interwiki-nl mw-list-item"><a href="https://nl.wikipedia.org/wiki/Overdrachtsbetaling" title="Overdrachtsbetaling – Dutch" lang="nl" hreflang="nl" data-title="Overdrachtsbetaling" data-language-autonym="Nederlands" data-language-local-name="Dutch" class="interlanguage-link-target"><span>Nederlands</span></a></li><li class="interlanguage-link interwiki-pl mw-list-item"><a href="https://pl.wikipedia.org/wiki/P%C5%82atno%C5%9B%C4%87_transferowa" title="Płatność transferowa – Polish" lang="pl" hreflang="pl" data-title="Płatność transferowa" data-language-autonym="Polski" data-language-local-name="Polish" class="interlanguage-link-target"><span>Polski</span></a></li><li class="interlanguage-link interwiki-ru mw-list-item"><a href="https://ru.wikipedia.org/wiki/%D0%A2%D1%80%D0%B0%D0%BD%D1%81%D1%84%D0%B5%D1%80%D1%82%D0%BD%D1%8B%D0%B9_%D0%BF%D0%BB%D0%B0%D1%82%D1%91%D0%B6" title="Трансфертный платёж – Russian" lang="ru" hreflang="ru" data-title="Трансфертный платёж" data-language-autonym="Русский" data-language-local-name="Russian" class="interlanguage-link-target"><span>Русский</span></a></li><li class="interlanguage-link interwiki-fi mw-list-item"><a href="https://fi.wikipedia.org/wiki/Tulonsiirto" title="Tulonsiirto – Finnish" lang="fi" hreflang="fi" data-title="Tulonsiirto" data-language-autonym="Suomi" data-language-local-name="Finnish" class="interlanguage-link-target"><span>Suomi</span></a></li><li class="interlanguage-link interwiki-sv mw-list-item"><a href="https://sv.wikipedia.org/wiki/Transferering" title="Transferering – Swedish" lang="sv" hreflang="sv" data-title="Transferering" data-language-autonym="Svenska" data-language-local-name="Swedish" class="interlanguage-link-target"><span>Svenska</span></a></li><li class="interlanguage-link interwiki-tr mw-list-item"><a href="https://tr.wikipedia.org/wiki/Transfer_harcamas%C4%B1" title="Transfer harcaması – Turkish" lang="tr" hreflang="tr" data-title="Transfer harcaması" data-language-autonym="Türkçe" data-language-local-name="Turkish" class="interlanguage-link-target"><span>Türkçe</span></a></li><li class="interlanguage-link interwiki-uk mw-list-item"><a href="https://uk.wikipedia.org/wiki/%D0%A2%D1%80%D0%B0%D0%BD%D1%81%D1%84%D0%B5%D1%80%D0%BD%D1%96_%D0%BF%D0%BB%D0%B0%D1%82%D0%B5%D0%B6%D1%96" title="Трансферні платежі – Ukrainian" lang="uk" hreflang="uk" data-title="Трансферні платежі" data-language-autonym="Українська" data-language-local-name="Ukrainian" class="interlanguage-link-target"><span>Українська</span></a></li><li class="interlanguage-link interwiki-zh-yue mw-list-item"><a href="https://zh-yue.wikipedia.org/wiki/%E8%BD%89%E7%A7%BB%E6%94%AF%E4%BB%98" title="轉移支付 – Cantonese" lang="yue" hreflang="yue" data-title="轉移支付" data-language-autonym="粵語" data-language-local-name="Cantonese" class="interlanguage-link-target"><span>粵語</span></a></li><li class="interlanguage-link interwiki-zh mw-list-item"><a href="https://zh.wikipedia.org/wiki/%E8%BD%AC%E7%A7%BB%E6%94%AF%E4%BB%98" title="转移支付 – Chinese" lang="zh" hreflang="zh" data-title="转移支付" data-language-autonym="中文" data-language-local-name="Chinese" class="interlanguage-link-target"><span>中文</span></a></li> </ul> <div class="after-portlet after-portlet-lang"><span class="wb-langlinks-edit wb-langlinks-link"><a href="https://www.wikidata.org/wiki/Special:EntityPage/Q1411457#sitelinks-wikipedia" title="Edit interlanguage links" class="wbc-editpage">Edit links</a></span></div> </div> </div> </div> </header> <div class="vector-page-toolbar"> <div class="vector-page-toolbar-container"> <div id="left-navigation"> <nav aria-label="Namespaces"> <div id="p-associated-pages" class="vector-menu vector-menu-tabs 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src="//upload.wikimedia.org/wikipedia/commons/thumb/f/fd/Transfer_payments_as_a_percent_of_federal_revenue.webp/325px-Transfer_payments_as_a_percent_of_federal_revenue.webp.png" decoding="async" width="325" height="176" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/f/fd/Transfer_payments_as_a_percent_of_federal_revenue.webp/488px-Transfer_payments_as_a_percent_of_federal_revenue.webp.png 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/f/fd/Transfer_payments_as_a_percent_of_federal_revenue.webp/650px-Transfer_payments_as_a_percent_of_federal_revenue.webp.png 2x" data-file-width="5470" data-file-height="2970" /></a><figcaption>Transfer payments to (persons) as a percent of federal revenue in the <a href="/wiki/United_States" title="United States">United States</a></figcaption></figure> <figure typeof="mw:File/Thumb"><a href="/wiki/File:Transfer_payments_to_persons_%2B_business.webp" class="mw-file-description"><img src="//upload.wikimedia.org/wikipedia/commons/thumb/5/5c/Transfer_payments_to_persons_%2B_business.webp/325px-Transfer_payments_to_persons_%2B_business.webp.png" decoding="async" width="325" height="172" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/5/5c/Transfer_payments_to_persons_%2B_business.webp/488px-Transfer_payments_to_persons_%2B_business.webp.png 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/5/5c/Transfer_payments_to_persons_%2B_business.webp/650px-Transfer_payments_to_persons_%2B_business.webp.png 2x" data-file-width="5323" data-file-height="2809" /></a><figcaption>Transfer payments to (persons + business) in the United States</figcaption></figure> <p>In <a href="/wiki/Macroeconomics" title="Macroeconomics">macroeconomics</a> and <a href="/wiki/Finance" title="Finance">finance</a>, a <b>transfer payment</b> (also called a <b>government transfer</b> or simply <b>fiscal transfer</b>) is a <a href="/wiki/Redistribution_of_income_and_wealth" title="Redistribution of income and wealth">redistribution of income and wealth</a> by means of the <a href="/wiki/Government" title="Government">government</a> making a payment, without <a href="/wiki/Goods_and_services" title="Goods and services">goods or services</a> being received in return (in contrast to <a href="/wiki/Financial_transaction" title="Financial transaction">financial transaction</a>). These kind of payments are one-sided in nature, i.e. one party enjoys economic benefits from the other party. These payments are considered to be non-exhaustive because they do not directly absorb <a href="/wiki/Factors_of_production" title="Factors of production">resources</a> or create <a href="/wiki/Output_(economics)" title="Output (economics)">output</a>.<sup id="cite_ref-1" class="reference"><a href="#cite_note-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> Examples of transfer payments include <a href="/wiki/Welfare_(financial_aid)" class="mw-redirect" title="Welfare (financial aid)">welfare, financial aid</a>, <a href="/wiki/Social_security" class="mw-redirect" title="Social security">social security</a>, and government <a href="/wiki/Subsidy" title="Subsidy">subsidies</a> for certain <a href="/wiki/Business" title="Business">businesses</a>. </p><p>Unlike the <a href="/wiki/Trade" title="Trade">exchange</a> transaction which mutually benefits all the parties involved in it, the transfer payment consists of a donor and a recipient, with the donor giving up something of value without receiving anything in return. Transfers can be made both between individuals and entities, such as private <a href="/wiki/Company" title="Company">companies</a> or <a href="/wiki/Government_agency" title="Government agency">governmental bodies</a>. These transactions can be both voluntary or involuntary and are generally motivated either by the <a href="/wiki/Altruism" title="Altruism">altruism</a> of the donor or the malevolence of the recipient.<sup id="cite_ref-2" class="reference"><a href="#cite_note-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> </p><p>For the purpose of calculating <a href="/wiki/Gross_domestic_product" title="Gross domestic product">gross domestic product</a> (GDP) by expenditure method, <a href="/wiki/Government_spending" title="Government spending">government spending</a> does not include transfer payments, which are the reallocation of money from one party to another rather than expenditure on newly produced goods and services.<sup id="cite_ref-HallLieberman2012_3-0" class="reference"><a href="#cite_note-HallLieberman2012-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup> </p> <meta property="mw:PageProp/toc" /> <div class="mw-heading mw-heading2"><h2 id="Criticism">Criticism</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=1" title="Edit section: Criticism"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>A criticism of transfer payments is that they do not produce outcomes that are economically advantageous. Governments pool <a href="/wiki/Tax" title="Tax">taxes</a> and other <a href="/wiki/Government_revenue" title="Government revenue">sources of revenue</a> together and spend the money to further a certain agenda. Some of the spending pays for goods and services, such as buildings, equipment, and government worker salaries. These expenditures are exchanges in which money is traded for something with a recognized value. The payments may be viewed as boosting <a href="/wiki/Industrial_activity" class="mw-redirect" title="Industrial activity">industrial activity</a> and <a href="/wiki/Employment" title="Employment">employment</a>. However, government transfer payments do not boost production or economic activity. For example, foreign aid does not necessarily prompt foreign trade.<sup id="cite_ref-4" class="reference"><a href="#cite_note-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> Additionally, some argue that <a href="/wiki/Welfare_program" class="mw-redirect" title="Welfare program">welfare programs</a>, such as unemployment benefits, reduce incentives to take paid work. </p><p>Furthermore, the macroeconomic effect of transfer payments is reduced in the lower income countries and regions/states. The reasons for such disparity are the following:<sup id="cite_ref-:1_5-0" class="reference"><a href="#cite_note-:1-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup> </p> <ul><li>the level of transfer payments is subject to the fiscal capacities of the administering entity</li> <li>the size of transfer payments is generally dependent on the previous earnings of the beneficiary</li> <li>largest share of transfer payments is typically administered to the older age groups, which constitute to a smallest share of population of the lower income countries, regions or states</li></ul> <div class="mw-heading mw-heading2"><h2 id="Methods_of_payment">Methods of payment</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=2" title="Edit section: Methods of payment"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <div class="mw-heading mw-heading3"><h3 id="Cash">Cash</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=3" title="Edit section: Cash"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <style data-mw-deduplicate="TemplateStyles:r1236090951">.mw-parser-output .hatnote{font-style:italic}.mw-parser-output div.hatnote{padding-left:1.6em;margin-bottom:0.5em}.mw-parser-output .hatnote i{font-style:normal}.mw-parser-output .hatnote+link+.hatnote{margin-top:-0.5em}@media print{body.ns-0 .mw-parser-output .hatnote{display:none!important}}</style><div role="note" class="hatnote navigation-not-searchable">Main article: <a href="/wiki/Cash_transfer" title="Cash transfer">Cash transfer</a></div> <p>More than 100 million people worldwide receive a government transfer payment.<sup class="noprint Inline-Template Template-Fact" style="white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed"><span title="This claim needs references to reliable sources. (September 2021)">citation needed</span></a></i>]</sup> Examples of payments can be social aids to alleviate poverty or social insurance benefits by participating in social security systems. It is estimated that 90% of high-income nations make these payments via electronic transfer methods, whereas over half of the world's developing countries utilizes paper payments such as cash or checks.<sup class="noprint Inline-Template Template-Fact" style="white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed"><span title="This claim needs references to reliable sources. (September 2021)">citation needed</span></a></i>]</sup> Transfer payment via cash is the most popular method of transferring benefits to beneficiaries. However, cash transfer programs are constrained by three factors: financial resources, institutional capacity, and ideology, particularly in countries in the <a href="/wiki/Global_South" class="mw-redirect" title="Global South">Global South</a>.<sup id="cite_ref-6" class="reference"><a href="#cite_note-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> Many governments in poorer countries, where cash transfers could potentially have the most impressive impact, are often unwilling to implement such programmes due to fears of <a href="/wiki/Inflation" title="Inflation">inflation</a> and more importantly, <a href="/wiki/Dependency_theory" title="Dependency theory">dependency</a> on the transfers.<sup id="cite_ref-7" class="reference"><a href="#cite_note-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="In-kind_transfer">In-kind transfer</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=4" title="Edit section: In-kind transfer"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p><a href="/wiki/In-kind" class="mw-redirect" title="In-kind">In-kind</a> transfer payments consist of individual goods and services provided to households by governmental bodies and non-profit institutions serving households (NPISHs), which are either acquired on the market or produced as non-market output by governmental bodies or NPISHs.<sup id="cite_ref-8" class="reference"><a href="#cite_note-8"><span class="cite-bracket">[</span>8<span class="cite-bracket">]</span></a></sup> </p><p>The items included are: </p> <ul><li>Other social security benefits in kind (e.g. food stamps)</li> <li>Social assistance benefits in kind</li> <li>Transfers of individual non-market goods or services</li></ul> <div class="mw-heading mw-heading2"><h2 id="Social_security_benefit">Social security benefit</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=5" title="Edit section: Social security benefit"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Primarily, social security benefits are designed to provide income continuity to those persons who have retired from labour force because of either inability to work (physical disability or mental trauma), to find employment or due to old age (retirement). </p><p>These include, but are not limited to:<sup id="cite_ref-:1_5-1" class="reference"><a href="#cite_note-:1-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-9" class="reference"><a href="#cite_note-9"><span class="cite-bracket">[</span>9<span class="cite-bracket">]</span></a></sup> </p> <ul><li>Unemployment compensations</li> <li>Old age insurance</li> <li>Civil service pensions</li> <li>State and local government pensions</li> <li>Survivors benefits</li> <li>Supplemental Security Income</li></ul> <div class="mw-heading mw-heading2"><h2 id="By_country">By country</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=6" title="Edit section: By country"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <div class="mw-heading mw-heading3"><h3 id="Australia">Australia</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=7" title="Edit section: Australia"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>In Australia, the horizontal <a href="/wiki/Fiscal_imbalance_in_Australia" title="Fiscal imbalance in Australia">fiscal imbalance</a> arises because of the mismatch between the tax revenues and government expenses for the various state and territorial governments. This imbalance is addressed by a horizontal fiscal equalisation (HFE) policy overseen by the <a href="/wiki/Commonwealth_Grants_Commission" title="Commonwealth Grants Commission">Commonwealth Grants Commission</a>. </p> <div class="mw-heading mw-heading3"><h3 id="Canada">Canada</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=8" title="Edit section: Canada"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>In Canada, Federal-Provincial transfers usually refer to a system of payments from the federal government to the <a href="/wiki/Provinces_and_territories_of_Canada" title="Provinces and territories of Canada">provinces</a> as part of Canada's "fiscal federalism" through explicit and implicit redistribution.<sup id="cite_ref-ucalgary_Tombe_2018_10-0" class="reference"><a href="#cite_note-ucalgary_Tombe_2018-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> These transfers are intended to assist provinces with less fiscal capacity than others in providing comparable public services in all regions, including health and education.<sup id="cite_ref-ucalgary_Tombe_2018_10-1" class="reference"><a href="#cite_note-ucalgary_Tombe_2018-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> Transfers include explicit programs such as <a href="/wiki/Equalization_payments" title="Equalization payments">equalization payments</a>, <a href="/wiki/Canada_Health_Transfer" title="Canada Health Transfer">Canada Health Transfer</a> (CHT) and the <a href="/wiki/Canada_Social_Transfer" title="Canada Social Transfer">Canada Social Transfer</a> (CST) (formerly the <a href="/wiki/Canada_Health_and_Social_Transfer" title="Canada Health and Social Transfer">Canada Health and Social Transfer</a>) and <a href="/wiki/Territorial_Formula_Financing" title="Territorial Formula Financing">Territorial Formula Financing</a>. There are also implicit transfers that result from federal taxation and spending decisions and policies.<sup id="cite_ref-ucalgary_Tombe_2018_10-2" class="reference"><a href="#cite_note-ucalgary_Tombe_2018-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> </p><p>Canada's transfer payments originated in the <a href="/wiki/British_North_America_Act_(1867)" class="mw-redirect" title="British North America Act (1867)">British North America Act (1867)</a>'s Sections 118 as provincial subsidies.<sup id="cite_ref-ucalgary_Tombe_2018_10-3" class="reference"><a href="#cite_note-ucalgary_Tombe_2018-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> By 1907, these payments were altered as new provinces joined the Dominion.<sup id="cite_ref-ucalgary_Tombe_2018_10-4" class="reference"><a href="#cite_note-ucalgary_Tombe_2018-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> In a 1957 arrangement, poorer provinces received annual payments: Prince Edward Island received $2.5 million and the three provinces, Newfoundland, Nova Scotia, and New Brunswick each received $7.5 million.<sup id="cite_ref-ucalgary_Tombe_2018_10-5" class="reference"><a href="#cite_note-ucalgary_Tombe_2018-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> These payments ended and were rolled into the 1967 equalization program intended to "enable each province to provide an adequate level of public services without resort to rates of taxation substantially higher than those of other provinces."<sup id="cite_ref-ucalgary_Tombe_2018_10-6" class="reference"><a href="#cite_note-ucalgary_Tombe_2018-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> </p><p>In Canada, transfers payments are contentious and equalization formulas are often revised.<sup id="cite_ref-ucalgary_Tombe_2018_10-7" class="reference"><a href="#cite_note-ucalgary_Tombe_2018-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> Implicit transfers through federal taxation, for example, are greater in higher income provinces such as British Columbia, Alberta, Saskatchewan, and Ontario and lower in provinces such as Manitoba, Quebec, and the Atlantic provinces. Canada measures average fiscal capacity of each province which varies widely. Alberta is the highest at $12,577 per person and PEI is the lowest at $6,013 per person. In 2016 federal income tax in Alberta was more than $8,000 compared to less than $3,000 in PEI. All provinces pay the same federal tax rates.<sup id="cite_ref-ucalgary_Tombe_2018_10-8" class="reference"><a href="#cite_note-ucalgary_Tombe_2018-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> </p><p>Economist Trevor Tombe wrote that by 2018, transfer payments had become "complex arrangements" that are much larger than the original subsidies and are "more equally distributed".<sup id="cite_ref-ucalgary_Tombe_2018_10-9" class="reference"><a href="#cite_note-ucalgary_Tombe_2018-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> By 2018, inter-provincial redistribution has decreased to less than 2% of Canada's GDP, its lowest in 60 years. In the early 1980s it was 3.5%.<sup id="cite_ref-ucalgary_Tombe_2018_10-10" class="reference"><a href="#cite_note-ucalgary_Tombe_2018-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="China">China</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=9" title="Edit section: China"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Since July 2011, existing regional and local social security schemes, including pooling arrangements, are gradually being unified under the country's first national law on social transfer payments. The government aims to establish a comprehensive, equitable, and unified pension system that covers both urban and rural residents by 2020. In 2016, the government decided to establish a unified health insurance system for both rural and non-salaried urban residents. The government has also announced that medical insurance and maternity insurance programs will be merged.<sup id="cite_ref-11" class="reference"><a href="#cite_note-11"><span class="cite-bracket">[</span>11<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="India">India</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=10" title="Edit section: India"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>India has four types of social transfer payments – old age and disability benefits, sickness and maternity benefits, work injury transfers, and unemployment benefits. Most sources of payments are employers (via <a href="/wiki/Provident_fund" title="Provident fund">provident funds</a>), and the government.<sup id="cite_ref-12" class="reference"><a href="#cite_note-12"><span class="cite-bracket">[</span>12<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="United_States">United States</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=11" title="Edit section: United States"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>The U.S. still utilizes paper transfer payments in its Social Security administration as many recipients, particularly those in lower-income categories, are unbanked, i.e. do not have a bank account to facilitate direct deposits. However, the U.S. has been able to implement electronic transfer systems in its food stamps and education assistance programs.<sup id="cite_ref-:0_13-0" class="reference"><a href="#cite_note-:0-13"><span class="cite-bracket">[</span>13<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="See_also">See also</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=12" title="Edit section: See also"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <ul><li><a href="/wiki/Barnett_formula" title="Barnett formula">Barnett formula</a></li> <li><a href="/wiki/Government_budget" title="Government budget">Government budget</a></li> <li><a href="/wiki/Public_finance" title="Public finance">Public finance</a></li> <li><a href="/wiki/Transfer_payments_multiplier" title="Transfer payments multiplier">Transfer payments multiplier</a></li> <li><a href="/wiki/Welfare_state" title="Welfare state">Welfare state</a></li> <li><a href="/wiki/Workfare" title="Workfare">Workfare</a></li></ul> <div class="mw-heading mw-heading2"><h2 id="References">References</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=13" title="Edit section: References"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <style data-mw-deduplicate="TemplateStyles:r1239543626">.mw-parser-output .reflist{margin-bottom:0.5em;list-style-type:decimal}@media screen{.mw-parser-output .reflist{font-size:90%}}.mw-parser-output .reflist .references{font-size:100%;margin-bottom:0;list-style-type:inherit}.mw-parser-output .reflist-columns-2{column-width:30em}.mw-parser-output .reflist-columns-3{column-width:25em}.mw-parser-output .reflist-columns{margin-top:0.3em}.mw-parser-output .reflist-columns ol{margin-top:0}.mw-parser-output .reflist-columns li{page-break-inside:avoid;break-inside:avoid-column}.mw-parser-output .reflist-upper-alpha{list-style-type:upper-alpha}.mw-parser-output .reflist-upper-roman{list-style-type:upper-roman}.mw-parser-output .reflist-lower-alpha{list-style-type:lower-alpha}.mw-parser-output .reflist-lower-greek{list-style-type:lower-greek}.mw-parser-output .reflist-lower-roman{list-style-type:lower-roman}</style><div class="reflist reflist-columns references-column-width" style="column-width: 30em;"> <ol class="references"> <li id="cite_note-1"><span class="mw-cite-backlink"><b><a href="#cite_ref-1">^</a></b></span> <span class="reference-text"><style data-mw-deduplicate="TemplateStyles:r1238218222">.mw-parser-output cite.citation{font-style:inherit;word-wrap:break-word}.mw-parser-output .citation q{quotes:"\"""\"""'""'"}.mw-parser-output .citation:target{background-color:rgba(0,127,255,0.133)}.mw-parser-output .id-lock-free.id-lock-free a{background:url("//upload.wikimedia.org/wikipedia/commons/6/65/Lock-green.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-limited.id-lock-limited a,.mw-parser-output .id-lock-registration.id-lock-registration a{background:url("//upload.wikimedia.org/wikipedia/commons/d/d6/Lock-gray-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-subscription.id-lock-subscription a{background:url("//upload.wikimedia.org/wikipedia/commons/a/aa/Lock-red-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .cs1-ws-icon a{background:url("//upload.wikimedia.org/wikipedia/commons/4/4c/Wikisource-logo.svg")right 0.1em center/12px no-repeat}body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-free a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-limited a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-registration a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-subscription a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .cs1-ws-icon a{background-size:contain;padding:0 1em 0 0}.mw-parser-output .cs1-code{color:inherit;background:inherit;border:none;padding:inherit}.mw-parser-output .cs1-hidden-error{display:none;color:var(--color-error,#d33)}.mw-parser-output .cs1-visible-error{color:var(--color-error,#d33)}.mw-parser-output .cs1-maint{display:none;color:#085;margin-left:0.3em}.mw-parser-output .cs1-kern-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right{padding-right:0.2em}.mw-parser-output .citation .mw-selflink{font-weight:inherit}@media screen{.mw-parser-output .cs1-format{font-size:95%}html.skin-theme-clientpref-night .mw-parser-output .cs1-maint{color:#18911f}}@media screen and (prefers-color-scheme:dark){html.skin-theme-clientpref-os .mw-parser-output .cs1-maint{color:#18911f}}</style><cite id="CITEREFBishop2012" class="citation web cs1">Bishop, Matthew (2012). <a rel="nofollow" class="external text" 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class="Z3988"></span></span> </li> </ol></div> <div class="mw-heading mw-heading2"><h2 id="External_links">External links</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Transfer_payment&action=edit&section=14" title="Edit section: External links"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <ul><li><a rel="nofollow" class="external text" href="https://www.fin.gc.ca/access/fedprov-eng.asp">Department of Finance (Canada): Federal Transfers to Provinces and Territories</a></li></ul> <div class="navbox-styles"><style data-mw-deduplicate="TemplateStyles:r1129693374">.mw-parser-output .hlist dl,.mw-parser-output .hlist ol,.mw-parser-output .hlist ul{margin:0;padding:0}.mw-parser-output .hlist dd,.mw-parser-output .hlist dt,.mw-parser-output .hlist li{margin:0;display:inline}.mw-parser-output .hlist.inline,.mw-parser-output .hlist.inline dl,.mw-parser-output .hlist.inline ol,.mw-parser-output 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