Transfer payment

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In political science and economics, a transfer payment is a payment of money from a government to an individual for which no good or service is required in return. In economics, government transfer payments can be considered a negative tax, since in the case of a tax, people pay the government without getting any good or service in direct exchange.

Examples of transfer payments include welfare, unemployment insurance, social security payments publicly-funded pensions and public support for students, including scholarships and financial aid.

[edit] Alternative use for administrative transfer

In some federal systems the term is also used to refer to payments from one order of government to another; for example in Canada, transfer payments usually refer to a system of payments from the federal government to the provinces. Major Canadian transfer payments include equalization payments, the Canada Health Transfer and the Canada Social Transfer (formerly the Canada Health and Social Transfer) and Territorial Formula Financing.