Means test

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The term means test refers to an investigative process undertaken to determine whether or not an individual or family is eligible to receive certain types of benefits from the government. The "test" can consist of quantifying the party's income, or assets, or a combination of both.

During the Great Depression, the test was used to screen applicants for such programs as Home Relief in the United States, and starting in the 1960s, for benefits such as those provided by the Food Stamp Program.

In 1992, third-party Presidential candidate Ross Perot proposed that future Social Security benefits be subjected to a means test; though this was hailed by some as a potential solution to an impending crisis in funding the program, few other political candidates since Perot have publicly made the same suggestion, which would require costly investigations and might associate accepting those benefits with social stigma.

In 2005, the United States substantially changed its bankruptcy laws, adding a means test to prevent wealthy debtors from filing for Chapter 7 Bankruptcy. The bankruptcy means test is rather complex but quite generous and most debtors have no trouble meeting its requirements. Consumers can use a means test calculator to determine their eligibility.

Examples of means testing in the healthcare sector include Medicaid (USA), Medifund (Singapore) and Medical Cards (Ireland) ^[1].