Glossary:Means-tested and Non means-tested benefits
Social benefits are broken down between means-tested and non means-tested benefits. Means-tested social benefits are social benefits which are explicitly or implicitly conditional on the beneficiary's income and/or wealth falling below a specified level. Usually, this level is determined taking into account the beneficiary's family composition.
Income/wealth is usually used to determine (1) only entitlement or (2) both entitlement and amount. The latter case refers to a benefit that is degressively linked to income/wealth and reduced to zero as income rises, the point at which the amount tapers to zero being the level of income/wealth at which there is no entitlement. According to the ESSPROS classification, benefits where income/wealth is used to determine only the amount of benefit received (i.e. degressively linked to income/wealth but only to a certain minimum level so that there is always some entitlement) are not considered to be means-tested.
Implicit conditionality in the case of means-tested benefits refers to rules that do not directly reference a beneficiary’s income/wealth but either reference situations that imply previous testing of income/wealth (e.g. the benefit is only available to persons already in receipt of another means-tested benefit such as income support) or reference characteristics of the individual that may be considered a proxy for income/wealth (e.g. homelessness or refugee status).