what is are transfer payments ?
Hello Rhythm,
A transfer payment is a one-way payment to a person or organization which has given or exchanged no goods or services for it.
- A transfer payment is a payment of money for which there are no goods or services exchanged.
- Transfer payments commonly refer to efforts by local, state, and federal governments to redistribute money to those in need.
- In the U.S., Social Security and unemployment insurance are common types of transfer payments.
- Corporate bailouts and subsidies are not commonly referred to as transfer payments.
A transfer payment (also known as a government transfer or simply transfer) is a redistribution of income and wealth by means of the government making a payment, without goods or services being received in return. These payments are considered to be non-exhaustive because they do not directly absorb resources or create output e.g. welfare, financial aid, social security, and government subsidies for certain businesses.
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 companies or governmental bodies.
Government transfer payments do not boost production or economic activity. Transfer payments are often introduced or expanded during severe economic recessions.
India has four types of social transfer payments –
- old age and disability benefits
- sickness and maternity benefits
- work injury transfers
- unemployment benefits
Most sources of payments are employers (via provident funds), and the government.
Hope this information proves helpful to you. Feel free to ask more quesions.
Have a great day!!
Hello aspirant,
Transfer payments are the payments made or the received income in which no services or goods that are being paid for as a payment of benefit or subsidy. Examples of these type of payments are welfare, social security, financial help and government subsidies for specific trade and commerce.
Hope, it helps you.
Hey there,
I hope you are safe and healthy.
A transfer payment is a one-way payment to a person or organization which has given or exchanged no goods or services for it. This contrasts with a simple "payment," which in economics refers to a transfer of money in exchange for a product or service.
It is a sort of one way payment. Profit, rent, transportation and freight charges are all two way payments and are made in return for something whereas retirement pension is a one way payment. For example, retirement pension is an example of a transfer payment.
I hope it helps.
