A means-tested benefit is a form of government financial support provided only to individuals or households whose income, savings, or assets are below a specific legally defined threshold.

Key characteristics include:

• It directs resources specifically to those who are in the greatest financial need.
• It often involves high administrative costs to verify eligibility.
• It can create poverty traps, where earning extra money leads to a loss of benefits.
• It may discourage personal saving, as individuals worry that higher savings will disqualify them from receiving support.