Transfer payments in economics refer to unilateral transfers of money from the government to individuals or households, often targeting those with low incomes, without any corresponding exchange of goods or services.

• Unemployment benefits: Payments to individuals who have lost their jobs, providing temporary income support.
• Food stamps (or SNAP in the US): Vouchers or electronic benefits to help low-income families purchase nutritious food.
• Cash transfers to low-income families: Direct monetary aid to supplement household earnings and cover basic needs.

These payments act as a key mechanism for income redistribution, offering essential support to those unable to earn adequate income through work. By doing so, transfer payments help mitigate poverty, reduce income inequality, and stabilize the economy during downturns.