Asset-Based Welfare

Abstract

Rising welfare costs and ageing societies are placing considerable pressures on traditional welfare states that focus on income support. In response to these pressures, asset-based welfare has been proposed as a means of reducing wealth inequalities and encouraging wealth-generating behaviours among citizens. Asset-based welfare policies involve the extension of asset holding among poorer households as a means of promoting wealth accumulation and thus allowing households to meet their own welfare needs. Governments, that have for long supported the expansion of homeownership, are now viewing the tenure as an important component of asset-based welfare policies. The prospect of encouraging homeowners to release housing equity to fund their welfare needs or health costs is particularly attractive to governments. Developing upon the increasing fungibility of housing as an asset, rising housing equity withdrawal, and changes in mortgage markets, homeownership is viewed as potentially a major component of asset-based welfare policies. This article examines the ideas underpinning asset-based welfare and outlines how homeownership is being aligned with these policies. It is argued that the differentiated and evolving character of national housing markets makes homeownership a problematic ‘core’ component of any welfare system.