This generates a paradox: more targeted social welfare development results in more stringent rules and, hence, lower take-up, which likely disproportionally affects the most financially vulnerable. It is well-established that more complex systems with more eligibility criteria go hand-in-hand with a smaller fraction of the eligible population participating (Van Oorschot, 1991). Promotors of welfare participation include knowledge of program criteria, perceived eligibility, and perceived utility (Craig, 1991 Kerr, 1982 Van Oorschot, 1994). Theoretical and quantitative studies have identified numerous potential inhibitors for welfare participation, including welfare stigma (Handler & Hollingsworth, 1969 Moffit, 1983 Odum, 1923), transaction costs, learning costs, psychological costs (Currie, 2019 Moffit, 1992 Mood, 2004), administrative burden, fear of reclaims, and lack of social support (Bertrand et al., 2000 Christensen et al., 2020 Garthwaite, 2014 Mood, 2004 Rege et al., 2012). For individual households, not participating in welfare lowers their wellbeing and may exacerbate poverty (Vrooman & Asselberghs, 1994). This means that welfare systems do not achieve their goals, which may undermine their legitimacy (Odum, 1923) and increase inequality (Hernanz et al., 2004). Non-take-up rates vary between countries and programs, but 30%–40% rates are not exceptional (Dubois & Ludwinek, 2015 Hernanz et al., 2004 Plueger, 2009). Yet, many eligible households do not participate in the welfare programs.

Welfare systems aim to decrease financial distress by providing income security for the population after adverse events such as illness, unemployment, retirement, and death (Dubois & Ludwinek, 2015). Research shows that being relatively poor is linked with feelings of uncertainty, stress and shame (Sen, 1983 Underlid, 2007 Van Dijk et al., 2022). Relative poverty has profound implications on mental and physical health (Adler & Snibbe, 2003 Ridley et al., 2020). Her story was illustrative of our conversations with financially vulnerable households for the current study. She explained why she no longer used any benefits, despite being eligible. During the interview, she cheered up when she told us that she had recently received a fixed contract, providing her with a stable income. This excerpt is from our interview with a single mother on the weekly street market in a deprived neighbourhood in The Hague, the Netherlands. We discuss policies that could decrease the perceived uncertainty of benefits receipt and give directions for future research.

Formal and informal help promoted welfare participation, but many participants lacked access to both. Whereas the experience of shame and stigma were substantial inhibitors for claiming local welfare benefits, they were not for participating in national welfare programs. The fear of reclaims and mistrust of government institutions were the main inhibitors to participating in welfare programs. For many interviewed households, money was a source of stress. We examined the role of money in their lives, what inhibited them from taking up social welfare, and how they sought support. We present the results of in-depth interviews with 31 members of financially vulnerable households in two large Dutch cities about their experiences with welfare. Many eligible households, however, do not take up social welfare. Social welfare aims to support financially vulnerable households by protecting them from financial shocks and providing them with a basic standard of living.

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