Transfer Payment

Published: | Updated: October 8, 2017

Definition - What does Transfer Payment mean?

A transfer payment is a payment from one party to another. It is distinguished from other types of payments in that it does not require the receiving party to trade anything of value in exchange for the payment. Most other types of payments require such trades in one form or another.

Insuranceopedia explains Transfer Payment

Transfer payments are typically made by governments to carry out social welfare programs such as grants, unemployment compensation and disability pensions. Different countries have different ways of making transfer payments, and different programs for which they are made. For example, in Canada, the federal government makes transfer payments to the provinces who then run the social benefit programs. In the United States, the federal government makes transfer payments directly to individual citizens through programs such as welfare.

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