Every particular contemporary and industrialized democratic community in the world has a welfare ideas of some sort, and it's an idea that goes back a long way in history. It finds it roots in Judeo-Christian literature, wherein the poor are entitled to charity as a matter of right rather than benevolence. It was an ever present facet of the old Greco-Roman democracies as well.
Basically the idea is this: all citizens pay taxes of varied types. You pay revenue tax based on your salary, you pay sales tax whenever you buy a stock or service, you pay estate tax on your inheritance, you pay excise taxes on things like tobacco and gasoline, and you pay capital-gains tax on the money you make on investments. All this money goes to the government to pay for all the obligations they have to the populace; all the services the provide such as schooling and, inevitably, welfare.
In the United States, welfare has had an uncertain past. Before the 1990's, states received federal money for welfare based on the amount of people in the welfare system. So, states would effectively lose money whenever person left the ideas (by, for example, getting a good job). This meant that there was sort of a conflict of interest at play, and it meant that there wasn't very much incentive for states to try and get their residents out of the system.
Bill Clinton changed all that when he gave the ideas an overhaul. He decided that all states should be given a set amount for welfare based on their total population. This meant that suddenly, states would make money when person found a job, and therefore they had the incentive they needed to positively help people out. This has since been hailed as one of the most foremost bi-partisan achievements in American politics in the last 30 years.
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