It has been established in the general population that there is a relationship between welfare status and psychological well-being. There are few studies, however, which investigate the effects of welfare dependency on Southeast Asian refugees, a population that is highly dependent on welfare. This study examined the relationship between welfare status and psychological well-being among Vietnamese, Cambodian, Laotian, and Hmong refugees. The study compared three welfare groups: those who have never been on welfare, those who were once dependent on welfare and are no longer on welfare, and those who are still welfare-dependent. The results supported three hypotheses: a) a high percentage of all four refugee groups were still dependent on welfare even after being in the United States for an average of 5 to 6 years, b) a significant relationship was found between welfare dependency and psychological distress, and c) dependence on welfare had long-term effects for all four groups. An interesting finding that emerged for the Vietnamese, Cambodians, and Laotians was that individuals who were once on welfare but who are no longer receiving welfare benefits are at similar risk as their counterparts who are currently on welfare of developing psychological distress. The findings therefore showed that for this population, if individuals had been touched by welfare at any period in their lives, they were at risk of developing psychological distress. There was an unexpected different finding for the Hmong; individuals who were no longer on welfare were more at risk than those who continued to receive or never had received welfare. Reasons for the intergroup differences and why refugees tended to stay on welfare longer than the general population were explored, along with a discussion about the implications of the findings for refugee policy.