Bernard Shaw played with the idea of the deserving and undeserving poor in Pygmalion, written over 100 years ago.
Pygmalion, more familiar as My Fair Lady, tells the story of a young flower seller, Eliza Doolittle, who is transformed by the linguist, Henry Higgins, into a "lady."
Her no-good wastrel father, Mr. Doolittle, objects to Henry Higgins' adoption of his daughter, and demands appropriate compensation. Higgins, and his friend Pickering, are shocked, "Do you mean to say, you callous rascal, that you would sell your daughter for 50 pounds?...Have you no morals, man?" "Can't afford them, Governor," Doolittle replies, "Neither could you if you was as poor as me."
Doolittle then goes on to lament the plight of the undeserving poor:
What am I...I ask you, what am I? I'm one of the undeserving poor: that's what I am. Think of what that means to a man. It means that he's up agen middle class morality all the time. If there's anything going, and I put in for a bit of it, it's always the same story: "You're undeserving; so you can't have it." But my needs is as great as the most deserving widow's that ever got money out of six different charities in one week for the death of the same husband. I don't need less than a deserving man: I need more. I don't eat less hearty than him; and I drink a lot more. I want a bit of amusement, cause I'm a thinking man. I want cheerfulness and a song and a band when I feel low. Well, they charge me just the same for everything as they charge the deserving. What is middle class morality? Just an excuse for never giving me anything. Therefore, I ask you, as two gentlemen, not to play that game on me. I'm playing straight with you. I ain't pretending to be deserving. I'm undeserving; and I mean to go on being undeserving. I like it; and that's the truth. Will you take advantage of a man's nature to do him out of the price of his own daughter what he's brought up and fed and clothed by the sweat of his brow until she's growed big enough to be interesting to you two gentlemen? Is five pounds unreasonable? I put it to you; and I leave it to you.
Incentives versus needs - there are no easy answers.