The most basic form of a subsidy, and the one that still defines a subsidy in some dictionaries, is a cash payment or grant. Although few grants are paid out in currency any more (most are paid via cheque or bank transfer), it is still common to refer to them as "cash" grants, payments or subsidies.
Normally, a grant refers to a time-limited payment, either in connection with a specific investment, or to enable an individual, company or organization to cover some or all of its general costs, or costs of undertaking a specific activity, such as research.
Other direct payments may be linked to the volume of production or sales. In previous centuries, and still in Australia, these types of subsidies were called bounties. They are far from archaic, however. In some states of the United States, for example, companies producing liquid biofuels receive direct subsidies for every gallon of ethanol they produce.
Cash payments to producers are also sometimes linked to prices. The main form is a deficiency payment, which makes up the difference between a target price for a good (typically an agricultural commodity) and the actual price received in the market.
Various cash subsidies are paid to workers. Canada, for example, provides targeted wage subsidies to assist individuals to prepare for, obtain and maintain employment. Many countries provide grants in order to encourage people who are out of work to undergo training in new skills, or to relocate.
Consumers also benefit from direct payments or vouchers, particularly for the purchase of necessities, like food, medicine or heating fuels. Alternatively, a government may regulate the consumer price for a good or service, and instead pay a subsidy to the supplier of that good or service, to cover its losses.
