Who May Receive Charity?
It is understood from the following teaching that a Jew should pursue every avenue to avoid taking charity. Rabbi Akiva said, “Treat your Sabbath like a weekday (not buying special food and drink) rather than be dependent on man (taking charity) (Shabbat 118a; Pes. 112a). Jews should accept any available work, even if they think it beneath their dignity, rather than take communal funds.
And yet, refusing to take charity when it is necessary is a sin and a person should not feel embarrassed when they are not able to support themselves otherwise.
These guidelines were created for two reasons. To ensure that only those truly in need would accept communal funds. In doing so, Jews would more likely to keep donating. And, for those who do need assistance, it helped to remove stigma or embarrassment.
— Rabbi David Woznica