Scandinavia represents a particular type of welfare state, characterized by institutionalized social rights, universal access, generous benefits, a high degree of public involvement and comparatively high levels of redistribution. Income security has been a fundamental pillar in this context, in the form of both social assistance and social insurance. The essentially tax-based system, which was designed to constitute a basic safety net for all citizens from cradle to grave, has been remarkably generous – and thereby also costly. It is thus vulnerable in relation to newcomers who cannot support themselves economically. Throughout Scandinavia, the welfare state initially served as the self-evident instrument for incorporating newcomers. Gradually, however, it has become controversial, in parallel with general processes of social reform, in which the restructuring of policies has been regarded as necessary in order to avoid creating dependency traps and ‘overconsumption’. This chapter spells out the historical background for the specific Scandinavian approach to immigration and discusses the current dilemmas attached to this normatively complicated policy field.