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In the paper, the philosophical and historical evolution of social transfers and their role in Latvia's social security system have been investigated. Definitions of social transfers have been studied, and a classification of social transfers has been made. The most suitable social security system, which, to a great extent, depends on social policies and a socio-economic situation in a country, is elaborated in every country. Latvia's social security system includes state social insurance, state social benefits, social services, and social assistance that are based on financing from both the state basic budget and the state special budget, and municipal budgets. Social transfers have a significant role in the social security system in order to provide protection for the population in social risk situations; they impact the welfare of the population during this period.

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