Is one allowed to take welfare from the state government? I've heard that it causes kitrugim on klal yisroel, like the story in kiddushin with buying the poroh adumah from the Romans.
Our guide is what Maimonides said [Rambam, Matnot Aniyim 8:9]:
It is forbidden for a Jew to receive charity from a gentile in public. If he is unable to subsist on the charity given by the Jews and it is impossible to receive charity from the gentiles in private, it is permitted. When a gentile king or official sends money to the Jews for charity, we do not return it to him so as [not to jeopardize] peaceful relations with the king. Instead, we take [the charity] from him and give it to the gentile poor in secret so that the king will not hear.
So, yes, exceptions are allowed. But we don't want to take away a Jew's opportunity to perform the mitzvah of tzedakah.