This chapter examines the transformative impact of artificial intelligence and algorithmic systems on the welfare state from a critical social policy perspective. Traditional social security systems, which are based on the industrial society's wage labor model, are entering a structural crisis in the face of jobless growth generated by automation and the platform economy. The study argues that the transition to the "digital welfare state" dismantles street-level bureaucracy, delegating decision-making authority to opaque algorithmic black boxes. Particularly in social assistance processes, reducing eligibility determination to mere quantitative scoring formulas excludes face-to-face interviewing, professional discretion, and human judgment—the core of social work—thereby constructing "digital poorhouses" that criminalize poverty. The punitive effects of algorithmic bias and digital surveillance mechanisms on disadvantaged groups are problematized through the practice of centralized data systems (e.g., Integrated Social Assistance Information System - BSYBS). In conclusion, emphasizing that technology is not a deterministic fate, the study advocates that new protective shields such as Universal Basic Income (UBI) against rising precarity, and a "human-in-the-loop" approach centering professional ethics against algorithmic domination, are urgent social policy necessities.