> For the first part, that will always be necessary.
There's no reason it has to be.
> The people are supposed to decide through indirect democracy who is qualified to receive welfare.
There's no reason the people couldn't decide, through democracy (direct or indirect, as is their pleasure; certain existing governments only embrace one, but the people can always change that, too) that the answer is "everybody gets the public service/benefit; and the payment comes through the tax system" and have one tax bureaucracy instead of a tax bureaucracy and a separate eligibility verification bureaucracy for each program.