A well-defined territorial boundary is essential for the design and implementation of social policies, as it defines the scope of the political community. In states where territorial boundaries are contested, the contours of sovereignty remains ambiguous. This paper studies the effects of contested perceptions of territory on welfare states. The paper distinguishes between institutional solidarity (support for formal welfare arrangements) and intergenerational social solidarity (willingness to help the other generation at a personal cost) and argues that territorial state identity independently influences both, aside from national identities and nationalism. Employing Taiwan’s social security reform as the case, and using observational data derived from the 2019 nationally representative Taiwan Image Survey alongside data from an original survey administered in Taiwan in 2023, the article demonstrates that territorial state identity enhances support for both institutional solidarity and intergenerational social solidarity. This effect persists even when controlling for nationalism. This research underscores the importance of recognising territorial boundaries consistent with the welfare apparatus for the sustainability of welfare states.