Poverty Status

People talk about “the poverty threshold,” but it is not one single dollar amount.  Following the Office of Management and Budget's (OMB) Statistical Policy Directive 14, the Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who is in poverty.  These poverty thresholds are the dollar amounts used to determine poverty status.

If a family’s total income is less than the threshold, then that family and every individual in it is considered in poverty. 

The official poverty thresholds do not vary geographically. That is, the same thresholds are used throughout the United States.  There is no accounting for some parts of the country being more expensive to live in than other parts.

Thresholds do vary according to size of the family and ages of the members.  A family with nine members can have more money and still be in poverty than a family of four.  A family of two whose householder is older than 65 has a different poverty threshold from a family of two whose householder is age 25.

Poverty thresholds are updated for inflation every year using the Consumer Price Index (CPI-U).

The Census Bureau’s poverty definition uses money income before taxes.  It does not include things that are not money, such as

• public housing,
• Medicaid,
• food stamps, or
• other noncash benefits such as capital gains.

Money income includes

• earnings,
• unemployment compensation,
• workers’ compensation,
• Social Security,
• Supplemental Security Income,
• public assistance,
• veterans’ payments,
• survivor benefits,
• pension or retirement income,
• interest,
• dividends,
• rents,
• royalties,
• income from estates, trusts,
• educational assistance,
• alimony,
• child support,
• assistance from outside the household, and
• other miscellaneous sources.

Although the thresholds in some sense reflect families’ needs, they are intended as a statistical yardstick, not as a complete description of what people and families need to live. 

Many government aid programs use a different poverty measure, such as the Department of Health and Human Services (HHS) poverty guidelines.