Federal poverty threshold: definition, recent statistics and what dose it mean?

The federal poverty threshold is a measure of poverty in the United States. The US Census Bureau uses it to report how many Americans live in poverty each year. The threshold for poverty is used for statistical purposes. It is not sure about eligibility for poverty reduction programs, such as affordable health care bills, medicaid or benefits. The government outlines eligibility for federal poverty levels.

Federal agencies use this threshold to measure and report poverty. The Office of Management and Budget uses it as the official definition of federal poverty. The Ministry of Health and Human Services calculates according to federal poverty levels.

Definition of poverty

However, the Census Bureau’s definition of poverty is somewhat complicated. First, it is based on pre-tax income. This includes income, pensions or retirement income. It also includes interest, dividends, rent, royalties, and income from real estate and trusts. Does not include capital gains or losses.

The council includes education assistance, alimony, child support, extra-hospital assistance and various other sources. It does not calculate tax credits. It includes cash benefits such as unemployment compensation, worker compensation, veterans’ benefits and survivor benefits. It calculates social security, supplementary security income and public assistance. It does not include non-cash benefits such as food stamps or housing subsidies. It calculates the income of family members. Does not include income from roommates or other non-relatives. Consider whether the head of the household is over 65 or under 65. It also considers the number of adults and children. 

The threshold of poverty is a proposition of “either all or nothing”. If the total household income is below the threshold, everyone in the family is poor. If the income is above the threshold, then the census will not count anyone in the family as poor. Although the cost of living varies greatly from state to state, the threshold for poverty does not vary from state to state. Every year, the poverty threshold is adjusted according to the inflation situation using the consumer price index.

Recent statistics

According to the US Census, the official poverty rate in 2017 was 12.3%. This is down from 15.1% in 2010 and is the highest level since the recession. The record for 1959 was 22.4%. After President Lyndon Johnson’s poverty alleviation plan, the level of poverty dropped significantly.

In 2017, 39.7 million Americans lived in poverty. This is lower than the 46.7 million in 2014, which is the highest figure in American history. More than half or 56% of the people are women. Two-thirds or 67% are white. 42% live in the south, 23% live in the west, and 19% live in the Midwest. 83% were born in the United States and only 11% are not citizens. Even those who have jobs do not get rid of the protection of poverty. 6% of the poor are full-time and work all year round. 14% of people are part-time all year round. Another 35% of people work only part of the year.

Unfortunately, 32% of the poor are children. This is 12.8 million children under the age of 18. Another 12% (4.7 million people) are 65 years of age or older. 9% of people have a disability. Despite the success of the anti-poverty war, not many of these low-income earners have received benefits. TANF is an interim assistance program for poor families. In December 2017, the service population was 3.3 million. This is less than 10% of the poor. Among them, it serves 2.5 million children. Less than 20% of children need it.