Measuring Poverty

Background

PovertyThe federal government defines “poverty” as income below specific thresholds. These thresholds are adjusted annually for inflation and vary according to family size and the age of the head of the family. is defined by comparing household income with the minimum income required for basic needs. People whose income is below the threshold are considered poor. These metrics are used as a measurement of economic well-being. They are also used to determine eligibility and benefit levels for some government programs and as the basis for distributing resources across states.

The official federal povertyThe federal government defines “poverty” as income below specific thresholds. These thresholds are adjusted annually for inflation and vary according to family size and the age of the head of the family. measure was created in the early 1960s. The Census Bureau still uses this calculation, adjusted for price inflation. The Department of Health and Human Services PovertyThe federal government defines “poverty” as income below specific thresholds. These thresholds are adjusted annually for inflation and vary according to family size and the age of the head of the family. Guideline uses a second, related measure for administrative purposes.

The official povertyThe federal government defines “poverty” as income below specific thresholds. These thresholds are adjusted annually for inflation and vary according to family size and the age of the head of the family. measure has significant limitations. The method for determining it is outdated. It is based on spending patterns from the 1960s. And it fails to account for tax credits and in-kind benefits provided through current government programs (such as housing subsidies and food assistance). The measure also fails to consider changes in medical care, housing, and child-care expenses. These expenses have become a larger share of family budgets and have risen at a rate outpacing inflation. Furthermore, the current povertyThe federal government defines “poverty” as income below specific thresholds. These thresholds are adjusted annually for inflation and vary according to family size and the age of the head of the family. measure for those age 65 and older is lower than the threshold for the rest of the population. This inaccurately assumes that spending on basic needs decreases with age.

As a result, the Census Bureau now produces the Supplemental Poverty MeasureA method for measuring poverty that more accurately reflects the spending patterns of people 65 and older.PovertyThe federal government defines “poverty” as income below specific thresholds. These thresholds are adjusted annually for inflation and vary according to family size and the age of the head of the family. Measure. The povertyThe federal government defines “poverty” as income below specific thresholds. These thresholds are adjusted annually for inflation and vary according to family size and the age of the head of the family. rate for Americans age 65 and older is 40 percent higher using this measure (12.8 percent in 2019 using the supplemental measure vs. 8.9 percent using the official measure). This is mainly because the supplemental measure accounts for out-of-pocket medical spending. Medical costs are a sizeable burden for older adults with low incomes.

Currently, the full benefits of the supplemental measure have not been realized. No government programs use it to determine eligibility for any program. And the public has limited access to data based on the measure.

MEASURING POVERTY: Policy

MEASURING POVERTY: Policy

Poverty threshold

Congress should mandate the use of the Supplemental Poverty MeasureA method for measuring poverty that more accurately reflects the spending patterns of people 65 and older. (SPM) developed by the Census Bureau in lieu of the existing federal poverty measure. In addition, Congress should adopt the new poverty measure in defining eligibility for assisPovertyThe federal government defines “poverty” as income below specific thresholds. These thresholds are adjusted annually for inflation and vary according to family size and the age of the head of the family. Measure (SPMThe Supplemental Poverty Measure (SPM) is a method for measuring poverty that more accurately reflects the spending patterns of people 65 and older.) developed by the Census Bureau in lieu of the existing federal povertyThe federal government defines “poverty” as income below specific thresholds. These thresholds are adjusted annually for inflation and vary according to family size and the age of the head of the family. measure. In addition, Congress should adopt the new povertyThe federal government defines “poverty” as income below specific thresholds. These thresholds are adjusted annually for inflation and vary according to family size and the age of the head of the family. measure in defining eligibility for assistance programs.

The Census Bureau should produce detailed, publicly available data based on the SPMThe Supplemental Poverty Measure (SPM) is a method for measuring poverty that more accurately reflects the spending patterns of people 65 and older..