Poverty Guidelines
The U.S. Poverty Threshold represents poverty guidelines. The Poverty Threshold is the annual income level that defines whether a person or family is in a poverty status or simply “in poverty.” An income level below the Poverty Threshold means the person or family is in poverty; above the threshold, they are not. The Poverty Threshold is sometimes referred to as the poverty line.
The Poverty Threshold is based on household size. It assumes that it is more economical for two or more people to live in a household because they can share some expenses. The table to the right shows the average Poverty Thresholds for 2023 [i].
The U.S. Census Bureau releases the Poverty Thresholds in September of each year. The 2023 Thresholds were released on September 11, 2024.
Poverty Line
The Poverty Threshold is sometimes called the Poverty Line. The U.S. Poverty Line is the line of income that defines whether an individual or family is in poverty. The income represents the annual income from jobs, self-employment, and investments of the individual or family. Below the poverty line, the income is considered too low to provide for the necessities of life, such as food and housing.
The Graph to the right shows the U.S. Poverty Line for 2023:
Money Income
The Census Bureau defines household income in poverty guidelines as “Money Income.” Money Income represents wages, salaries, self-employment, and investment income on a before-tax basis, excluding non-cash benefits. Therefore, Money Income excludes most welfare benefits, such as SNAP, Housing Assistance, and EITC. However, it does include Social Security and unemployment payments.
Limitations of the U.S. Poverty Threshold and Money Income
Here is how the Census describes the limitations on using Money Income [ii]: “Moreover, readers should be aware that for many different reasons, many respondents tend to misreport or not report all types of income. Income earned from wages or salaries, the most significant component of money income, tends to be more accurately reported, and weighted totals are in line with other aggregate benchmarks. Still, estimates in this report are affected by ongoing challenges of nonresponse and misreporting.”
Because Money Income does not include welfare benefits, the Census Bureau’s measurement of poverty status does not measure whether an individual or family lives in poverty. Instead, it is a measure of financial independence. The Census Bureau does a second measurement of poverty status called the SPM (Supplemental Poverty Measure), which factors in government welfare and other benefits. See more on the Poverty Statistics Page.
Here is more information on Poverty and Welfare
History of the Poverty Threshold
The U.S. Poverty Threshold began in 1963 as a measurement of the minimum income necessary to support a household with food, housing, and necessities. Each year, the poverty guidelines are adjusted for the impacts of inflation.
A wonderful woman named Mollie Orshansky, nicknamed Ms. Poverty created the guidelines for poverty. Here is her story.
“If it is not possible to state unequivocally ‘how much is enough,’ it should be possible to assert with confidence how much, on an average, is too little.”
Mollie Orshansky – more
[i] U.S. Census Bureau. Poverty in the United States: 2023. Page 18. September 2024. Available here.
[ii] Ibid. Page 18.