Income, Poverty, and Health Insurance Coverage ... - Census Bureau

APPENDIX B.
ESTIMATES OF POVERTY
How Poverty Is Calculated
Following the Office of Management and Budget’s (OMB) Statistical Policy Directive 14, the U.S. Census Bureau uses a set of
dollar value thresholds that vary by family size and composition to determine who is in poverty (see the matrix below).
Poverty Thresholds for 2009 by Size of Family and Number of Related Children Under 18 Years
(Dollars)
Related children under 18 years
Size of family unit
Eight or
None One Two Three Four Five Six Seven more
One person (unrelated individual):
Under 65 years
65 years and older
11,161
10,289
Two people:
Householder under 65 years 14,366 14,787
Householder 65 years and older 12,968 14,731
Three people 16,781 17,268 17,285
Four people 22,128 22,490 21,756 21,832
Five people 26,686 27,074 26,245 25,603 25,211
Six people 30,693 30,815 30,180 29,571 28,666 28,130
Seven people 35,316 35,537 34,777 34,247 33,260 32,108 30,845
Eight people
Nine people or more
Source: US Census Bureau
39,498
47,514
39,847
47,744
39,130
47,109
38,501
46,576
37,610
45,701
36,478
44,497
35,300
43,408
35,000
43,138 41,476
If a family’s total money income is less Mother $10,000
than the applicable threshold, then Father 7,000
that family and every individual in it Great-aunt 10,000
are considered in poverty. The official First child 0
poverty thresholds are updated annu- Second child 0
ally for inflation using the Consumer Total: $27,000
Price Index (CPI-U). Since the average
annual CPI-U for 2009 was lower
than the average annual CPI-U for
2008, poverty thresholds for 2009
are slightly lower than the corre-
Since their total family income,
$27,000, was higher than their
threshold ($26,245), Family A would
not be considered “in poverty.”
sponding thresholds for 2008. The While the thresholds, in some sense,
official poverty definition uses money represent the needs of families, they
income before taxes and tax credits should be interpreted as a statistical
and excludes capital gains and non- yardstick rather than as a complete
cash benefits (such as Supplemental description of what people and fami-
Nutrition Assistance Program benefits lies need to live. Many government
and housing assistance). The thresh- assistance programs use different
olds do not vary geographically. income eligibility cutoffs. While
Example: Suppose Family A consists
of five people: two children, their
mother, their father, and their great-
aunt. Family A’s poverty threshold in
2009 was $26,245. Each member of
Family A had the following income in
2009:
official poverty rates and the number
of people or families in poverty are
important, other poverty indicators
are considered in the section, “Depth
of Poverty Measures,” and other
approaches to setting thresholds
and defining resources are discussed
in the section, “Alternative Poverty
Measures.”
For a history of the official poverty
measure, see “The Development of
the Orshansky Poverty Thresholds
and Their Subsequent History as the
Official U.S. Poverty Measure” by
Gordon M. Fisher, available at
.
Weighted average thresholds: Since
some data users want a summary of
the 48 thresholds to get a general
sense of the “poverty line,” the following
table provides the weighted average
thresholds for 2009. The averages
are based on the relative number
of families of each size and composition
and are not used in computing
poverty estimates.
Weighted Average Poverty
Thresholds in 2009 by Size
of Family
(Dollars)
One person 10,956
Two people 13,991
Three people 17,098
Four people 21,954
Five people 25,991
Six people 29,405
Seven people 33,372
Eight people 37,252
Nine people or more 44,366
Source: US Census Bureau
U.S. Census Bureau Income, Poverty, and Health Insurance Coverage in the United States: 2009 55