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What’s the official definition of being poor in America?

Cans of food
REUTERS/Jim Young
Federal poverty guidelines determine the amount of money that goes to states to help pay for food and housing and other basic needs for the poor.

Recently issued federal poverty guidelines establish the 2012 definition of poverty in America.

Bottom line, it’s easier this year than last for families to qualify as poor and thus be eligible for state and federal government assistance programs, at least from the standpoint of income.

The down side? The U.S. Census last year reported an 11 percent increase in the cost of living in Minneapolis. 

This year a hypothetical family of one adult and two children making an annual income of $19,090 or less is now officially poor, compared to the 2011 definition of poor for that family being $18,530.

To put that in perspective, realize it figures out to one adult earner working full time for $9.17 an hour — about the cost of three tall lattes from Starbucks.

Further, for a family of four, one or two parents and children, the poverty guideline announced late last month sets an annual income of $23,050. Last year it was $22,350.

The federal definition establishes eligibility rules for federal public assistance programs, like TANF (Temporary Assistance for Needy Families), which replaced AFDC (Aid to Families with Dependent Children) in 1997. TANF money goes to the states to help pay for food and housing and other basic needs for the poor.

MFIP, the Minnesota Family Investment Program, is Minnesota’s version of TANF.

The U.S. guidelines serve as a benchmark for the states in determining who qualifies for their public assistance programs. In most states, if families exceed the poverty level income they lose their benefits.

Current Minnesota law, however, allows families to earn up to 115 percent of poverty and still receive cash benefits through MFIP.

But a proposed bill now before the House Health and Human Services Reform Committee would cut off benefits such as MFIP at 100 percent of poverty, explains Jessica L. Webster, staff attorney for the Legal Services Advocacy Project.   

She and other advocates for the poor oppose such a measure.

Webster recalls that when MFIP was piloted in 1994 to 1997 persons were allowed to earn up to 140 percent of the poverty guideline. The idea, Webster says, was to allow families to save money and stabilize their housing and living situations before leaving MFIP, meant to be a temporary lifesaver for families.   

In addition, local advocates for the poor like Kara Arzamendia, research director at the Children’s Defense Fund Minnesota, argue that an income of $23,000 for a family of four isn’t enough to meet basic needs. 

She points to figures offered by the Jobs Now Coalition Its online Family Wage and Budget Calculator estimates that a “basic needs” budget for a Minnesota family of four with two adults working full time and two children is actually about $56,300. (Figure in employer-provided health insurance, transportation costs, work clothes, child care.) 

Other experts maintain 200 percent of poverty, or $46,100, is sufficient income to support our hypothetical family of four’s basic needs.

You’ll find a graph here listing qualifying incomes for up to families of eight ($38,890) with a sparse addition of $3,960 for each additional family member over eight. 

Update

This week the House Health and Human Services Reform Committee approved the bill that would cut off some benefits at 100 percent of poverty and passed the measure on to the state House Public Safety and Crime Prevention Policy and Finance Committee.  

The poverty guidelines are used to determine whether persons qualify to receive certain kinds of economic assistance. In response to a reader’s query below whether the guidelines refer to before-tax income: that depends.

The U.S. Department of Health and Human Services explains:  “…[S]ome agencies compare before-tax income to the poverty guidelines, while other agencies compare after-tax income. Likewise, eligibility can be dependent on gross income, net income, or some other measure of income.’’

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Comments (5)

Is that gross, adjusted gross or taxable income?

I'm assuming that the poverty guidelines define "income" as "gross income" so that people who qualify for so many deductions they don't pay taxes are not considered "poor." This is not a snarky comment; it's a legitimate question

Good question, Jon.

Unfortunately, the answer is complicated. I've addressed the question in the "update" section added to the story.

11% Increase?

Looking at the link provided to the US Census Cost of Living page, I don't quite see where the 11% increase is coming from (in terms of what source) or between what time frame. Per Table 726, the cost of living increased 1.8 % for all items in the MSP area from 2010 to 2011.

The only table where I can see 11% coming from is 728 which compares the metro area's cost of living to the national average, not any previous data. So Minneapolis' 111% cost of living reflects a 11% higher cost compared to the rest of the US as a whole (Table 728), not an 11 % increase.

Could you clarify this if I'm misinterpreting the data?

Where do they get there math and what of the metally challenged?

I liked your report on "Poverty Level", but I still have never understood how they do there math. My wife and I have 5 children and barely make ends meet, we do use some public services, with I hope will start soon, but the 3500 per child thing is only good for families over 8? My family is a seven and I am on SS disability and my wife works 45 miles one way. How do they get those numbers being are they done in the metro areas? Is it due to the influx of the Somalies that MN is gracious enough to take? I don't understand? I have mental illness so I've also known that for some reason they lumped us with Black history month, so once again we get no press or even a care it seems in St. Paul. I seen that this is your area of reporting, could you please reply and make this easy for me to understand, cause our poverty level is far under their projected numbers, and I don't get where they pull this numbers out of the air, or why they don't accnowlege those of us with mental illness in these reports?? I know your a very buisy woman with your job and all, but I don't understand this?

Here is my 2 centsOver the

Here is my 2 cents

Over the last year or two my food bill has increase 50% eating the same food I always do. Since I am so poor I am not spending it on much else. So for me it has increased well over the 11% for me as far as cost of living..

example 7$ for a gallon of organic skim milk, since I can no longer have foods laced with any kind of additives pesticides, hormones, GMO anti-biotic, etc. I can not get the 3$ milk at kwik trip or SA any more.

balk of the rest of my food is Farmers market or balk from food co-op I have to stay away from heavily processed foods such a Ramon-noodles which is a poor man's food for those who don't know..

I can not eat the cheapest foods from over seas,(wall-mart) I was getting too sick, with MANY doctor visits and ambulance trips to the ER the chemicals and additives was messing with the bio-electrical system in my heart and other organs.

each city / town poverty level should be done separately in that depending where you live the cost of living is higher than other areas and vice versa. I know pain in butt , more work, more money spent yata yata. Example cheaper to live in Byron than say Mankato.

To Spencer: feds take the average of all cities combined then divide it by total people etc. the calculations is complex. then they run it through a super computer and it spits the answer out.

depending on the calculations they can get all kinds of different answers.

My guess is the poverty level wasn't the number the super computer gave but a political maneuver to compromise on budget. Basically how much money is fed willing to spend on services, then adjust the poverty based on that number.

example no increase to disability last year. Then claiming that cost of living did not go up at all. This year only 3 % instead of traditional 5%

In reality it was locked as a compromise by politicians so they would not cut other benefits.
It is all about how much money feds are willing to spend or not spend.

I am relatively intelligent guy and it causes my head to spin sometimes.

In reality and real world each city has its own level of poverty based on cost of living and same with outlying areas.

remember when we had that gas war in 98 like 66 cents a gallon? up at the red-lake Indian reservation "west side" the gas was $ 3.40 a gallon

So as you can see it all depends where you live.

State poverty level is more accurate in that they go by county. But they are subject to interpretation by politicians for the same reason as fed how much are they willing to spend.